<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 2000
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller of
Conseco Finance Home Equity Loan Trust 2000-B
---------------------------------------------
(Exact name of registrant as specified in its charter)
333-85119-01
Delaware 333-92313-01 41-1859796
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number identification No.)
300 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639
---------------------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 293-3400
----------------
Not Applicable
------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 1. Changes in Control of Registrant.
--------------------------------
Not applicable.
Item 2. Acquisition or Disposition of Assets.
------------------------------------
Not applicable.
Item 3. Bankruptcy or Receivership.
-------------------------
Not applicable.
Item 4. Changes in Registrant's Certifying Accountant.
----------------------------------------------
Not applicable.
Item 5. Other Events.
------------
On March 27, 2000, the Registrant issued $985,000,000 in
aggregate principal amount of Loan-Backed Notes. The Class
AF, Class MF and Class BF certificates were sold pursuant to
a prospectus supplement, dated March 1, 2000, to a
prospectus dated March 1, 1999.
Item 6. Resignations of Registrant's Directors.
--------------------------------------
Not applicable.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
-2-
<PAGE>
(c) Exhibits.
The following is filed herewith. The exhibit numbers
correspond with Item 601(b) of Regulation S-K.
Exhibit
No. Description
------- -----------
4.1 Pooling and Servicing Agreement between Conseco
Finance Corp., as Seller, Conseco Finance Corp. as
Originator, Servicer and Guarantor, and U.S. Bank
National Association, as Trustee, dated as of March 1,
2000, relating to Certificates for Home Equity Loans
Series 2000-B.
4.4 Transfer Agreement between Conseco Finance Corp.,
as Seller, and Conseco Finance Securitizations Corp.,
as Purchaser, dated as of March 1, 2000.
5.1 Opinion of Dorsey & Whitney LLP as to legality.
8.1 Tax opinion of Dorsey & Whitney LLP dated
March 27, 2000, relating to tax matters.
-3-
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSECO FINANCE SECURITIZATIONS CORP.
By: /s/ Phyllis A. Knight
------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
-4-
<PAGE>
Exhibit 4.1
Certificates for Home Equity Loans
Series 2000-B
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
and
CONSECO FINANCE CORP.
as Originator, Servicer and Guarantor
and
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
of
CONSECO FINANCE HOME EQUITY LOAN TRUST 2000-B
Dated as of March 1, 2000
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................1-1
SECTION 1.01. General...................................................1-1
SECTION 1.02. Specific Terms............................................1-1
SECTION 1.03. Calculation of Interest on the Certificates..............1-27
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF LOANS........................2-1
SECTION 2.01. Closing...................................................2-1
SECTION 2.02. Conditions to the Closing.................................2-1
SECTION 2.03. Conveyance of the Subsequent Loans........................2-3
SECTION 2.04. Acceptance by Trustee.....................................2-5
SECTION 2.05. REMIC Provisions..........................................2-5
SECTION 2.06. Seller Option to Substitute for Prepaid Loans.............2-7
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................3-1
SECTION 3.01. Representations and Warranties Regarding the Seller.......3-1
SECTION 3.02. Representations and Warranties Regarding Each Loan........3-2
SECTION 3.03. Additional Representations and Warranties.................3-5
SECTION 3.04. Representations and Warranties Regarding the Loans
in the Aggregate........................................3-5
SECTION 3.05. Representations and Warranties Regarding the Loan
Files...................................................3-7
SECTION 3.06. Repurchases of Loans for Breach of Representations
and Warranties..........................................3-8
SECTION 3.07. No Repurchase Under Certain Circumstances.................3-9
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF
SECURITY INTERESTS...............................................4-1
SECTION 4.01. Transfer of Loans.........................................4-1
SECTION 4.02. Costs and Expenses........................................4-1
ARTICLE V SERVICING OF LOANS................................................5-1
SECTION 5.01. Responsibility for Loan Administration....................5-1
SECTION 5.02. Standard of Care..........................................5-1
SECTION 5.03. Records...................................................5-1
SECTION 5.04. Inspection................................................5-1
SECTION 5.05. Certificate Account.......................................5-2
SECTION 5.06. Enforcement...............................................5-4
SECTION 5.07. Trustee to Cooperate......................................5-5
SECTION 5.08. Costs and Expenses........................................5-6
SECTION 5.09. Maintenance of Insurance..................................5-6
SECTION 5.10. Merger or Consolidation of Servicer.......................5-6
-i-
<PAGE>
ARTICLE VI REPORTS AND TAX MATTERS..........................................6-1
SECTION 6.01. Monthly Reports...........................................6-1
SECTION 6.02. Officer's Certificate.....................................6-1
SECTION 6.03. Other Data................................................6-1
SECTION 6.04. Annual Report of Accountants..............................6-1
SECTION 6.05. Statements to Certificateholders and the
Class C Certificateholder...............................6-1
SECTION 6.06. Payment of Taxes..........................................6-7
ARTICLE VII SERVICE TRANSFER................................................7-1
SECTION 7.01. Events of Termination.....................................7-1
SECTION 7.02. Transfer..................................................7-1
SECTION 7.03. Trustee to Act; Appointment of Successor..................7-2
SECTION 7.04. Notification to Certificateholders and
Class C Certificateholder...............................7-3
SECTION 7.05. Effect of Transfer........................................7-3
SECTION 7.06. Transfer of Certificate Account...........................7-3
ARTICLE VIII PAYMENTS.......................................................8-1
SECTION 8.01. Monthly Payments..........................................8-1
SECTION 8.02. Advances..................................................8-2
SECTION 8.03. Class BF-2 Limited Guaranty...............................8-2
SECTION 8.04. Permitted Withdrawals from the Certificate Account;
Payments................................................8-3
SECTION 8.05. Reassignment of Repurchased and Replaced Loans............8-7
SECTION 8.06. Class C Certificateholder's Purchase Option or
Auction Sale; Additional Principal Distribution
Amount..................................................8-7
SECTION 8.07. Capitalized Interest Account.............................8-10
SECTION 8.08. Pre-Funding Account......................................8-11
ARTICLE IX THE CERTIFICATES AND THE CLASS C CERTIFICATE.....................9-1
SECTION 9.01. The Certificates and the Class C Certificate..............9-1
SECTION 9.02. Registration of Transfer and Exchange of Certificates
and the Class C Certificate.............................9-2
SECTION 9.03. No Charge; Disposition of Void Certificates
or Class C Certificate..................................9-5
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates
or Class C Certificate..................................9-5
SECTION 9.05. Persons Deemed Owners.....................................9-6
SECTION 9.06. Access to List of Certificateholders' and Class C
Certificateholder's Names and Addresses.................9-6
SECTION 9.07. Authenticating Agents.....................................9-6
-ii-
<PAGE>
ARTICLE X INDEMNITIES......................................................10-1
SECTION 10.01. Real Estate..............................................10-1
SECTION 10.02. Liabilities to Obligors..................................10-1
SECTION 10.03. Tax Indemnification......................................10-1
SECTION 10.04. Servicer's Indemnities...................................10-1
SECTION 10.05. Operation of Indemnities.................................10-1
SECTION 10.06. REMIC Tax Matters........................................10-2
ARTICLE XI THE TRUSTEE.....................................................11-1
SECTION 11.01. Duties of Trustee........................................11-1
SECTION 11.02. Certain Matters Affecting the Trustee....................11-2
SECTION 11.03. Trustee Not Liable for Certificates, Class C
Certificate or Loans...................................11-3
SECTION 11.04. Trustee May Own Certificates.............................11-3
SECTION 11.05. Rights of Certificateholders to Direct Trustee and to
Waive Events of Termination............................11-3
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses..........11-4
SECTION 11.07. Eligibility Requirements for Trustee.....................11-4
SECTION 11.08. Resignation or Removal of Trustee........................11-5
SECTION 11.09. Successor Trustee........................................11-5
SECTION 11.10. Merger or Consolidation of Trustee.......................11-6
SECTION 11.11. Tax Returns..............................................11-6
SECTION 11.12. Obligor Claims...........................................11-6
SECTION 11.13. Appointment of Co-Trustee or Separate Trustee............11-7
SECTION 11.14. Trustee and U.S. Bancorp.................................11-8
SECTION 11.15. Trustee Advances.........................................11-8
ARTICLE XII MISCELLANEOUS..................................................12-1
SECTION 12.01. Servicer Not to Resign; Delegation of Servicing Duties...12-1
SECTION 12.02. Conseco Finance Corp. and Seller Not to Engage in
Certain Transactions with Respect to the Trust.........12-1
SECTION 12.03. Maintenance of Office or Agency..........................12-1
SECTION 12.04. Termination..............................................12-1
SECTION 12.05. Acts of Certificateholders and Class C
Certificateholder......................................12-3
SECTION 12.06. Assignment or Delegation by Company......................12-4
SECTION 12.07. Amendment................................................12-4
SECTION 12.08. Notices..................................................12-6
SECTION 12.09. Merger and Integration...................................12-8
SECTION 12.10. Headings.................................................12-8
SECTION 12.11. Governing Law............................................12-8
-iii-
<PAGE>
Exhibit A -- Form of Class AF-[1][2][3][4][5][6] Certificate
Exhibit B -- Form of Class MF-[1][2] Certificate
Exhibit C -- Form of Class BF-[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 C 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 P Certificate
-iv-
<PAGE>
AGREEMENT, dated as of March 1, 2000, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware, as
originator of the home equity loans described herein (the "Originator"), as
Servicer (the "Servicer") and as Limited Guarantor of the Class BF-2
Certificates (the "Guarantor"), 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 2000-B (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 C 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, the Guarantor 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 C
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:
<PAGE>
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.
"Additional Principal Distribution Amount" means, for any Payment Date,
the Amount Available remaining after payment of the amounts described in clauses
(1) through (16) of Section 8.04(b).
"Additional Principal Entitlement Date" means the Payment Date
occurring in the month following the Determination Date specified in Section
8.06(d) if the Class C Certificateholder has not delivered to the Trustee the
notice described in Section 8.06(b) of its purchase option.
"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
AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1,
Class MF-2, Class BF-1, Class BF-2 and Class P Principal Balances.
1-1
<PAGE>
"Aggregate Liquidation Loss Principal Amount" means, for any Payment
Date, the excess, if any, of (a) the Aggregate Certificate Principal Balance
minus all distributions of principal on the Certificates on such Payment Date
over (b) the sum of the Pool Scheduled Principal Balance plus the Pre-Funded
Amount.
"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,
(ii) any Advances deposited in the Certificate Account with
respect to such Payment Date, and
(iii) any amount withdrawn from the Capitalized Interest
Account pursuant to Section 8.07 or the Pre-Funding Account pursuant to
Section 8.08 and deposited in the Certificate Account, 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),
(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, and
(iv) any Prepayment Charges.
"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.
1-2
<PAGE>
"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 42.5% 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.
"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.
"Capitalized Interest Account" means a separate trust account created
and maintained pursuant to Section 8.07 in the name of the Trust in an Eligible
Institution.
"Certificate" means a Certificate for Home Equity Loans, Series 2000-B,
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class
MF-1, Class MF-2, Class BF-1, Class BF-2 or Class P, executed and delivered by
the Trustee substantially in the form of Exhibit A, B, C or Q, as applicable,
but does not include the Class C 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 C 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 C 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,
1-3
<PAGE>
request or demand, only Certificates or a Class C Certificate which the Trustee
knows to be so owned shall be so disregarded.
"Class AF," "Class MF," "Class BF," "Class P," or "Class C" means
pertaining to Class AF Certificates, Class MF Certificates, Class BF
Certificates, the Class P Certificate and/or the Class C Certificate, as the
case may be.
"Class AF Certificate" means the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class AF-5 and Class AF-6 Certificates, collectively, each of which
shall be executed and delivered by the Trustee, authenticated by the Certificate
Registrar, substantially in the form set forth in Exhibit A and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class AF Distribution Amount" means, for any Payment Date, the lesser
of (a) the Class AF Formula Distribution Amount and (b) that portion of the
Amount Available eligible for distribution in respect of such amount in
accordance with the priorities set forth in Section 8.04(b).
"Class AF Formula Distribution 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 April 17,
2000) at (i) the Class AF-1 Pass-Through Rate on the Class AF-1 Principal
Balance, (ii) the Class AF-2 Pass-Through Rate on the Class AF-2 Principal
Balance, (iii) the Class AF-3 Pass-Through Rate on the Class AF-3 Principal
Balance, (iv) the Class AF-4 Pass-Through Rate on the Class AF-4 Principal
Balance, (v) the Class AF-5 Pass-Through Rate on the Class AF-5 Principal
Balance, and (vi) the Class AF-6 Pass-Through Rate on the Class AF-6 Principal
Balance, in each case to be calculated immediately prior to such Payment Date,
(b) the aggregate of the Unpaid Class AF Interest Shortfalls, if any, with
respect to each Class of Class AF Certificates and (c)(i) if there is no Class
AF Principal Deficiency Amount for such Payment Date, the Class AF Formula
Principal Distribution Amount, or (ii) if there is a Class AF Principal
Deficiency Amount for such Payment Date, the amount determined in accordance
with Section 8.04(b)(6)(i).
"Class AF Formula Interest Distribution Amount" means, as to each Class
of Class AF Certificates and any Payment Date, the sum of (1) the amount
specified in clause (a)(i), (ii), (iii), (iv), (v) or (vi) as appropriate of the
definition of the term "Class AF Formula Distribution Amount" and (2) the Unpaid
Class AF Interest Shortfall, if any, with respect to such Class.
"Class AF Formula Principal Distribution Amount" means, for any Payment
Date:
(i) if the Payment Date is (A) before the Stepdown Date or
(B) on or after the Stepdown Date and a Trigger Event exists, the
Formula Principal Distribution Amount (but in no event more than the
Class AF Principal Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class AF Principal Balance) of (A) the
1-4
<PAGE>
Class AF Principal Balance over (B) the lesser of (x) 62.00% of the
Pool Scheduled Principal Balance or (y) the Pool Scheduled Principal
Balance minus $15,000,000.
"Class AF Interest Shortfall" means, as to each Class of Class AF
Certificates and any Payment Date, the amount, if any, by which the Class AF
Formula Interest Distribution Amount for such Class exceeds the amount
distributed to Holders of such Class on such Payment Date pursuant to Section
8.04(b)(2).
"Class AF Principal Balance" means, for any Payment Date, the Original
Class AF Principal Balance less all amounts previously distributed to Holders of
Class AF Certificates in respect of principal.
"Class AF Principal Deficiency Amount" means, for any Payment Date, the
excess, if any, of (a) the Class AF Principal Balance for such Payment Date over
(b) the sum of the Pool Scheduled Principal Balance plus the Pre-Funded Amount
for the immediately preceding Payment Date.
"Class AF-1 Distribution Amount" means, for any Payment Date, that
portion of the Class AF Distribution Amount to be distributed to the Class AF-1
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AF-1 Principal Balance" means, for any Payment Date, the
Original Class AF-1 Principal Balance less all amounts previously distributed to
Holders of Class AF-1 Certificates in respect of principal.
"Class AF-2 Distribution Amount" means, for any Payment Date, that
portion of the Class AF Distribution Amount to be distributed to the Class AF-2
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AF-2 Principal Balance" means, for any Payment Date, the
Original Class AF-2 Principal Balance less all amounts previously distributed to
Holders of Class AF-2 Certificates in respect of principal.
"Class AF-3 Distribution Amount" means, for any Payment Date, that
portion of the Class AF Distribution Amount to be distributed to the Class AF-3
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AF-3 Principal Balance" means, for any Payment Date, the
Original Class AF-3 Principal Balance less all amounts previously distributed to
Holders of Class AF-3 Certificates in respect of principal.
"Class AF-4 Distribution Amount" means, for any Payment Date, that
portion of the Class AF Distribution Amount to be distributed to the Class AF-4
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
1-5
<PAGE>
"Class AF-4 Principal Balance" means, for any Payment Date, the
Original Class AF-4 Principal Balance less all amounts previously distributed to
Holders of Class AF-4 Certificates in respect of principal.
"Class AF-5 Distribution Amount" means, for any Payment Date, that
portion of the Class AF Distribution Amount to be distributed to the Class AF-5
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AF-5 Principal Balance" means, for any Payment Date, the
Original Class AF-5 Principal Balance less all amounts previously distributed to
Holders of Class AF-5 Certificates in respect of principal.
"Class AF-6 Distribution Amount" means, for any Payment Date, that
portion of the Class AF Distribution Amount to be distributed to the Class AF-6
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AF-6 Lockout Percentage" means, for any Payment Date occurring
during the periods set forth below, the percentage designated as such as
follows:
Class AF-6
Lockout
Period (dates inclusive) Percentage
------------------------------------- --------------------
April 2000 through March 2002 0%
April 2002 through March 2004 20%
April 2004 through March 2005 80%
April 2005 through March 2006 100%
April 2006 and thereafter 300%
"Class AF-6 Lockout Principal Distribution Amount" means, for any
Payment Date, an amount equal to the lesser of:
(a) the product of (1) the applicable Class AF-6 Lockout
Percentage and (2) the product of (A) a fraction, the numerator of
which is the Class AF-6 Principal Balance for such Payment Date and the
denominator of which is the Class AF Principal Balance for such Payment
Date, and (B) the Class AF Formula Principal Distribution Amount for
such Payment Date, and
(b) the Class AF-6 Principal Balance for such Payment Date.
"Class AF-6 Principal Balance" means, for any Payment Date, the
Original Class AF-6 Principal Balance less all amounts previously distributed to
Holders of Class AF-6 Certificates in respect of principal.
"Class BF Certificates" means the Class BF-1 and Class BF-2
Certificates, collectively.
1-6
<PAGE>
"Class BF Principal Balance" means, for any Payment Date, the sum of
the Class BF-1 Principal Balance and the Class BF-2 Principal Balance.
"Class BF-1 Adjusted Principal Balance" means, for any Payment Date,
the Class BF-1 Principal Balance minus the Class BF-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class BF-1 Certificate" means any one of the Class BF-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 BF-1 Distribution Amount" means, for any Payment Date, the
lesser of (a) the Class BF-1 Formula Distribution Amount and (b) that portion of
the Amount Available eligible for distribution in respect of such amount in
accordance with the priorities set forth in Section 8.04(b).
"Class BF-1 Formula Distribution 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
April 17, 2000) at the Class BF-1 Pass-Through Rate on the Class BF-1 Adjusted
Principal Balance, (b) the Unpaid Class BF-1 Interest Shortfall, if any, (c) the
Class BF-1 Formula Principal Distribution Amount and (d) the Class BF-1 Formula
Liquidation Loss Interest Distribution Amount, if any, with respect to the Class
BF-1 Certificates.
"Class BF-1 Formula Interest Distribution Amount" means the sum of the
amounts specified in clauses (a) and (b) of the definition of the term "Class
BF-1 Formula Distribution Amount."
"Class BF-1 Formula Liquidation Loss Interest Distribution Amount"
means, for any Payment Date, the sum of (a) the Class BF-1 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class BF-1 Liquidation Loss Interest
Shortfall, if any.
"Class BF-1 Formula Principal Distribution Amount" means, for any
Payment Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the sum of the Class AF Formula
Principal Distribution Amount, the Class MF-1 Formula Principal
Distribution Amount and the Class MF-2 Formula Principal Distribution
Amount (but in no event more than the Class BF-1 Principal Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class BF-1 Principal Balance) of
(A) (1) the sum of the Class AF Principal Balance,
the Class MF-1 Adjusted Principal Balance, the Class MF-2
Adjusted
1-7
<PAGE>
Principal Balance and the Class BF-1 Adjusted Principal
Balance, minus (2) the amount actually distributed on such
Payment Date in respect of principal on the Class AF, Class
MF-1 and Class MF-2 Certificates, over
(B) the lesser of (x) 90.00% of the Pool Scheduled
Principal Balance or (y) the Pool Scheduled Principal Balance
minus $15,000,000.
"Class BF-1 Interest Shortfall" means, for any Payment Date, the
amount, if any, by which (a) the Class BF-1 Formula Interest Distribution Amount
exceeds (b) the amount distributed to Holders of such Class on such Payment Date
pursuant to Section 8.04(b)(5).
"Class BF-1 Liquidation Loss Interest Amount" means, for any Payment
Date, an amount equal to one month's interest at the Class BF-1 Pass-Through
Rate on the Class BF-1 Liquidation Loss Principal Amount (if any) for the
immediately preceding Payment Date.
"Class BF-1 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class BF-1 Formula Liquidation Loss
Interest Distribution Amount exceeds (b) any amount distributed to Holders of
such Class on such Payment Date pursuant to Section 8.04(b)(12).
"Class BF-1 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (a) the Class BF-1 Principal Balance minus all distributions
of principal on the Class BF-1 Certificates on such Payment Date and (b) the
Aggregate Liquidation Loss Principal Amount (if any) minus the Class BF-2
Liquidation Loss Principal Amount (if any) for such Payment Date.
"Class BF-1 Principal Balance" means, for any Payment Date, the
Original Class BF-1 Principal Balance less all amounts previously distributed to
Holders of Class BF-1 Certificates in respect of principal.
"Class BF-2 Adjusted Principal Balance" means, for any Payment Date,
the Class BF-2 Principal Balance minus the Class BF-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date for which a Class
BF-2 Guaranty Payment was not made.
"Class BF-2 Certificate" means any one of the Class BF-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 REMIC for purposes of the
REMIC Provisions.
"Class BF-2 Distribution Amount" means, for any Payment Date, the
lesser of (a) the Class BF-2 Formula Distribution Amount and (b) that portion of
the Amount Available eligible for distribution in respect of such amount in
accordance with the priorities set forth in Section 8.04(b).
"Class BF-2 Formula Distribution 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
1-8
<PAGE>
including the Closing Date to but excluding April 17, 2000) at the Class BF-2
Pass-Through Rate on the Class BF-2 Principal Balance, (b) the Unpaid Class BF-2
Interest Shortfall, if any, and (c) the Class BF-2 Formula Principal
Distribution Amount.
"Class BF-2 Formula Interest Distribution Amount" means the sum of the
amounts specified in clauses (a) and (b) of the definition of the term "Class
BF-2 Formula Distribution Amount."
"Class BF-2 Formula Principal Distribution Amount" means, for any
Payment Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the sum of the Class AF Formula
Principal Distribution Amount, the Class MF-1 Formula Principal
Distribution Amount, the Class MF-2 Formula Principal Distribution
Amount and the Class BF-1 Formula Principal Distribution Amount (but in
no event more than the Class BF-2 Principal Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class BF-2 Principal Balance) of
(A) (1) the sum of the Class AF Principal Balance,
the Class MF-1 Adjusted Principal Balance, the Class MF-2
Adjusted Principal Balance, the Class BF-1 Adjusted Principal
Balance and the Class BF-2 Adjusted Principal Balance, minus
(2) the amount actually distributed on such Payment Date in
respect of principal on the Class AF, Class MF-1, Class MF-2
and Class BF-1 Certificates, over
(B) the lesser of (x) 97.00% of the Pool Scheduled
Principal Balance or (y) the Pool Scheduled Principal Balance
minus $15,000,000.
"Class BF-2 Guaranty Fee" means, for any Payment Date, the lesser of
(a) one-twelfth of the product of 3.00% and the sum of the Pool Scheduled
Principal Balance and the Pre-Funded Amount for the immediately preceding
Payment Date (or, in the case of the April 2000 Payment Date, the Cut-off Date),
or (b) that portion of the Amount Available eligible for distribution in respect
of such amount in accordance with Section 8.04(b)(20).
"Class BF-2 Guaranty Payment" means, for any Payment Date, the amount,
if any, by which (a) the sum of the Class BF-2 Formula Distribution Amount and
the Class BF-2 Liquidation Loss Principal Amount exceeds (b) the Class BF-2
Distribution Amount; provided that the Class BF-2 Guaranty Payment shall not
exceed the amount necessary to reduce the Class BF-2 Principal Balance to zero.
"Class BF-2 Interest Shortfall" means, for any Payment Date, the
amount, if any, by which (a) the Class BF-2 Formula Interest Distribution Amount
exceeds (b) the sum of the amounts distributed to Class BF-2 Certificateholders
on such Payment Date pursuant to clause (i) of Section 8.04(b)(13) and any Class
BF-2 Guaranty Payment in respect of interest.
1-9
<PAGE>
"Class BF-2 Limited Guaranty" means the limited guaranty of the
Guarantor provided pursuant to Section 8.03.
"Class BF-2 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (A) the Class BF-2 Principal Balance minus all distributions
of principal on the Class BF-2 Certificates on such Payment Date and (B) the
Aggregate Liquidation Loss Principal Amount for such Payment Date.
"Class BF-2 Principal Balance" means, for any Payment Date, the
Original Class BF-2 Principal Balance less all amounts previously distributed to
Holders of Class BF-2 Certificates in respect of principal.
"Class C Certificate" means a Certificate for Home Equity Loans, Series
2000-B, bearing the designation "Class C," executed and delivered by the Trustee
substantially in the form of Exhibit I, and evidencing an interest designated as
the "residual interest" in the REMIC for purposes of the REMIC Provisions.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Distribution Amount" means, for any Payment Date, the amount,
if any, distributable in respect of the Class C Certificate pursuant to Section
8.04(b)(21).
"Class MF Certificates" means the Class MF-1 and Class MF-2
Certificates, collectively.
"Class MF-1 Adjusted Principal Balance" means, for any Payment Date,
the Class MF-1 Principal Balance minus the Class MF-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class MF-1 Certificate" means any one of the Class MF-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 MF-1 Distribution Amount" means, for any Payment Date, the
lesser of (a) the Class MF-1 Formula Distribution Amount and (b) that portion of
the Amount Available eligible for distribution in respect of such amount in
accordance with the priorities set forth in Section 8.04(b).
"Class MF-1 Formula Distribution 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
April 17, 2000) at the Class MF-1 Pass-Through Rate on the Class MF-1 Adjusted
Principal Balance, (b) the Unpaid Class MF-1 Interest Shortfall, if any, (c) the
Class MF-1 Formula Principal Distribution Amount and (d) the Class MF-1 Formula
Liquidation Loss Interest Distribution Amount, if any.
1-10
<PAGE>
"Class MF-1 Formula Interest Distribution Amount" means, for any
Payment Date, the sum of the amounts specified in clauses (a) and (b) of the
definition of the term "Class MF-1 Formula Distribution Amount."
"Class MF-1 Formula Liquidation Loss Interest Distribution Amount"
means, for any Payment Date, the sum of (a) the Class MF-1 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class MF-1 Liquidation Loss Interest
Shortfall, if any.
"Class MF-1 Formula Principal Distribution Amount" means, for any
Payment Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the Class AF Formula Principal
Distribution Amount (but in no event more than the Class MF-1 Principal
Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class MF-1 Principal Balance) of
(A) (1) the sum of the Class AF Principal Balance and
the Class MF-1 Adjusted Principal Balance, minus (2) the
amount actually distributed on such Payment Date in respect of
principal on the Class AF Certificates, over
(B) the lesser of (x) 73.86% of the Pool Scheduled
Principal Balance or (y) the Pool Scheduled Principal Balance
minus $15,000,000.
"Class MF-1 Interest Shortfall" means, for any Payment Date, the
amount, if any, by which (a) the Class MF-1 Formula Interest Distribution Amount
exceeds (b) the amount distributed to Holders of such Class on such Payment Date
pursuant to Section 8.04(b)(3).
"Class MF-1 Liquidation Loss Interest Amount" means, for any Payment
Date, an amount equal to one month's interest at the Class MF-1 Pass-Through
Rate on the Class MF-1 Liquidation Loss Principal Amount (if any) for the
immediately preceding Payment Date.
"Class MF-1 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class MF-1 Formula Liquidation Loss
Interest Distribution Amount exceeds (b) any amount distributed to the Holders
of such Class on such Payment Date pursuant to Section 8.04(b)(10).
"Class MF-1 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (A) the Class MF-1 Principal Balance minus all distributions
of principal on the Class MF-1 Certificates on such Payment Date and (B) the
excess, if any, of the Aggregate Liquidation Loss Principal Amount over the
aggregate of the Class BF-2 Liquidation Loss Principal Amount, the Class BF-1
Liquidation Loss Principal Amount and the Class MF-2 Liquidation Loss Principal
Amount for such Payment Date.
1-11
<PAGE>
"Class MF-1 Principal Balance" means, for any Payment Date, the
Original Class MF-1 Principal Balance less all amounts previously distributed to
Holders of Class MF-1 Certificates in respect of principal.
"Class MF-2 Adjusted Principal Balance" means, for any Payment Date,
the Class MF-2 Principal Balance minus the Class MF-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class MF-2 Certificate" means any one of the Class MF-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 MF-2 Distribution Amount" means, for any Payment Date, the
lesser of (a) the Class MF-2 Formula Distribution Amount and (b) that portion of
the Amount Available eligible for distribution in respect of such amount in
accordance with the priorities set forth in Section 8.04(b).
"Class MF-2 Formula Distribution 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
April 17, 2000) at the Class MF-2 Pass-Through Rate on the Class MF-2 Adjusted
Principal Balance, (b) the Unpaid Class MF-2 Interest Shortfall, if any, (c) the
Class MF-2 Formula Principal Distribution Amount and (d) the Class MF-2 Formula
Liquidation Loss Interest Distribution Amount, if any.
"Class MF-2 Formula Interest Distribution Amount" means, for any
Payment Date, the sum of the amounts specified in clauses (a) and (b) of the
definition of the term "Class MF-2 Formula Distribution Amount."
"Class MF-2 Formula Liquidation Loss Interest Distribution Amount"
means, for any Payment Date, the sum of (a) the Class MF-2 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class MF-2 Liquidation Loss Interest
Shortfall, if any.
"Class MF-2 Formula Principal Distribution Amount" means, for any
Payment Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the sum of the Class AF Formula
Principal Distribution Amount and the Class MF-1 Formula Principal
Distribution Amount (but in no event more than the Class MF-2 Principal
Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class MF-2 Principal Balance) of
1-12
<PAGE>
(A) (1) the sum of the Class AF Principal Balance,
the Class MF-1 Adjusted Principal Balance and the Class MF-2
Adjusted Principal Balance, minus (2) the amount actually
distributed on such Payment Date in respect of principal on
the Class AF and Class MF-1 Certificates, over
(B) the lesser of (x) 83.96% of the Pool Scheduled
Principal Balance or (y) the Pool Scheduled Principal Balance
minus $15,000,000.
"Class MF-2 Interest Shortfall" means, for any Payment Date, the
amount, if any, by which (a) the Class MF-2 Formula Interest Distribution Amount
exceeds (b) the amount distributed to Holders of such Class on such Payment Date
pursuant to Section 8.04(b)(4).
"Class MF-2 Liquidation Loss Interest Amount" means, for any Payment
Date, an amount equal to one month's interest at the Class MF-2 Pass-Through
Rate on the Class MF-2 Liquidation Loss Principal Amount (if any) for the
immediately preceding Payment Date.
"Class MF-2 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class MF-2 Formula Liquidation Loss
Interest Distribution Amount for such Class exceeds (b) any amount distributed
to Holders of such Class on such Payment Date pursuant to Section 8.04(b)(11).
"Class MF-2 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (a) the Class MF-2 Principal Balance minus all distributions
of principal on the Class MF-2 Certificates on such Payment Date and (b) the
excess, if any, of the Aggregate Liquidation Loss Principal Amount over the
aggregate of the Class BF-2 Liquidation Loss Principal Amount and the Class BF-1
Liquidation Loss Principal Amount for such Payment Date.
"Class MF-2 Principal Balance" means, for any Payment Date, the
Original Class MF-2 Principal Balance less all amounts previously distributed to
Holders of Class MF-2 Certificates in respect of principal.
"Class P Certificate" means any one of the Class P Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit Q and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"Class P Distribution Amount" means, for any Payment Date, that portion
of the Amount Available eligible for distribution in respect of the Class P
Certificate in accordance with the priorities set forth in Section 8.04(b) and
(d).
"Class P Principal Balance" means, for any Payment Date, the Original
Class P Principal Balance less all amounts previously distributed to Holders of
Class P Certificate pursuant to Section 8.04(b)(14).
1-13
<PAGE>
"Class Principal Balance" means any of the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class
BF-1, Class BF-2 or Class P Principal Balances.
"Closing Date" means March 27, 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Principal Balance" means, with respect to any Loan whose
Combined LTV as of the applicable Cut-off Date was greater than 100%, an amount
that, when used as the principal balance of such Loan in calculating the
Combined LTV of such Loan, yields a Combined LTV equal to 100%.
"Combined LTV" means, with respect to any Loan, the percentage obtained
by dividing (i) the sum of (a) the current principal balance of such Loan, plus
(b) 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 (ii) the lesser of (a) 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 (b) 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.
"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.
"Counsel for the Originator" means Dorsey & Whitney LLP, or other legal
counsel for the Originator.
"Counsel for the Seller" means Dorsey & Whitney 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 Principal Balances of all the Loans plus the
amount on deposit in the Pre-Funding Account immediately prior to the
Post-Funding Payment Date.
1-14
<PAGE>
"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, as
applicable, for such Payment Date is less than or equal to the percentage set
forth below:
Payment Date Percentage
------------ ----------
April 2003 - March 2004 4.40%
April 2004 - March 2005 5.23%
April 2005 - March 2007 5.50%
April 2007 and thereafter 6.00%
"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 Moody's and D-1+ by Duff & Phelps in
the case of commercial paper, or BBB+ or higher by each of S&P, Moody's and Duff
& Phelps 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 Loan, December 31,
1999 (or the date of origination, if later); with respect to each Additional
Loan, February 29, 2000; 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, (i) as to any Initial or
Additional Loan, the unpaid principal balance thereof at the Cut-off Date after
giving effect to all installments of principal due on or prior thereto, and (ii)
as to any Subsequent Loan, the unpaid principal balance thereof at the related
Subsequent Cut-off Date, after giving effect to all installments of principal
due on or prior thereto; provided, however, that with respect to any Loan whose
Combined LTV as of the applicable Cut-off Date was greater than 100%, the
Cut-off Date Principal Balance for such Loan shall be the Collateral Principal
Balance for such Loan.
"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).
1-15
<PAGE>
"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 (i) one
Class AF-1 Certificate evidencing $321,740,000 in Original Class AF-1 Principal
Balance, (ii) one Class AF-2 Certificate evidencing $186,150,000 in Original
Class AF-2 Principal Balance, (iii) one Class AF-3 Certificate evidencing
$80,570,000 in Original Class AF-3 Principal Balance, (iv) one Class AF-4
Certificate evidencing $48,620,000 in Original Class AF-4 Principal Balance, (v)
one Class AF-5 Certificate evidencing $75,420,000 in Original Class AF-5
Principal Balance, (vi) one Class AF-6 Certificate evidencing $97,500,000 in
Original Class AF-6 Principal Balance, (vii) one Class MF-1 Certificate
evidencing $59,300,000 iin Original Class MF-1 Principal Balance, (viii) one
Class MF-2 Certificate evidencing $50,500,000 in Original Class MF-2 Principal
Balance, (ix) one Class BF-1 Certificate evidencing $30,200,000 in Original
Class BF-1 Principal Balance, and (x) one Class BF-2 Certificate evidencing
$35,000,000 in Original Class BF-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 after the first Payment Date,
a calendar month during the term of this Agreement and, for the first Payment
Date, the calendar months of February, March and April.
"Duff & Phelps" means Duff & Phelps Credit Rating Co., or any successor
thereto; provided that, if Duff & Phelps no longer has a rating outstanding on
any Class of the Certificates, then references herein to "Duff & Phelps" 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 Duff & Phelps shall be deemed to have the
equivalent meanings with respect to ratings by or requirements of such NRSRO.
1-16
<PAGE>
"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: (i) an account maintained with an Eligible Institution; (ii) 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; (iii) 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 (iv) 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, P-1 by Moody's (if rated by
Moody's) and D-1+ by Duff & Phelps (if rated by Duff & Phelps) or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by S&P and Moody's (if rated by Moody's) and Duff & Phelps (if rated
by Duff & Phelps).
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Originator or any Person (i) which is
qualified to act as Servicer of the Loans under applicable federal and state
laws and regulations, and (ii) 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 (1) any Replaced Loan for which
an Eligible Substitute Loan is being substituted pursuant to Section 3.06(b),
and (2) any Prepaid Loan for which an Eligible Substitute Loan is being
substituted pursuant to Section 2.06, a Loan that (a) as of the date of its
substitution, satisfies all of the representations and warranties (which, except
when expressly stated to be as of origination, shall be deemed to be made as of
the date of its substitution rather than as 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, (b) after giving effect to the
scheduled payment due in the month of such substitution, has a Scheduled
Principal Balance that is not greater than the Scheduled Principal Balance of
such Replaced Loan or, but for such Principal Prepayment in Full, the Scheduled
Principal Balance of such Prepaid Loan, as the case may be, (c) 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, (d) 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, (e) as of the date of its
origination, was identified by the
1-17
<PAGE>
Originator under its standard underwriting criteria as the same credit grade as
the Replaced Loan or Prepaid Loan, as the case may be, (f) 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 (g) 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.
"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
1-18
<PAGE>
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 (a) through (d) above that
was not previously distributed because of an insufficient amount of
funds available in the Certificate Account; plus
(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
$590,169,636.03.
"Liquidated Loan" means, with respect to any Due Period, either
(1) 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
(2) a Loan (a) upon which all or a portion of the first payment of
interest due by the Obligor was added to principal, and (b) on which the Obligor
failed to pay the full amount of principal due on the Loan, as computed by the
Servicer; 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 January 2029, 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
1-19
<PAGE>
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 (i) the Cut-off Date Principal Balance, (ii) the amount of
monthly payments due from the Obligor, (iii) the Loan Interest Rate and (iv) 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, (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.
"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).
"Moody's" means Moody's 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 "Moody's" shall be deemed to
refer to the NRSRO then rating any Class of the Certificates (or, if more than
one such NRSRO is then rating any Class of the Certificates, to such NRSRO as
may be designated by the Servicer), and references herein to ratings by or
requirements of Moody's shall be deemed to have the equivalent meanings with
respect to ratings by or requirements of such NRSRO.
"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.
1-20
<PAGE>
"NRSRO" means any nationally recognized statistical rating
organization.
"Obligor" means the person who owes payments under a Loan.
"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 $985,000,100.
"Original Class Principal Balance" means as to each Class of
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 Certificate, the amount
set forth with respect to such interest in Section 2.05(b).
"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).
"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 April 2000.
"Percentage Interest" means, as to any Certificate or the Class C
Certificate, the percentage interest evidenced thereby in distributions made on
the related Class, such percentage interest being equal to: (i) 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 (ii) as to any Class C Certificate, the percentage specified
on the face of such Certificate. The aggregate Percentage Interests for each
Class of Certificates and the Class C Certificate shall equal 100%,
respectively.
"Permitted Transferee" means, in the case of a transfer of the Class C
Certificate, a Person that is not a Plan or a Disqualified Organization, except
as permitted by Sections 9.02(b)(2) and (3), respectively.
1-21
<PAGE>
"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; provided, however,
that for any Loan whose Combined LTV as of the applicable Cut-off Date was
greater than 100%, the Scheduled Principal Balance as of any Payment Date, for
purposes of calculating the Pool Scheduled Principal Balance, will instead be
that Loan's Collateral Principal Balance minus all scheduled payments of
principal due since the Cut-off Date and minus any Partial Principal Prepayments
received since the applicable Cut-off Date, but without giving effect to any
adjustments in scheduled payments due to bankruptcy or similar proceedings.
"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
June 14, 2000, 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 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.
1-22
<PAGE>
"Principal Prepayment in Full" means any Principal Prepayment of the
entire principal balance of a Loan.
"Rating Agencies" means S&P, Moody's and Duff & Phelps.
"Realized Losses" means, for any Payment Date, the aggregate Net
Liquidation Losses for all Loans that became Liquidated Loans during the
immediately preceding Due Period.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date.
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
"REMIC Provisions" means the provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and any temporary, proposed or final regulations promulgated
thereunder, as the foregoing may be in effect from time to time.
"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.
"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
McGraw-Hill 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
1-23
<PAGE>
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 (or Collateral
Principal Balance, as applicable) of the Loan on its date of origination.
"Senior Enhancement Percentage" means, for any Payment Date, a
fraction, expressed as a percentage,
(x) the numerator of which is the excess of (A) the Pool
Scheduled Principal Balance over (B) the aggregate Principal Balance of
the Class AF Certificates or, if all of the Class AF Certificates have
been retired, the Adjusted Principal Balance of the most senior class
of Certificates outstanding, and
(y) the denominator of which is the Pool Scheduled Principal
Balance.
"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 April 2003
and (B) the first Payment Date on which the Class AF Principal Balance is less
than or equal to 62.00% of the Pool Scheduled Principal Balance.
1-24
<PAGE>
"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.
"Transfer Agreement" means that Transfer Agreement between Conseco
Finance Securitizations Corp., as purchaser, and Conseco Finance Corp., as
seller, dated as of March 1, 2000.
"Trigger Event" exists for any Payment Date if (i) the Average
Sixty-Day Delinquency Ratio Test for the Loans is not satisfied or (ii) the
Cumulative Realized Losses Test for the Loans is not satisfied.
"Trust" means Conseco Finance Home Equity Loan Trust 2000-B.
"Trust Fund" means the corpus of the Trust created by this Agreement
which consists of (i) 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,
(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 Loan,
(iii) all rights of the Seller under the Transfer Agreement, (iv) all rights the
Originator may have against the originating lender with respect to Loans
originated by a lender other than the Originator, (v) all rights under the
Errors and Omissions Protection Policy and the Fidelity Bond as such policy and
bond relate to the Loans, (vi) all rights under any title insurance policies, if
applicable, on any of the properties securing Loans, (vii) all documents
contained in the Loan Files, (viii) the Class BF-2 Limited Guaranty, (ix)
amounts in the Certificate Account, the Capitalized Interest Account, and the
Pre-Funding Account (including all proceeds of investments of funds in the
Certificate Account) and (x) all proceeds and products of the foregoing.
"Trustee Advance" has the meaning assigned in Section 11.15.
"Underwriters" means Banc of America Securities LLC, Credit Suisse
First Boston Corporation, Chase Securities Inc., First Union Securities, Inc.,
Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Prudential Securities Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related
Terms Agreement, each dated March 1, 2000, among the Originator, the Seller and
the Underwriters.
1-25
<PAGE>
"Unpaid Class AF Interest Shortfall" means, as to each Class of Class
AF Certificates and any Payment Date, the amount, if any, of the Class AF
Interest Shortfall applicable to such Class for the prior Payment Date, plus one
month's interest thereon (to the extent payment thereof is legally permissible)
at the Pass-Through Rate for such Class.
"Unpaid Class BF-1 Interest Shortfall" means, as to any Payment Date,
the amount, if any, of the Class BF-1 Interest Shortfall for the prior Payment
Date, plus one month's interest thereon (to the extent payment thereof is
legally permissible) at the Class BF-1 Pass-Through Rate.
"Unpaid Class BF-1 Liquidation Loss Interest Shortfall" means, as to
any Payment Date, the amount, if any, of the Class BF-1 Liquidation Loss
Interest Shortfall for the prior Payment Date, plus one month's interest thereon
(to the extent payment thereof is legally permissible) at the Class BF-1
Pass-Through Rate.
"Unpaid Class BF-2 Interest Shortfall" means, as to any Payment Date,
the amount, if any, of the Class BF-2 Interest Shortfall for the prior Payment
Date, plus one month's interest thereon (to the extent payment thereof is
legally permissible) at the Class BF-2 Pass-Through Rate.
"Unpaid Class MF-1 Interest Shortfall" means, as to any Payment Date,
the amount, if any, of the Class MF-1 Interest Shortfall for the prior Payment
Date, plus one month's interest thereon (to the extent payment thereof is
legally permissible) at the Class MF-1 Pass-Through Rate.
"Unpaid Class MF-1 Liquidation Loss Interest Shortfall" means, with
respect to any Payment Date, the amount, if any, of the Class MF-1 Liquidation
Loss Interest Shortfall for the prior Payment Date, plus one month's interest
thereon (to the extent payment thereof is legally permissible) at the Class MF-1
Pass-Through Rate.
"Unpaid Class MF-2 Interest Shortfall" means, as to any Payment Date,
the amount, if any, of the Class MF-2 Interest Shortfall for the prior Payment
Date, plus one month's interest thereon (to the extent payment thereof is
legally permissible) at the Class MF-2 Pass-Through Rate.
"Unpaid Class MF-2 Liquidation Loss Interest Shortfall" means, with
respect to any Payment Date, the amount, if any, of the Class MF-2 Liquidation
Loss Interest Shortfall for the prior Payment Date, plus one month's interest
thereon (to the extent payment thereof is legally permissible) at the Class MF-2
Pass-Through Rate.
"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.
1-26
<PAGE>
"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.
"Weighted Average Pass-Through Rate" means, for any Payment Date, with
respect to any Loan, the sum of (i) the weighted average (expressed as a
percentage and rounded to four decimal places) of the Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class
BF-1 and Class BF-2 Pass-Through Rates, weighted on the basis of the respective
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class
MF-1, Class MF-2, Class BF-1 and Class BF-2 Principal Balances for such Payment
Date.
SECTION 1.03. Calculations. Except as otherwise provided in this
Agreement, all interest rate and basis point calculations under this Agreement
will be made on the basis of a 360-day year and twelve 30-day months and will be
carried out to at least three decimal places.
1-27
<PAGE>
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 2000-B. The Trust
shall be administered pursuant to the provisions of this Agreement for the
benefit of the Certificateholders and the Class C 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 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 C
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.
2-1
<PAGE>
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 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 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 of the
mortgages, deeds of trust and security deeds relating to the Initial
Loans.
l. Evidence of the deposit of $9,492,242.17 in the Pre-Funding
Account.
m. Evidence of the deposit of $0.00 in the Capitalized
Interest Account.
2-2
<PAGE>
n. Letters from each of the Rating Agencies evidencing the
following ratings for the Certificates:
Class S&P Rating Moody's Rating Duff & Phelps
Rating
- --------------------- --------------- ------------------- -----------------
AF-1................. AAA Aaa AAA
AF-2................. AAA Aaa AAA
AF-3................. AAA Aaa AAA
AF-4................. AAA Aaa AAA
AF-5................. AAA Aaa AAA
AF-6................. AAA Aaa AAA
MF-1................. AA Aa2 AA
MF-2................. A A2 A
BF-1................. BBB Baa2 BBB+
BF-2................. BBB- Baa3 BBB
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 C 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 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:
2-3
<PAGE>
(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 REMIC) or the
Certificateholders or Class C 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, Moody's, Duff &
Phelps 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
(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, Moody's, Duff & Phelps, the Underwriters and
the Trustee) that is in form, substance and methodology the same as
that dated March 27, 2000 and delivered under Section 2.02(d) of this
Agreement, except that it shall address the Subsequent Loans and their
conformity
2-4
<PAGE>
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 AF
Certificates as of the Closing Date by S&P, Moody's or Duff & Phelps
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 C 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.
SECTION 2.05. REMIC Provisions.
a. The Originator, as Servicer, and the Class C Certificateholder, by
acceptance thereof, each agrees that, in accordance with the requirements of
Section 860D(b)(1) of the Code, the federal tax return of the Trust for its
first taxable year shall provide an election for the Trust (exclusive of the
Prefunding Account and the Capitalized Interest Account 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 the Trust 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. For
purposes of the REMIC election (i) the Certificates shall be designated as the
"regular interests" in the REMIC and (ii) the Class C Certificate shall be
designated as the sole class of "residual interests" in the REMIC. The Trustee
shall not permit the creation of any "interests" in the REMIC (within the
meaning of the REMIC Provisions) other than the Certificates and the Class C
Certificate.
2-5
<PAGE>
b. The Certificates are being issued in eleven classes. The following
terms of the Certificates are irrevocably established as of the Closing Date:
Original Class
Class Pass-Through Rate Per Annum Principal Balance
- ----------- ------------------------------------------------ -----------------
Class AF-1 6.94% $ 321,740,000
Class AF-2 7.34% $ 186,150,000
Class AF-3 7.52% $ 80,570,000
Class AF-4 7.87% $ 48,620,000
Class AF-5 8.15% $ 75,420,000
Class AF-6 7.80% $ 97,500,000
Class MF-1 8.14% $ 59,300,000
Class MF-2 8.62 $ 50,500,000
Class BF-1 a floating rate equal to the Weighted Average $ 30,200,000
Loan Rate, but in no event greater than 9.44%
Class BF-2 a floating rate equal to the Weighted Average $ 35,000,000
Loan Rate, but in no event greater than 10.00%
Class P None $ 100
c. The Closing Date, which is the day on which the Trust will issue all
of its regular and residual interests, is hereby designated as the "startup day"
of the REMIC within the meaning of Section 860G(a)(9) of the Code.
d. After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall (i) accept any contribution of assets to the
Trust, (ii) dispose of any portion of the Trust other than as provided in
Sections 3.06, 3.07 and 8.06, (iii) engage in any transaction that would result
in the imposition of tax on "prohibited transactions," as defined in Section
860F(a)(1) of the Code, (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
Trust 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 Trust as a REMIC or the status of the Certificates and Class C
Certificate as "regular interests" and the sole class of "residual interests,"
respectively, therein, in each case for federal income tax purposes, (B) affect
the distributions payable hereunder to the Certificateholders or the Class C
Certificateholder or (C) result in the imposition of any lien, charge or
encumbrance upon the Trust.
e. 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 Loan, 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
Trust of such property subsequent to the period then
2-6
<PAGE>
permitted by the Code will not result in the imposition of any taxes on
"prohibited transactions" of the Trust, as defined in Section 860F of the Code,
or cause the Trust to fail to qualify as a REMIC at any time that the
Certificates or Class C Certificate are outstanding. The Servicer shall manage,
conserve, protect and operate such real property, or any personal property
incident thereto, so that such property will not fail to qualify as "foreclosure
property," as defined in Section 860G(a)(8) of the Code, and that the
management, conservation, protection and operation of such property will not
result in the receipt by the Trust of any income attributable to any asset which
is neither a qualified mortgage nor a permitted investment within the meaning of
the REMIC Provisions.
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 June 27, 2000
("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 Prepayment in Full was received by the Servicer, and no
such substitution shall take place after June 27, 2000.
(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.
2-7
<PAGE>
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.
2-8
<PAGE>
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 C
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 C 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 C
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 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
3-1
<PAGE>
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 C 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.
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
C 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 31 days as of the Cut-off Date if an Initial Loan or 30
days as of the related Cut-off Date or Subsequent Cut-off Date, if an
Additional Loan or 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.
3-2
<PAGE>
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 (calculated using the
Collateral Principal Balance, if applicable) for each Initial Loan is
not greater than 100%. The Combined LTV for each Additional Loan and
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 C 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.
3-3
<PAGE>
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. 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.
3-4
<PAGE>
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 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. Title Insurance. Each Loan is covered by an American Land
Title Association lender's title insurance policy.
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 C 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 C 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 C
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:
3-5
<PAGE>
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; (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 2030, no Additional Loan has a final scheduled
payment date later than March 2030 and no such Subsequent Loan has a
final scheduled payment date later than May 2030; (iv) none had a
principal balance at origination of more than $360,000; and (v) none of
the Initial or Additional Loans have a Loan Interest Rate less than
7.03%.
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. 78.15% (by Scheduled Principal Balance) of the
Initial Loans are secured by a first priority lien, 21.30% by a second
priority lien and 0.55% 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 23.00% and not more than 0.70%
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 25.97%. As of the Subsequent Transfer Date, such
percentage of debt consolidation loans will not be greater than 27.00%.
c. Geographic Concentrations. By Cut-off Date Principal
Balance, 10.10% of the Initial and Additional Loans are secured by
property located in California, 5.39% in Florida and 5.52% in Ohio. No
other state represents more than 5.00% of the aggregate Cut-off Date
Principal Balances of the Initial and Additional Loans.
3-6
<PAGE>
The weighted average (by Scheduled Principal Balance) of the
debt-to-income ratio of the Loans as of the Post-Funding Payment Date
will not be more than 44.00%.
The percentage (by Scheduled Principal Balance) of the Loans
as of the Post-Funding Payment Date which are owner-occupied will be at
least 98.00%.
The percentage (by Scheduled Principal Balance) of the Loans
as of the Post-Funding Payment Date which are single family will be at
least 95.00%.
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 C
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.
3-7
<PAGE>
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 Certificateholders' or the Class C 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 C 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 (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
3-8
<PAGE>
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, Moody's
and Duff & Phelps.
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 C 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.
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
3-9
<PAGE>
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 C
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.
3-10
<PAGE>
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
-----------------------------------------------------------
SECTION 4.01. Transfer of Loans.
a. On or prior to the Closing Date, or the Subsequent Transfer Date in
the case of Subsequent Loans, 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 Custodian, 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. The Originator shall take any other actions necessary to maintain
the perfection of such security interest.
b. If at any time during the term of this Agreement the Originator does
not have a long-term senior debt rating of A- or higher from S&P, Moody's (if
rated by Moody's) and Duff & Phelps (if rated by Duff & Phelps), (i) the
Originator shall within 30 days execute and deliver to the Trustee (if it has
not previously done so) endorsements of each Loan and assignments in recordable
form of each mortgage, deed of trust or security deed securing a Loan, and (ii)
the Trustee, at the Originator's expense, shall within 60 days file in the
appropriate recording offices the assignments to the Trustee on behalf of the
Trust of each mortgage, deed of trust or security deed securing a Loan;
provided, however, that the recording of such assignments shall not be required
if the Trustee receives written confirmation from S&P, Moody's and Duff & Phelps
that the ratings of the Certificates would not be reduced or withdrawn by the
failure to execute and file such assignments; provided further, however, that
the recording of such assignments shall not be required if the Originator
delivers an Opinion of Counsel to the effect that such assignment and
recordation is not necessary to effect the assignment to the Trustee of the
Originator's lien on the real property securing each Loan.
c. If, as of the Post-Funding Payment Date, the aggregate Scheduled
Principal Balance of Loans secured by real property located in Maryland
("Maryland Loans") exceeds 10% of the Pool Scheduled Principal Balance, the
Originator shall, within sixty (60) days, submit to the appropriate recording
offices the assignments to the Trustee on behalf of the Trust of the number of
mortgages, deeds of trust or security deeds required to reduce to less than 10%
of the Pool Scheduled Principal Balance the aggregate Scheduled Principal
Balance of Maryland Loans as to which such assignments are not recorded.
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).
4-1
<PAGE>
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.
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.
5-1
<PAGE>
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 C 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: (1) 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,
(2) with respect to securities held in such account, such securities shall be
(i) certificated securities (as such term is used in N.Y. U.C.C. ss.
8-102(4)(i)), securities deemed to be certificated securities under applicable
regulations of the United States government, or uncertificated securities issued
by an issuer organized under the laws of the State of New York or the State of
Delaware, (ii) either (A) in the possession of such institution, (B) 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, (C) held in an
account of such institution with the Federal Reserve Bank of New York or the
Federal Reserve Bank of Minneapolis, or (D) in the case of uncertificated
securities, issued in the name of such institution, and (iii) 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 (3) 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 (2) 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(b). 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.
5-2
<PAGE>
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 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, P-1 by
Moody's (if rated by Moody's), and D-1+ by Duff & Phelps (if rated by
Duff & Phelps) 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, Moody's
and Duff & Phelps, 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 Moody's (if rated by Moody's) and at least
D-1+ from Duff & Phelps (if rated by Duff & Phelps) at the time of such
investment;
(vii) money market funds rated AAAm or AAAm-G by S & P; and
5-3
<PAGE>
(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.
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 C 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.
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,
5-4
<PAGE>
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 C 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 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
5-5
<PAGE>
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 C
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(b)
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.
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.
5-6
<PAGE>
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, 2001, 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 C
Certificateholder.
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class AF Certificates, the Class MF
Certificates, the Class BF Certificates and the Class P Certificates on or
before the third Business Day next preceding each Payment Date.
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 AF
Certificate and (if the Originator is not the Servicer) the Originator a
statement setting forth the following:
(i) the amount of such distribution to Holders of each Class
of Class AF Certificates allocable to interest, separately identifying
any Unpaid Class AF Interest Shortfall included in such distribution
and any remaining Unpaid Class AF Interest Shortfall after giving
effect to such distribution;
6-1
<PAGE>
(ii) the amount of such distribution to Holders of each Class
of Class AF Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class AF Formula
Distribution Amount for such Payment Date exceeds the Class AF
Distribution Amount for such Payment Date;
(iv) the Principal Balance of the Class AF Certificate after
giving effect to the distribution of principal on such Payment Date;
(v) the Pool Scheduled Principal Balance for such Payment
Date;
(vi) Senior Enhancement Percentage for the Certificates and
whether or not a Trigger Event exists;
(vii) the Pool Factor;
(viii) the number and aggregate principal balances of Loans
delinquent (a) 30-59 days, (b) 60-89 days and (c) 90 or more days;
(ix) the aggregate principal balance of any Defaulted Loans;
(x) the number and aggregate principal balance of Loans that
have been granted extensions to their payment schedules;
(xi) the Average Sixty-Day Delinquency Ratio Test for the
Loans (as set forth in Exhibit M hereto);
(xii) the Cumulative Realized Losses Test for the Loans (as
set forth in Exhibit M hereto);
(xiii) the number of Liquidated Loans, identifying such Loans
and the Net Liquidation Loss on such Loans; and
(xiv) the Pre-Funded Amount for such Payment Date.
The Trustee and the Servicer shall, if any Certificateholder, Class C
Certificateholder or Underwriter inquires by telephone, provide the information
contained in the most recent Monthly Report.
In the case of information furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount per Class AF
Certificate with a 1% Percentage Interest or per $1,000 denomination of Class AF
Certificate.
6-2
<PAGE>
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class AF Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Class AF Certificates during such calendar year. Such obligation of the
Certificate Registrar shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Certificate
Registrar pursuant to any requirements of the Code as from time to time in
force.
c. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class MF-1 Certificate a copy of the
monthly statement forwarded to the Holders of Class AF Certificates on such
Payment Date. The Servicer shall also furnish to the Trustee, which shall
forward such information to the Class MF-1 Certificateholders as part of their
monthly statement, the following information:
(i) the amount of such distribution to Holders of Class MF-1
Certificates allocable to interest, separately identifying with respect
to each Class of Class MF-1 Certificates any Unpaid Class MF-1 Interest
Shortfall included in such distribution and any remaining Unpaid Class
MF-1 Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class MF-1
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class MF-1 Formula
Distribution Amount for such Payment Date exceeds the Class MF-1
Distribution Amount for such Payment Date;
(iv) the Class MF-1 Principal Balance after giving effect to
the distribution of principal on such Payment Date;
(v) the Unpaid Class MF-1 Liquidation Loss Interest Shortfall
after giving effect to any distribution on such Payment Date pursuant
to Section 8.04(b)(10); and
(vi) the information set forth in clauses (v) through (xii) of
Section 6.05(b).
In the case of the information in clauses (i) through (v) above, the
amounts shall be expressed as a dollar amount per Class MF-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class MF-1 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class MF-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class MF-1 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially
6-3
<PAGE>
comparable information shall be provided by the Certificate Registrar pursuant
to any requirements of the Code as from time to time in force.
d. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class MF-2 Certificate a copy of the
monthly statements forwarded to the Holders of Class AF and Class MF-1
Certificates on such Payment Date. The Servicer shall also furnish to the
Trustee, which shall forward such information to the Class MF-2
Certificateholders as part of their monthly statement, the following
information:
(i) the amount of such distribution to Holders of Class MF-2
Certificates allocable to interest, separately identifying with respect
to each Class of Class MF-2 Certificates any Unpaid Class MF-2 Interest
Shortfall included in such distribution and any remaining Unpaid Class
MF-2 Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class MF-2
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class MF-2 Formula
Distribution Amount for such Payment Date exceeds the Class MF-2
Distribution Amount for such Payment Date;
(iv) the Class MF-2 Principal Balance after giving effect to
the distribution of principal on such Payment Date;
(v) the Unpaid Class MF-2 Liquidation Loss Interest Shortfall
after giving effect to any distribution on such Payment Date pursuant
to Section 8.04(b)(11); and
(vi) the information set forth in clauses (v) through (xii) of
Section 6.05(b).
In the case of the information in clauses (i) through (v) above, the
amounts shall be expressed as a dollar amount per Class MF-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class MF-2 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class MF-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class MF-2 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Certificate
Registrar pursuant to any requirements of the Code as from time to time in
force.
e. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class BF-1 Certificate a copy of the
monthly statements forwarded to the
6-4
<PAGE>
Holders of Class AF and Class MF Certificates on such Payment Date. The Servicer
shall also furnish to the Trustee, which shall forward such information to the
Class BF-1 Certificateholders as part of their monthly statement, the following
information:
(i) the amount of such distribution to Holders of Class BF-1
Certificates allocable to interest, separately identifying with respect
to each Class of Class BF-1 Certificates any Unpaid Class BF-1 Interest
Shortfall included in such distribution and any remaining Unpaid Class
BF-1 Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class BF-1
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class BF-1 Formula
Distribution Amount for such Payment Date exceeds the Class BF-1
Distribution Amount for such Payment Date;
(iv) the Class BF-1 Principal Balance after giving effect to
the distribution of principal on such Payment Date;
(v) the Unpaid Class BF-1 Liquidation Loss Interest Shortfall
after giving effect to any distribution on such Payment Date pursuant
to Section 8.04(b)(12); and
(vi) the information set forth in clauses (v) through (xii) of
Section 6.05(b).
In the case of the information in clauses (i) through (v) above, the
amounts shall be expressed as a dollar amount per Class BF-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class BF-1 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class BF-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class BF-1 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Certificate
Registrar pursuant to any requirements of the Code as from time to time in
force.
f. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class BF-2 Certificate a copy of the
monthly statements forwarded to the Holders of Class AF, Class MF and Class BF-1
Certificates on such Payment Date. The Servicer shall also furnish to the
Trustee, which shall forward such information to the Class BF-2
Certificateholders as part of their monthly statement, the following
information:
6-5
<PAGE>
(i) the amount of such distribution to Holders of Class BF-2
Certificates allocable to interest, separately identifying any Unpaid
Class BF-2 Interest Shortfall included in such distribution and any
remaining Unpaid Class BF-2 Interest Shortfall after giving effect to
such distribution;
(ii) the amount of such distribution to Holders of Class BF-2
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the sum of the Class BF-2
Formula Distribution Amount and the Class BF-2 Liquidation Loss
Principal Amount, if any, for such Payment Date exceeds the Class BF-2
Distribution Amount for such Payment Date;
(iv) the Class BF-2 Principal Balance after giving effect to
the distribution of principal on such Payment Date;
(v) the Class BF-2 Guaranty Payment, if any, for such Payment
Date; and
(vi) the information set forth in clauses (v) through (xii) of
Section 6.05(b).
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class BF-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class BF-2 Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class BF-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class BF-2 Certificate. Such obligation of
the Certificate Registrar shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Certificate
Registrar pursuant to any requirements of the Code as from time to time in
force.
g. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class P Certificate a copy of the monthly
statements forwarded to the Holders of Class AF, Class MF and Class BF
Certificates on such Payment Date. The Servicer shall also furnish to the
Trustee, which shall forward such information to the Class P Certifcateholders
as part of their monthly statement, the following information:
(i) the amount of such distribution to Holders of Class P
Certificates allocable to Prepayment Charges;
(ii) the amount of such distribution to Holders of Class P
Certificates allocable to principal; and
6-6
<PAGE>
(iii) the Class P Principal Balance after giving effect to the
distribution of principal on such Payment Date.
h. Copies of all reports and statements provided to the Trustee for the
Certificateholders shall also be provided to the Rating Agencies and the Class C
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 C 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 C Certificate, by acceptance thereof, irrevocably designates
and appoints the Servicer as its agent to perform the responsibilities of the
"tax matters person" on behalf of the Trust if, and during such time as, the
Servicer is not the holder of the Class C Certificate. The Servicer may, at its
expense, retain such outside assistance as it deems necessary in the performance
of its obligations under this paragraph. 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.
Each of the Holders of the Certificates or the Class C 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 Class C 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 C 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
6-7
<PAGE>
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 C Certificateholder for
the payment of any such tax or charge. The Trustee shall be entitled to withhold
from amounts otherwise distributable to the Class C Certificateholder any taxes
or charges payable by the Class C Certificateholder hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the 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 C 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 C 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.
6-8
<PAGE>
ARTICLE VII
SERVICE TRANSFER
----------------
SECTION 7.01. Events of Termination. "Event of Termination" means the
occurrence of any of the following:
a. 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;
b. Failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement in this Agreement (other
than a covenant or agreement which is elsewhere in this Section
specifically dealt with) which continues unremedied for 30 days;
c. 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;
d. 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;
e. The Servicer shall have commenced a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have consented to the entry of an order
for relief in an involuntary case under any such law, or shall have
consented to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of the Servicer or for any substantial part of its
property, or shall have made any general assignment for the benefit of
its creditors, or shall have failed to, or admitted in writing its
inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing;
f. The failure of the Servicer to be an Eligible Servicer; or
g. 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
7-1
<PAGE>
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 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.
7-2
<PAGE>
SECTION 7.04. Notification to Certificateholders and Class C
Certificateholder.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to S&P, to Moody's,
to Duff & Phelps, to the Certificateholders and to the Class C 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 Moody's, to Duff & Phelps, to the
Certificateholders and to the Class C 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 C 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.
7-3
<PAGE>
ARTICLE VIII
PAYMENTS
--------
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a
Certificate or Class C Certificate as of a Record Date shall be paid on the next
succeeding Payment Date by check mailed to such Certificateholder or Class C
Certificateholder at the address for such Certificateholder or Class C
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 C Certificateholder's
Percentage Interest of the Class AF-1 Distribution Amount, Class AF-2
Distribution Amount, Class AF-3 Distribution Amount, Class AF-4 Distribution
Amount, Class AF-5 Distribution Amount, Class AF-6 Distribution Amount, the
Class MF-1 Distribution Amount, the Class MF-2 Distribution Amount, the Class
BF-1 Distribution Amount, the Class BF-2 Distribution Amount, any Class BF-2
Guaranty Payment, the Class P Distribution Amount and the Class C Distribution
Amount, as applicable. Final payment of any Certificate or the Class C
Certificate shall be made only upon presentation and surrender of such
Certificate or Class C 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, and
the Class C Certificate as set forth in Exhibit I 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 C
Certificateholder required hereunder. The Trustee's corporate trust operations
department, with an office at 180 East Fifth Street, Third Floor, St. Paul,
Minnesota 55101, Attention: Tamara Schultz-Fugh, shall initially act as Paying
Agent. The Trustee shall require the Paying Agent (if other than the Trustee) to
agree in writing that all amounts held by the Paying Agent for payment hereunder
will be held in trust for the benefit of the Certificateholders and the Class C
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 C Certificate.
8-1
<PAGE>
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, 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 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. Class BF-2 Limited Guaranty.
a. No later than the Determination Date, the Servicer (if other than
the Guarantor) shall notify the Guarantor of the amount of the Class BF-2
Guaranty Payment (if any) for the related Payment Date. Not later than the
Business Day preceding each Payment Date, the Guarantor shall deposit the Class
BF-2 Guaranty Payment, if any, for such Payment Date into the Certificate
Account. Any Class BF-2 Guaranty Payment shall be distributable to Class BF-2
Certificateholders pursuant to Section 8.01.
b. The obligations of the Guarantor under this Section 8.03 shall not
terminate upon or otherwise be affected by a Service Transfer pursuant to
Article VII of this Agreement.
c. The obligation of the Guarantor to provide the Class BF-2 Limited
Guaranty under this Agreement shall terminate on the Final Payment Date.
d. The obligation of the Guarantor to make the Class BF-2 Guaranty
Payments described in subsection (a) above shall be unconditional and
irrevocable. The Guarantor acknowledges that its obligation to make the Class
BF-2 Guaranty Payments described in subsection (a) above shall be deemed a
guaranty by the Guarantor of indebtedness of the Trust for money borrowed from
the Class BF-2 Certificateholders.
e. If the Guarantor fails to make a Class BF-2 Guaranty Payment in
whole or in part, the Guarantor shall promptly notify the Trustee, and the
Trustee shall promptly notify the Rating Agencies.
f. In consideration of providing the Class BF-2 Limited Guaranty, the
Guarantor shall be entitled to the Class BF-2 Guaranty Fee payable in accordance
with Section 8.04(b)(20).
8-2
<PAGE>
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);
(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 apply the Amount Available
for such Payment Date, to make payment in the following order of priority,
subject to Section 8.04(c) and the last sentence of this Section 8.04(b):
(1) if neither Conseco Finance Corp. nor a wholly owned
subsidiary of the Originator is the Servicer, to pay the Monthly
Servicing Fee and any other compensation owed to the Servicer pursuant
to Section 7.03;
(2) to pay the Class AF Formula Interest Distribution Amount
to the Class AF Certificateholders as follows:
(i) the amount in clause (a)(i) of the definition of
Class AF Formula Distribution Amount to the Class AF-1
Certificateholder; the amount in clause (a)(ii) of the
definition of Class AF Formula Distribution Amount to the
Class AF-2 Certificateholders; the amount in clause (a)(iii)
of the definition of Class AF Formula Distribution Amount to
the Class AF-3 Certificateholders; the amount in clause
(a)(iv) of the definition of Class AF Formula Distribution
Amount to the
8-3
<PAGE>
Class AF-4 Certificateholders; the amount in clause (a)(v) of
the definition of Class AF Formula Distribution Amount to the
Class AF-5 Certificateholders; the amount in clause (a)(vi) of
the definition of Class AF Formula Distribution Amount to the
Class AF-6 Certificateholders; or, if the Amount Available is
less than the amount necessary to pay all Class AF Formula
Interest Distribution Amounts, to each Class of Class AF
Certificates pro rata in accordance with its respective
entitlement to interest; and
(ii) to each Class of Class AF Certificates the
amount, if any, of the Unpaid Class AF Interest Shortfall of
such Class or, if the remaining Amount Available is less than
the amount necessary to pay all Unpaid Class AF Interest
Shortfalls, pro rata to each Class of Class AF Certificates
based on the Unpaid Class AF Interest Shortfall of each such
Class;
(3) after payment of the amounts specified in clauses (1) and
(2) above, to the Class MF-1 Certificateholders the Class MF-1 Formula
Interest Distribution Amount;
(4) after payment of the amounts specified in clauses (1)
through (3) above, to the Class MF-2 Certificateholders the Class MF-2
Formula Interest Distribution Amount;
(5) after payment of the amounts specified in clauses (1)
through (4) above, to the Class BF-1 Certificateholders the Class BF-1
Formula Interest Distribution Amount;
(6) after payment of the amounts specified in clauses (1)
through (5) above, to pay principal in respect of the Class AF
Certificates as follows:
(i) if there is a Class AF Principal Deficiency
Amount for such Payment Date, the remaining Amount Available
pro rata to each Class of Class AF Certificates based on the
Class Principal Balance of each Class; and
(ii) if there is no Class AF Principal Deficiency
Amount for such Payment Date, the remaining Amount Available
up to the Class AF Formula Principal Distribution Amount as
follows:
(A) if the remaining Amount Available is
less than the Class AF Formula Principal Distribution
Amount, then pro rata to each Class of Class AF
Certificates based upon the amounts that would have
been distributed pursuant to clause (B), below, had
the remaining Amount Available been at least equal to
the Class AF Formula Principal Distribution Amount;
(B) if the remaining Amount Available is not
less than the Class AF Formula Principal Distribution
Amount, then
8-4
<PAGE>
(a) to the Class AF-6
Certificateholders, the Class AF-6 Lockout
Principal Distribution Amount, if any;
(b) to the Class AF-1
Certificateholders, any remaining Class AF
Formula Principal Distribution Amount, but
in no event more than is necessary to reduce
the Class AF-1 Principal Balance to zero;
(c) to the Class AF-2
Certificateholders, any remaining Class AF
Formula Principal Distribution Amount, but
in no event more than is necessary to reduce
the Class AF-2 Principal Balance to zero;
(d) to the Class AF-3
Certificateholders, any remaining Class AF
Formula Principal Distribution Amount, but
in no event more than is necessary to reduce
the Class AF-3 Principal Balance to zero;
(e) to the Class AF-4
Certificateholders, any remaining Class AF
Formula Principal Distribution Amount, but
in no event more than is necessary to reduce
the Class AF-4 Principal Balance to zero;
(f) to the Class AF-5
Certificateholders, any remaining Class AF
Formula Principal Distribution Amount, but
in no event more than is necessary to reduce
the Class AF-5 Principal Balance to zero;
and
(g) to the Class AF-6
Certificateholders, any remaining Class AF
Formula Principal Distribution Amount;
(7) after payment of the amounts specified in clauses (1)
through (6) above, to the Class MF-1 Certificateholders the Class MF-1
Formula Principal Distribution Amount;
(8) after payment of the amounts specified in clauses (1)
through (7) above, to the Class MF-2 Certificateholders the Class MF-2
Formula Principal Distribution Amount;
(9) after payment of the amounts specified in clauses (1)
through (8) above, to the Class BF-1 Certificateholders the Class BF-1
Formula Principal Distribution Amount;
(10) after payment of the amounts specified in clauses (1)
through (9) above, to the Class MF-1 Certificateholders the Class MF-1
Formula Liquidation Loss Interest Amount;
8-5
<PAGE>
(11) after payment of the amounts specified in clauses (1)
through (10) above, to the Class MF-2 Certificateholders the Class MF-2
Formula Liquidation Loss Interest Amount;
(12) after payment of the amounts specified in clauses (1)
through (11) above, to the Class BF-1 Certificateholders the Class BF-1
Formula Liquidation Loss Interest Amount;
(13) after payment of the amounts specified in clauses (1)
through (12) above, to the Class BF-2 Certificateholders as follows:
(i) the Class BF-2 Formula Interest Distribution
Amount; and
(ii) the Class BF-2 Formula Principal Distribution
Amount;
(14) if the Class Principal Balance of each class of
Certificate has been reduced to zero, to the Class P Certificateholders
until the Class P Principal Balance is reduced to zero;
(15) if Conseco Finance Corp. or a wholly owned subsidiary of
Conseco Finance Corp. is the Servicer, after payment of the amounts
specified in clauses (1) through (14) above, to pay the Servicer the
Monthly Servicing Fee;
(16) after payment of the amounts specified in clauses (1)
through (15) above, to reimburse the Servicer or the Trustee, as
applicable, for any unreimbursed Advances made with respect to the
Loans in respect of current or prior Payment Dates;
(17) if such Payment Date is on or after the Additional
Principal Entitlement Date, then, pursuant to Section 8.06(f), after
payment of the amounts specified in clauses (1) through (16) above, the
Additional Principal Distribution Amount to the Certificates as payment
of principal in the following order of priority, and in no case in
excess of the Class Principal Balance of any Class of Certificates:
(i) first to the Class AF-6 Certificates until
paid in full;
(ii) then to the Class AF Certificates, pro rata
based upon the Class Principal Balance of
each outstanding Class of Class AF
Certificates until paid in full;
(iii) then to the Class MF-1, Class MF-2, Class
BF-1 and Class BF-2 Certificates, pro rata
based on the Class Principal Balance of each
such Class, until paid in full;
(18) after payment of the amounts specified in clauses (1)
through (17) above, to reimburse the Class C Certificateholder for
expenses incurred by and reimbursable to it pursuant to Section 10.06;
8-6
<PAGE>
(19) after payment of the amounts specified in clauses (1)
through (18) above, to reimburse the Guarantor for any prior
unreimbursed Class BF-2 Guaranty Payments;
(20) after payment of the amounts specified in clauses (1)
through (19) above, to pay the Class BF-2 Guaranty Fee to the
Guarantor; and
(21) after payment of the amounts specified in clauses (1)
through (20) above, to pay the remainder, if any, of the Amount
Available to the Class C Certificateholder.
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(b),
distribute all funds then in the Certificate Account to Certificateholders, to
the extent of such funds, on such Payment Date.
c. 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 AF Certificates until reduced to zero, then to the Class
MF-1, Class MF-2 and Class BF-1 Certificates in that order of priority, and any
amount withdrawn from the Capitalized Interest Account and deposited in the
Certificate Account shall be applied solely as described in Section 8.07.
d. 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.
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 C Certificateholder's Purchase Option or Auction
Sale; Additional Principal Distribution Amount.
a. The Class C 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 (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
8-7
<PAGE>
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 AF
Formula Interest Distribution Amount, the Class MF-1 Formula Interest
Distribution Amount, the Class MF-1 Formula Liquidation Loss Interest
Distribution Amount, the Class MF-2 Formula Interest Distribution
Amount, the Class MF-2 Formula Liquidation Loss Interest Distribution
Amount, the Class BF-1 Formula Interest Distribution Amount, the Class
BF-1 Formula Liquidation Loss Interest Distribution Amount and the
Class BF-2 Formula Interest 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 C 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 20% of the
Cut-off Date Pool Principal Balance,
(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 C 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 C Certificateholder shall provide to the
Trustee (at the Class C 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 C
Certificateholder the Loan Files pertaining to the Loans being purchased.
c. The Class C Certificateholder may assign its rights under this
Section 8.06, separately from its other rights as Holder of the Class C
Certificate, by giving written notice of such assignment to the Trustee.
Following the Trustee's receipt of such notice of assignment, the
8-8
<PAGE>
Trustee shall recognize only such assignee (or its assignee in turn) as the
Person entitled to exercise the purchase option set forth in Section 8.06(a).
d. The Servicer shall notify the Trustee and the Class C
Certificateholder (whether or not the Class C Certificateholder has then
assigned its rights under this Section 8.06 pursuant to subsection (c)) no later
than two Business Days after the Determination Date relating to the first Due
Period which includes the date on which the Pool Scheduled Principal Balance
first becomes less than 20% of the Cut-off Date Pool Principal Balance, to the
effect that the Pool Scheduled Principal Balance is then less than 20% of the
Cut-off Date Pool Principal Balance.
e. If the Class C Certificateholder (or its assignee) 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 specified in subsection (d), then promptly after the
following Payment Date the Trustee shall begin a process for soliciting bids in
connection with an auction for the Loans. The Trustee shall provide the Class C
Certificateholder (or its assignee) written notice of such auction at least 10
Business Days prior to the date bids must be received in such auction (the
"Auction Date").
If at least two bids are received, the Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Trustee shall accept the
highest of such remaining bids if it is equal to or in excess of the greater of
(i) the Minimum Purchase Price and (ii) the fair market value of the Loans and
related property (such amount being referred to as the "Minimum Auction Price").
If less than two bids are received or the highest bid after the resolicitation
process is completed is not equal to or in excess of the Minimum Auction Price,
the Trustee shall not consummate such sale. If a bid meeting the Minimum
Purchase Price is received, then the Trustee may, and if so requested by the
Class C Certificateholder shall, consult with a financial advisor, which may be
an underwriter of the Certificates, to determine if the fair market value of the
Loans and related property has been offered.
If the first auction conducted by the Trustee does not produce any bid
at least equal to the Minimum Auction Price, then the Trustee shall, beginning
on the Payment Date occurring approximately three months after the Auction Date
for the failed first auction, commence another auction in accordance with the
requirements of this subsection (e). If such second auction does not produce any
bid at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Payment Date occurring approximately three months after the
Auction Date for the failed second auction, commence another auction in
accordance with the requirements of this subsection (e), and shall continue to
conduct similar auctions approximately every three months thereafter until the
earliest of (i) delivery by the Class C Certificateholder or its assignee of
notice of exercise of its purchase option under subsection (a), (ii) receipt by
the Trustee of a bid meeting the conditions specified in the preceding
paragraph, or (iii) the Payment Date on which the principal balance of all the
Loans is reduced to zero.
If the Trustee receives a bid meeting the conditions specified in this
subsection (e), then the Trustee's written acceptance of such bid shall
constitute a plan of complete liquidation within
8-9
<PAGE>
the meaning of Section 860F of the Code, and the Trustee shall release to the
winning bidder, upon payment of the bid purchase price, the Loan Files
pertaining to the Loans being purchased.
f. If the Class C Certificateholder (or its assignee) 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 specified in subsection (d), then on the following Payment
Date and each Payment Date thereafter the Certificateholders shall be entitled
to receive the Additional Principal Distribution Amount in the order of priority
described in Section 8.04(b)(17).
SECTION 8.07. Capitalized Interest Account.
a. On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $ received from the Seller pursuant to
Section 2.02(m). The Capitalized Interest Account shall be entitled "Capitalized
Interest Account, U.S. Bank Trust National Association as Trustee for the
benefit of holders of Home Equity Loan Certificates, Series 2000-B." On the
Payment Date occurring in each of April 2000, May 2000 and June 2000, if the
Monthly Report for such Payment Date indicates that the Amount Available (after
payment of the amount specified in clause (1) of Section 8.04(b) and including
in the Amount Available only payments in respect of interest on the Loans) is
not sufficient to pay the Class AF Formula Interest Distribution Amount, the
Class MF-1 Formula Interest Distribution Amount, the Class MF-2 Formula Interest
Distribution Amount, and the Class BF-1 Formula Interest Distribution Amount,
the Trustee shall withdraw the amount of such deficiency, or the amount of funds
in the Capitalized Interest Account (net of any investment earnings thereon), if
less, and shall deposit such funds in the Certificate Account for distribution
on such Payment Date in order first to pay any deficiency in the Amount
Available to pay the Class AF Formula Interest Distribution Amount, second to
pay any deficiency in the Amount Available to pay the Class MF-1 Formula
Interest Distribution Amount, third to pay any deficiency in the Amount
Available to pay the Class MF-2 Formula Interest Distribution Amount, and fourth
to pay any deficiency in the Amount Available to pay the Class BF-1 Formula
Interest Distribution Amount.
b. The Capitalized Interest Account shall be part of the Trust but not
part of the REMIC. The Trustee on behalf of the Trust shall be the legal owner
of the Capitalized Interest Account. The Seller shall be the beneficial owner of
the Capitalized Interest Account, subject to the foregoing power of the Trustee
to transfer amounts in the Capitalized Interest Account to the Certificate
Account. Funds in the Capitalized Interest Account shall, at the direction of
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 Capitalized Interest Account
shall be taxable to the Seller.
c. Any funds remaining in the Capitalized Interest Account after the
Payment Date in June 2000 shall be distributed to the Seller. After such date no
further amounts shall be deposited in or withdrawn from the Capitalized Interest
Account. Any losses on such
8-10
<PAGE>
investments shall be deposited in the Capitalized Interest Account by the Seller
out of its own funds immediately as realized.
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 2000-B." Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee for the Holders of the
Certificates and the Class C 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
the 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.
8-11
<PAGE>
ARTICLE IX
THE CERTIFICATES AND THE CLASS C CERTIFICATE
--------------------------------------------
SECTION 9.01. The Certificates and the Class C Certificate. The Class
AF, the Class MF, the Class BF, the Class P and the Class C Certificate shall be
substantially in the forms set forth in Exhibits A, B, C, Q and I, 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 AF, the Class MF
and the Class BF Certificates shall be evidenced by (i) one or more Class AF-1
Certificates evidencing $321,740,000 in Original Class AF-1 Principal Balance,
(ii) one or more Class AF-2 Certificates evidencing $186,150,000 in Original
Class AF-2 Principal Balance, (iii) one or more Class AF-3 Certificates
evidencing $80,570,000 in Original Class AF-3 Principal Balance, (iv) one or
more Class AF-4 Certificates evidencing $48,620,000 in Original Class AF-4
Principal Balance, (v) one or more Class AF-5 Certificates evidencing
$75,420,000 in Original Class AF-5 Principal Balance, (vi) one or more Class
AF-6 Certificates evidencing $97,500,000 in Original Class AF-6 Principal
Balance, (vii) one or more Class MF-1 Certificates evidencing $59,300,000 in
Original Class MF-1 Principal Balance, (viii) one or more Class MF-2
Certificates evidencing $50,500,000 in Original Class MF-2 Principal Balance,
(ix) one or more Class BF-1 Certificates evidencing $30,200,000 in Original
Class BF-1 Principal Balance, (x) one or more Class BF-2 Certificates evidencing
$35,000,000 in Original Class BF-2 Principal Balance and (xi) one Class P
Certificate evidencing $100 in Original Class P Principal Balance, beneficial
ownership of such Classes of Certificates (other than the Class P Certificate)
to be held through Book-Entry Certificates in minimum dollar denominations of
$1,000 and integral multiples of $1.00 in excess thereof. The Class C
Certificate shall be evidenced by a single Class C Certificate issued on the
Closing Date to the Originator and shall represent 100% of the Percentage
Interest of the Class C Certificate.
The Certificates and the Class C 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 C 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 C Certificate, or did not hold such offices at the
date of such Certificates or Class C Certificate. No Certificate or Class C
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless such Certificate or Class C Certificate has been
executed by manual signature in accordance with this Section, and such signature
upon any Certificate or Class C Certificate shall be conclusive evidence, and
the only evidence, that such Certificates or Class C Certificate has been duly
executed and delivered hereunder. All Certificates and the Class C Certificate
shall be dated the date of their execution, except for those Certificates and
the Class C Certificate executed on the Closing Date, which shall be dated the
Closing Date.
9-1
<PAGE>
SECTION 9.02. Registration of Transfer and Exchange of Certificates and
the Class C 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 C Certificate
and of transfers and exchanges of Certificates and the Class C 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 C Certificate and transfers and exchanges of Certificates and the
Class C Certificate as provided herein. The Trustee will give prompt written
notice to Certificateholders, the Class C Certificateholder and the Servicer of
any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class P
or Class C 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 investment letter shall not be an expense of the
Trustee or the Originator. The Class P or Class C Certificateholder desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Originator and the Certificate Registrar against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
(2) No transfer of a Class MF, Class BF, Class P or Class C 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 Certificate or
Class C 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 C 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 the Certificate or
Class C 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.
9-2
<PAGE>
(3) Notwithstanding anything to the contrary contained herein, (A) no
Class C Certificate, nor any interest therein, shall be transferred, sold or
otherwise disposed of to a "disqualified organization," within the meaning of
Section 860E(e)(5) of the Code (a "Disqualified Organization"), including, but
not limited to, (i) the United States, a state or political subdivision thereof,
a foreign government, an international organization or an agency or
instrumentality of any of the foregoing, (ii) an organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the taxes
imposed by Chapter 1 of the Code and not subject to the tax imposed on unrelated
business income by Section 511 of the Code, or (iii) a cooperative described in
Section 1381(a)(2)(C) of the Code, and (B) prior to any registration of any
transfer, sale or other disposition of a Class C Certificate, the proposed
transferee shall deliver to the Trustee, under penalties of perjury, an
affidavit that such transferee is not a Disqualified Organization, with respect
to which the Trustee shall have no actual knowledge that such affidavit is
false, and the transferor and the proposed transferee shall each deliver 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 noneconomic residual interests and
transfers of any residual interest to or by a foreign person; provided, however,
that, upon the delivery to the Trustee of an Opinion of Counsel, in form and
substance satisfactory to the Trustee and rendered by Independent counsel, to
the effect that the beneficial ownership of a Class C Certificate by any
Disqualified Organization will not result in the imposition of federal income
tax upon the Trust or any Certificateholder or Class C 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 C
Certificate, or any interest therein, to a Disqualified Organization or the
registration thereof in the Certificate Register, such transfer, sale or other
disposition and any registration thereof, unless accompanied by the Opinion of
Counsel described in the preceding sentence, shall be deemed to be void and of
no legal force or effect whatsoever and such Disqualified Organization shall be
deemed not to be a Class C Certificateholder for any purpose hereunder,
including, but not limited to, the receipt of distributions on a Class C
Certificate, and shall be deemed to have no interest whatsoever in a Class C
Certificate. Each Class C Certificateholder, by his acceptance thereof, shall be
deemed for all purposes to have consented to the provisions of this Section
9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance with the
provisions of this Section 9.02(b) shall be deemed to be void and of no legal
force or effect whatsoever and such transferee shall be deemed not to be the
Certificateholder or Class C Certificateholder, as applicable, for any purpose
hereunder, including, but not limited to, the receipt of distributions on the
Certificate or Class C Certificate, and shall be deemed to have no interest
whatsoever in the Certificate or Class C Certificate.
(5) The Trustee shall give notice to the Rating Agencies promptly
following any transfer, sale or other disposition of a Class C Certificate.
c. At the option of a Certificateholder or a Class C Certificateholder,
Certificates and the Class C Certificate may be exchanged for other Certificates
or Class C Certificate of
9-3
<PAGE>
authorized denominations of a like aggregate original denomination, upon
surrender of such Certificates or the Class C Certificate to be exchanged at the
Corporate Trust Office. Whenever any Certificates or the Class C Certificate are
so surrendered for exchange, the Trustee shall execute and deliver the
Certificates or Class C Certificate which the Certificateholder or Class C
Certificateholder making the exchange is entitled to receive. Every Certificate
or Class C 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 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 or (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
9-4
<PAGE>
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 AF-1 Certificate, one Class AF-2 Certificate, one Class
AF-3 Certificate, one Class AF-4 Certificate, one Class AF-5 Certificate, one
Class AF-6 Certificate, one Class MF-1 Certificate, one Class MF-2 Certificate,
one Class BF-1 Certificate and one Class BF-2 Certificate, each in registered
form registered in the name of the Depository's nominee, Cede & Co., the total
face amount of which represents 100% of the 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 and the Class C 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.
SECTION 9.03. No Charge; Disposition of Void Certificates or Class C
Certificate. No service charge shall be made to a Certificateholder or Class C
Certificateholder for any transfer or exchange of a Certificate or a Class C
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 C
Certificate. All Certificates and Class C 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 C Certificate. If (a) any mutilated Certificate or Class C 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 C Certificate, and (b) there is delivered to the
Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate or Class C
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 C Certificate, a new Certificate
or Class C Certificate of like tenor and original denomination. Upon the
issuance of any new Certificate or Class C 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
9-5
<PAGE>
duplicate Certificate or Class C 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 C Certificate shall be found at
any time.
SECTION 9.05. Persons Deemed Owners. Prior to due presentation of a
Certificate or Class C 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 C Certificate is
registered as the owner of such Certificate or Class C 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 C
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 C 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 C Certificateholder with respect to their rights under this
Agreement or under the Certificates or the Class C 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 C 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 C Certificateholder, by receiving and holding a
Certificate or a Class C 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
C Certificateholder hereunder, regardless of the source from which such
information was derived.
SECTION 9.07. Authenticating Agents. The Trustee may appoint one or
more Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates or the Class C
Certificate. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class C Certificate by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class C Certificate "by the Trustee."
9-6
<PAGE>
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 C
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 C 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 C 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 C Certificateholder 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 C 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,
the Class C Certificateholder or otherwise.
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 C 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
10-1
<PAGE>
Article and the Trustee thereafter collects any of such amounts from others, the
Trust will repay such amounts collected to the Originator or the Servicer, as
the case may be, without interest.
SECTION 10.06. REMIC Tax Matters. If a Class C Certificateholder,
pursuant to Section 6.06, pays any taxes or charges imposed upon the Trust as a
REMIC or otherwise, such taxes or charges, except to the extent set forth in the
following proviso, shall be expenses and costs of the Trust and the Class C
Certificateholder shall be entitled to be reimbursed therefor out of the
Certificate Account as provided in Section 8.04; provided, however, that any
such taxes or charges shall not be expenses or costs of the Trust, nor will the
Class C Certificateholder be entitled to reimbursement therefor out of the
Certificate Account, if and to the extent that such taxes or charges resulted
from a failure (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.
10-2
<PAGE>
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.
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
11-1
<PAGE>
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 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
11-2
<PAGE>
of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so
proceeding. The reasonable expense of every such examination shall be
paid by the Servicer or, if paid by the Trustee, shall be reimbursed by
the Servicer upon demand; and
e. The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and shall not be liable for
any acts or omissions of such agents, attorneys or custodians if
appointed by it with due care hereunder.
SECTION 11.03. Trustee Not Liable for Certificates, Class C Certificate
or Loans. The Trustee assumes no responsibility for the correctness of the
recitals contained herein, in the Certificates or in the Class C 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 C 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.
11-3
<PAGE>
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses. The
Servicer agrees:
a. to pay to the Trustee reasonable compensation for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust) including the services provided in
connection with any auctions pursuant to Section 8.06(e);
b. except as otherwise expressly provided herein, to reimburse
the Trustee, to the extent requested by the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel, and reasonable compensation, expenses and
disbursements in connection with any auctions pursuant to Section
8.06(e)), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
c. to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of 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
(a) a long-term deposit rating from S&P of at least BBB or as shall be otherwise
acceptable to S&P, (b) have a long-term deposit rating from Moody's of at least
Baa2 or as shall be otherwise acceptable to Moody's and (c) a long-term deposit
rating from Duff & Phelps of at least BBB or as shall be otherwise acceptable to
Duff & Phelps. 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.
11-4
<PAGE>
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 Trustee as provided in
this Section 11.09, the Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to the Rating Agencies and to each
Certificateholder and the Class C Certificateholder at their
11-5
<PAGE>
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:
a. The Trustee is not, and shall not be deemed to be, either
in any individual capacity, as trustee hereunder or otherwise, a
creditor, or a joint venturer with or an Affiliate of, or acting in
concert or cooperation with, any 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 C Certificateholder, and not as a principal or in any
individual or personal capacity;
b. The Trustee shall not be personally liable for or obligated
to pay Obligors any affirmative claims asserted thereby, or responsible
to Certificateholders or the Class C Certificateholder for any offset
defense amounts applied against Loan payments, pursuant to such legal
actions;
c. The Trustee will pay, solely from available Trust monies,
affirmative claims for recovery by Obligors only pursuant to final
judicial orders or judgments, or judicially approved settlement
agreements, resulting from such legal actions;
d. The Trustee will comply with judicial orders and judgments
which require its actions or cooperation in connection with Obligors'
legal actions to recover affirmative claims against Certificateholders
and the Class C Certificateholder;
e. The Trustee will cooperate with and assist
Certificateholders and the Class C Certificateholder in their defense
of legal actions by Obligors to recover affirmative
11-6
<PAGE>
claims if such cooperation and assistance is not contrary to the
interests of the Trustee as a party to such legal actions and if the
Trustee is satisfactorily indemnified for all liability, costs and
expenses arising therefrom; and
f. The Originator hereby agrees to indemnify, hold harmless
and defend the Trustee, Certificateholders and the Class C
Certificateholder from and against any and all liability, loss, costs
and expenses of the Trustee, Certificateholders and the Class C
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(f) 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 the Class C
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.
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
11-7
<PAGE>
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).
11-8
<PAGE>
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:
a. Provide credit to any Certificateholder for the purpose of
enabling such Certificateholder to purchase Certificates;
b. Purchase any Certificates in an agency or trustee capacity;
or
c. 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. Paul, Minnesota, an office or agency where
Certificates or the Class C 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 C Certificate and this Agreement may be
served. On the date hereof the Trustee's office for such purposes is located at
180 East 5th Street, Second Floor, St. Paul, Minnesota 55101. The Trustee will
give prompt written notice to the Originator, the Seller, the Servicer, the
Certificateholders and the Class C 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 C Certificateholder
as set forth below) shall terminate on the earlier of (a) the Payment Date on
which the principal balance of all of the Loans is reduced to zero; or (b) the
Payment Date
12-1
<PAGE>
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
Joseph P. Kennedy, the late Ambassador of the United States to the Court of St.
James, living on the date hereof, and provided, further, that the Servicer's and
the Originator's representations and warranties and indemnities by the
Originator and the Servicer shall survive termination. Any termination of the
Trust must be conducted so as to qualify as a "qualified liquidation" of the
REMIC 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 or the Class C Certificateholder may surrender their
Certificates or the Class C 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 C Certificateholder mailed no later than the fifth Business Day of the
month of the Final Payment Date specifying (1) the Final Payment Date upon which
final payment on the Certificates and the Class C Certificate will be made upon
presentation and surrender of Certificates and the Class C Certificate at the
office or agency of the Trustee therein designated; (2) the amount of any such
final payment; and (3) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates and the Class C 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 C 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 C Certificateholder. In the event such notice is given in
connection with the sale of the Loans pursuant to Section 8.06, the Class C
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 upon such
deposit the Certificateholders and the Class C 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 and the Class C
Certificate, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of priority, to the Certificateholders and the
Class C Certificateholder on the Final Payment Date in proportion to their
respective Percentage Interests: (1) 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 (i) as to Class AF Certificates, the Class AF
Principal Balance and, together with any Unpaid Class AF Interest Shortfall and
one month's interest at the Pass-Through Rate for each Class of Class AF
Certificates on the Class Principal Balance, respectively, (ii) as to the Class
MF-1
12-2
<PAGE>
Certificates, the Class MF-1 Principal Balance, together with any Unpaid Class
MF-1 Interest Shortfall, any Unpaid Class MF-1 Liquidation Loss Interest
Shortfall and one month's interest at the Class MF-1 Pass-Through Rate on the
Class MF-1 Principal Balance, (iii) as to Class MF-2 Certificates, the Class
MF-2 Principal Balance, together with any Unpaid Class MF-2 Interest Shortfall,
any Unpaid Class MF-2 Liquidation Loss Interest Shortfall and one month's
interest at the Class MF-2 Pass-Through Rate on the Class MF-2 Principal
Balance, (iv) as to Class BF-1 Certificates, the Class BF-1 Principal Balance,
together with any Unpaid Class BF-1 Interest Shortfall any Unpaid Class BF-1
Liquidation Loss Interest Shortfall and one month's interest at the Class BF-1
Pass-Through Rate on the Class BF-1 Principal Balance, (v) as to Class BF-2
Certificates, the Class BF-2 Principal Balance, together with any Unpaid Class
BF-2 Interest Shortfall and one month's interest at the Class BF-2 Pass-Through
Rate on the Class BF-2 Principal Balance and (vi) as to the Class P Certificate,
the Class P Principal Balance and any Prepayment Charges; and (2) as to the
Class C Certificate, the amount which remains on deposit in the Certificate
Account (other than amounts retained to meet claims) after application pursuant
to clause (1) above; provided, that, any Class BF-2 Guaranty Payment deposited
in the Certificate Account shall be distributed only to the Class BF-2
Certificateholders. 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 C
Certificate.
d. In the event that all of the Certificateholders and the Class C
Certificateholder do not surrender their Certificates and the Class C
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 C Certificateholder to
surrender their Certificates and the Class C 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 C 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 C Certificateholder who have not
surrendered their Certificates or the Class C Certificate, as the case may be,
for cancellation, together with the final record list of Certificateholders and
the Class C Certificateholder, and the Originator shall take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and to contact the
Class C Certificateholder concerning its surrender of its Class C 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 C
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
to by Holders of Certificates representing, in the aggregate, 51% or more of the
Aggregate Certificate Principal Balance.
12-3
<PAGE>
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 C Certificateholder may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders or the Class C 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 the
Class C 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 C 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 C Certificateholder
shall bind every holder of every Certificate or the Class C 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 C
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 (a) 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 (b)
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 C
12-4
<PAGE>
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 C
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 (a) 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, (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the holders of
all Certificates then outstanding, (c) result in the disqualification of the
Trust as a REMIC under the Code, (d) adversely affect the status of the Trust as
a REMIC or the status of the Certificates as "regular interests" in the REMIC,
or (e) cause any tax (other than any tax imposed on "net income from foreclosure
property" under Section 860G(c)(1) of the Code that would be imposed without
regard to such amendment) to be imposed on the Trust, including, without
limitation, any tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code. This Agreement may not be amended without the
consent of the Class C 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 C
Certificateholder.
c. This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholder if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
d. Concurrently with the solicitation of any consent pursuant to this
Section 12.08, the Trustee shall furnish written notification to S&P, Moody's
and Duff & Phelps. 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, Moody's, Duff & Phelps, each
Certificateholder and the Class C Certificateholder.
e. It shall not be necessary for the consent of Certificateholders and
the Class C 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
12-5
<PAGE>
by Certificateholders and the Class C 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 C 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 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 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, Moody's and Duff
& Phelps shall be in writing and delivered or mailed to it at the appropriate
following address:
12-6
<PAGE>
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the Servicer:
Conseco Finance Corp.
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the Trustee:
U.S. Bank Trust National Association
Corporate Trust Department
180 East Fifth Street
Second Floor
St. Paul, Minnesota 55101
Attention: Tamara Schultz-Fugh
Telecopier Number: (651) 244-0089
If to S&P:
Standard & Poor's
55 Water Street
New York, New York 10041
Attention: Mortgage Surveillance
12-7
<PAGE>
If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
If to Duff & Phelps:
Duff & Phelps Credit Rating Co.
17 State Street, 12th Floor
New York, New York 10004
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 C 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.
12-8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized this 27th day of
March, 2000.
CONSECO FINANCE CORP.
By: /s/ Phyllis A. Knight
-----------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By: /s/ Phyllis A. Knight
-----------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: /s/ Laurie A. Howard
-----------------------------------
Laurie A. Howard
Vice President
12-9
<PAGE>
STATE OF INDIANA )
) ss.
COUNTY OF HAMILTON )
The foregoing instrument was acknowledged before me this 27th day of
March, 2000, by Phyllis A. Knight, a Senior Vice President and Treasurer of
Conseco Finance Corp., a Delaware corporation, on behalf of the corporation.
Notary Public
[SEAL]
STATE OF INDIANA )
) ss.
COUNTY OF HAMILTON )
The foregoing instrument was acknowledged before me this 27th day of
March, 2000, by Phyllis A. Knight, a Senior Vice President and Treasurer of
Conseco Finance Securitizations Corp., a Minnesota corporation, on behalf of the
corporation.
- --------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this 27th day of
March, 2000, by Laurie A. Howard, Vice President, of U.S. Bank Trust National
Association, a national banking association, on behalf of the national banking
association.
- --------------------
Notary Public
12-10
<PAGE>
EXHIBIT A
---------
FORM OF CLASS AF-[1][2][3][4][5][6] 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 AF-[1][2][3][4][5][6] No.
(Senior)
Cut-off Date: Pass-Through Rate: %
----------
as defined in the Pooling and Servicing
Agreement dated March 1, 2000 Denomination: $
---------------
First Payment Date: Aggregate Denomination of
April 17, 2000 all Class AF-[1][2][3][4][5][6]
Certificates: $
---------------
Servicer: Final Scheduled Payment Date:
Conseco Finance Corp. March 15, 2031 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:
----------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2000-B, CLASS AF-[1][2][3][4][5][6] (SENIOR)
---------------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that ________________________________ 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 2000-B,
Class AF-[1][2][3][4][5][6] issued by Conseco Finance Home Equity Loan Trust
2000-B (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 March 1, 2000, among Conseco Finance Corp., as
Originator, Servicer and Guarantor (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller") and U.S. Bank Trust National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is
A-1
<PAGE>
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 April
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class AF-[1][2][3][4][5][6] Certificates with an
aggregate Percentage Interest of at least 5% of the Class AF-[1][2][3][4][5][6]
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 AF-[1][2][3][4][5][6]
Distribution Amount and any Additional Principal Distribution Amount for such
Payment Date. Distributions of interest and principal on the Class
AF-[1][2][3][4][5][6] Certificates will be made primarily from amounts available
in respect of the Loans. The final scheduled Payment Date of this Certificate is
March 15, 2031 or the next succeeding Business Day if such March 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 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. Paul, 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
A-2
<PAGE>
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.
A-3
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-B 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 2000-B
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
A-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________ the within Certificate for Home Equity Loans, Series 2000-B,
and does hereby irrevocably constitute and appoint ________________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated: By:
------------------------- --------------------------------------
Signature
A-5
<PAGE>
EXHIBIT B
---------
FORM OF CLASS MF-[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 AF
CERTIFICATES [AND CLASS MF-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class MF-[1][2] No.
(Subordinate)
Cut-off Date: Pass-Through Rate: %
---------
as defined in the Pooling and
Servicing Agreement dated
March 1, 2000
First Payment Date: Denomination: $
----------------
April 17, 000
Servicer: Aggregate Denomination of
Conseco Finance Corp. all Class MF-[1][2] Certificates:
$
---------------
Final Scheduled Payment Date:
March 15, 2031 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:
---------------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2000-B, CLASS MF-[1][2] (SUBORDINATE)
--------------------------------------------
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
B-1
<PAGE>
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 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 2000-B,
Class MF-[1][2] issued by Conseco Finance Home Equity Loan Trust 2000-B (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
March 1, 2000, among Conseco Finance Corp., as Originator, Servicer and
Guarantor (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller") and U.S. Bank 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 April
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class MF-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class MF-[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 MF-[1][2] Distribution
Amount and any Additional Principal Distribution Amount for such Payment Date.
Distributions of interest and
B-2
<PAGE>
principal on the Class MF-[1][2] Certificates will be made primarily from
amounts available in respect of the Loans. The final scheduled Payment Date of
this Certificate is March 15, 2031 or the next succeeding Business Day if such
March 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 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. Paul, 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
B-3
<PAGE>
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
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-B 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 2000-B
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
B-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________ the within Certificate for Home Equity Loans, Series 2000-B,
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
<PAGE>
EXHIBIT C
---------
FORM OF CLASS BF-[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 AF[,
/AND] THE CLASS MF CERTIFICATES [AND THE CLASS BF-1 CERTIFICATES] AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Class BF-[1][2] No.
(Subordinate)
Cut-off Date: Pass-Through Rate: %
---------
as defined in the Pooling and (or, the Weighted Average Loan
Servicing Agreement dated Rate, if less)
March 1, 2000
First Payment Date: Denomination: $
---------------
April 17, 2000
Servicer: Aggregate Denomination of
Conseco Finance Corp. all Class BF-[1][2] Certificates:
$
---------------
Final Scheduled Payment Date:
March 15, 2031 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:
---------------
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 2000-B, CLASS BF-[1][2] (SUBORDINATE)
--------------------------------------------
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
C-1
<PAGE>
THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF COUNSEL
(SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND HOLDING
OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT 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 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 2000-B,
Class BF-[1][2], issued by Conseco Finance Home Equity Loan Trust 2000-B (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 [and payments due under the
Class BF-2 Limited Guaranty]). The Trust has been created pursuant to a Pooling
and Servicing Agreement (the "Agreement"), dated as of March 1, 2000, among
Conseco Finance Corp., as Originator, Servicer and Guarantor (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller") and U.S. Bank
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 April
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class BF-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class BF-[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
C-2
<PAGE>
Certificateholder's Percentage Interest of the Class BF-[1][2] Distribution
Amount [and] any Additional Principal Distribution Amount [and any Class BF-2
Guaranty Payment] for such Payment Date. Distributions of interest and principal
on the Class BF-[1][2] Certificates will be made primarily from amounts
available in respect of the Loans. The final scheduled Payment Date of this
Certificate is March 15, 2031 or the next succeeding Business Day if such March
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 [and the Class
BF-2 Limited Guaranty of the Guarantor], 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. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
C-3
<PAGE>
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.
C-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-B 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 2000-B
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
C-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Certificate for Home Equity Loans, Series 2000-B, 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-6
<PAGE>
EXHIBIT D
---------
FORM OF ASSIGNMENT
------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of March 1, 2000, 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 2000-B,
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 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 Loans, (vi) all rights under any title insurance policies, if
applicable, on any of the properties securing Initial Loans, (vii) all documents
contained in the Loan Files relating to the Initial Loans, (viii) amounts in the
Certificate Account, the Capitalized Interest Account and the Pre-Funding
Account (including all proceeds of investments of the funds in Certificate
Account) and (ix) 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 _____________________ , 2000.
CONSECO FINANCE SECURITIZATIONS CORP.
[Seal] By:
-------------------------------------
[Name]
[Title]
D-1
<PAGE>
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 March 1, 2000 (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 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 _____________, 2000.
-----------------------------------------
[Name]
[Title]
E-1
<PAGE>
EXHIBIT F
---------
FORM OF OPINION OF COUNSEL FOR THE ORIGINATOR
---------------------------------------------
The opinion of Dorsey & Whitney 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 (including the Class BF-2 Limited Guaranty contained
therein), the Certificates and the Class C Certificate.
2. The Pooling and Servicing Agreement (including the Class BF-2
Limited Guaranty contained therein) 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 C 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 C 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
F-1
<PAGE>
Agreement, the Certificates, the Class C Certificate, the hazard or flood
insurance policies applicable to any Loans or the Errors and Omissions
Protection Policy, (B) seeking to prevent the issuance of the Certificates or
the Class C 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 C Certificate, or (D) seeking
adversely to affect the federal income tax attributes of the Certificates or the
Class C 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 pursuant to the Pooling and
Servicing Agreement will qualify as a REMIC. Further, the
F-2
<PAGE>
Certificates will evidence ownership of the "regular interests" in the REMIC and
the Class C Certificate will evidence ownership of the single class of "residual
interest" in the REMIC. 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 Capitalized Interest Account and the
Pre-Funding Account) will not be subject to tax and the income of the Trust will
be taxable to the holders of interests therein, all in accordance with the
provisions of the Code concerning REMICs. Moreover, ownership of Certificates
will not be a factor in determining whether such owner is subject to Minnesota
income 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. ss.ss. 513.41 through 513.51), nor, should the Originator become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.
F-3
<PAGE>
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 2000-B (the "Trust") created pursuant
to the Pooling and Servicing Agreement dated as of March 1, 2000 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 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/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] [a Subsequent] Loan for the benefit of the creditor of
such [Initial/Subsequent] Loan, (iii) all rights the Seller may have against the
originating lender with respect to [Initial/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/Subsequent] Loans, (v) all rights under any title insurance policies,
if applicable, on any of the properties securing [Initial/Subsequent] Loans and
all rights under the Transfer Agreement dated March 1, 2000 between Conseco
Finance Corp. and the Seller, (vi) all documents contained in the Loan Files
relating to the [Initial/Subsequent] Loans, [(vii) amounts in the Certificate
Account, the Capitalized Interest Account and the Pre-Funding Account (including
all proceeds of investments of funds in the Certificate Account, (viii) the
Class BF-2 Limited Guaranty,] and (ix) all rights of Seller under the Transfer
Agreement, [(x)] 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 Class C 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
<PAGE>
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 ________________ , 2000.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
[Seal] By
--------------------------------------
[Name]
[Title]
G-2
<PAGE>
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 March 1, 2000
between the Company, Conseco Finance Securitizations Corp. and U.S. Bank Trust
National Association, as Trustee of Conseco Finance Home Equity Loan Trust
2000-B (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 __________, 2000.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
H-1
<PAGE>
EXHIBIT I
---------
FORM OF CLASS C CERTIFICATE
---------------------------
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS AF
CERTIFICATES, THE CLASS MF-1 CERTIFICATES, THE CLASS MF-2 CERTIFICATES, THE
CLASS BF-1 CERTIFICATES, THE CLASS BF-2 CERTIFICATES AND THE CLASS P CERTIFICATE
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.
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.
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 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 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 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
I-1
<PAGE>
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 THE AGREEMENT.
Class C No.
(Subordinate)
Cut-off Date: Percentage Interest:
As defined in the Pooling
and Servicing Agreement
dated March 1, 2000
First Payment Date:
April 17, 2000
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 2000-B
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 2000-B (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
March 1, 2000, 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
C Certificate is described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Class C 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 April
2000, so long as the Agreement has not been terminated, by check to the
registered Class C 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 difference between (A) the Amount Available, and (B) the sum
of (i) the Class AF Distribution Amount, (ii) the Class MF-1 Distribution
Amount, (iii) the Class MF-2 Distribution Amount, (iv) the Class BF-1
Distribution Amount, (v) the Class BF-2 Distribution Amount, (vi) the Monthly
Servicing Fee with respect to the Loans, (vii) any Additional Principal
Distribution Amount, (viii) amounts to reimburse the Class C Certificateholder
for reimbursable expenses incurred by them, (ix) amounts to reimburse the
Servicer or the Trustee, as applicable,
I-2
<PAGE>
for prior Advances with respect to the Loans, (x) amounts necessary to reimburse
the Originator for any previous unreimbursed Class BF-2 Guaranty Payments, (xi)
the Class BF-2 Guaranty Fee, and (xii) any Class P Distribution Amount. The
final scheduled Payment Date of this Class C Certificate is March 15, 2031 or
the next succeeding Business Day if such March 15 is not a Business Day.
The Class C Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Class C Certificateholder as provided
in the Agreement for payment hereunder and that the Trustee in its individual
capacity is not personally liable to the Class C 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 C 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 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 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 or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement.
This Class C Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Class C Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class C
Certificate for registration of transfer at the office or agency maintained by
the Trustee in Minneapolis or St. Paul, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class C Certificate evidencing the
same Class C Certificate will be issued to the designated transferee or
transferees.
I-3
<PAGE>
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 C 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 C 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 elects to be treated as a "real estate mortgage investment conduit" (a
"REMIC") under the Code for such taxable year and all subsequent taxable years.
The Certificates shall be "regular interests" in the REMIC and the Class C
Certificate shall be the "residual interest" in the REMIC. In addition, the
holder of this Class C 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.
I-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-B 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 2000-B
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
I-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________ the within Certificate for Home Equity Loans, Series
2000-B, 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-6
<PAGE>
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 March 1, 2000 among the Company, Conseco
Finance Securitizations Corp. and U.S. Bank Trust National Association, as
Trustee of Conseco Finance Home Equity Loan Trust 2000-B (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 _______________, 2000.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-1-1
<PAGE>
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 March 1, 2000 among the Company, Conseco
Finance Securitizations Corp. and U.S. Bank Trust National Association, as
Trustee of Conseco Finance Home Equity Loan Trust 2000-B (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 ______________, 2000.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-2-1
<PAGE>
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 March 1, 2000 among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2000-B (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 _______________, 2000.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-3-1
<PAGE>
EXHIBIT K
---------
FORM OF REPRESENTATION LETTER
-----------------------------
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Conseco Finance Corp.
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Certificates for Home Equity Loans, Series 2000-B, Class C
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 Corp., and _______________________
to determine its suitability as a purchaser of Certificates and to determine
that the exemption from registration relied upon by Conseco Finance 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
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
<PAGE>
Purchaser has reviewed the Prospectus Supplement dated March 1, 2000, to the
Prospectus dated March 1, 2000 (the "Prospectus") with respect to the
Certificates, and has been given such information concerning the Certificates,
the underlying home equity loans and Conseco Finance 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 C 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
C 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
<PAGE>
Executed at _______________________, ______________, this __________
day of _________________.
Purchaser's Name (Print)
By:
------------------------------------
Signature
Its:
-------------------------------
Address of Purchaser
Purchaser's Taxpayer
Identification Number
K-3
<PAGE>
EXHIBIT L
---------
LIST OF INITIAL AND ADDITIONAL LOANS
------------------------------------
[To Be Supplied]
L-1
<PAGE>
EXHIBIT M
---------
FORM OF MONTHLY REPORT
----------------------
CERTIFICATES FOR HOME EQUITY LOANS, SERIES 2000-B
Payment Date:
----------------------
1. Amount Available (including Monthly
Servicing Fee and including
Prepayment Charges ($__________))
-------------
2. Formula Principal Distribution Amount:
-------------
(a) Scheduled principal
-------------
(b) Principal Prepayments
-------------
(c) Liquidated Loans
-------------
(d) Repurchases
-------------
(e) Previously undistributed (a)-(d) amounts
-------------
(f) Pre-Funded Amount, if any
(only on Post-Funding Payment Date)
-------------
3. [Reserved]
-------------
4. Available Funds Pass-Through Rate
-------------
Class AF Certificates
- ---------------------
Interest
5. Aggregate current interest
(a) Class AF-1 Pass-Through Rate (6.94%)
-------------
(b) Class AF-1 Interest
-------------
(c) Class AF-2 Pass-Through Rate (7.34%)
-------------
(d) Class AF-2 Interest
-------------
(e) Class AF-3 Pass-Through Rate (7.52%)
-------------
(f) Class AF-3 Interest
-------------
(g) Class AF-4 Pass-Through Rate (7.87%)
-------------
(h) Class AF-4 Interest
-------------
(i) Class AF-5 Pass-Through Rate (8.15%)
-------------
(j) Class AF-5 Interest
-------------
M-1
<PAGE>
(k) Class AF-6 Pass-Through Rate (7.80%)
-------------
(l) Class AF-6 Interest
-------------
6. Amount applied to Unpaid Class AF Interest Shortfall
-------------
7. Remaining Unpaid Class AF Interest Shortfall
-------------
Class MF-1 Certificates
- -----------------------
8. Amount Available less all preceding
distributions and less Prepayment Charges
-------------
Interest on Class MF-1 Adjusted Principal Balance
9. Class MF-1 Adjusted Principal Balance
-------------
10. Current Interest
(a) Class MF-1 Pass-Through Rate (8.14%)
-------------
(b) Class MF-1 Interest
11. Amount applied to Unpaid Class MF-1 Interest Shortfall
-------------
12. Remaining Unpaid Class MF-1 Interest Shortfall
-------------
Class MF-2 Certificates
- -----------------------
13. Amount Available less all preceding
distributions and less Prepayment Charges
-------------
Interest on Class MF-2 Adjusted Principal Balance
14. Class MF-2 Adjusted Principal Balance
-------------
15. Current Interest
(a) Class MF-2 Pass-Through Rate (8.62%)
-------------
(b) Class MF-2 Interest
16. Amount applied to Unpaid Class MF-2 Interest Shortfall
-------------
17. Remaining Unpaid Class MF-2 Interest Shortfall
-------------
Class BF-1 Certificates
- -----------------------
18. Amount Available less all preceding
distributions and less Prepayment Charges
-------------
M-2
<PAGE>
Interest on Class BF-1 Adjusted Principal Balance
19. Class BF-1 Adjusted Principal Balance
-------------
. Current Interest
(a) Class BF-1 Pass-Through Rate (9.44%) (or the
Weighted Average Loan Rate, if less)
-------------
(b) Class BF-1 Interest
-------------
20. Amount applied to Unpaid Class BF-1 Interest Shortfall
-------------
21. Remaining Unpaid Class BF-1 Interest Shortfall
-------------
Class P Certificates
22. Prepayment Charges
-------------
(All prepayment premiums, penalties and similar charges
paid in connection with, and as a condition to,
prepayment in part or in full of a Loan)
Principal
23. 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 42.5% 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
Balances of Loans may not exceed 4.40% from
April 1, 2003 to March 31, 2004, 5.23% from
April 1, 2004 March 31, 2005, 5.50% from
April 1, 2005 to March 31, 2007, and
6.00% thereafter)
-------------
M-3
<PAGE>
24. Senior Enhancement Percentage:
(a fraction, expressed as a percentage:
-------------
(a) the numerator of which is the excess of (A) the
Pool Scheduled Principal Balance over (B) the
Principal Balance of the most senior class of
Certificates outstanding
-------------
(b) the denominator of which is the Pool Scheduled
Principal Balance
-------------
Class AF Certificates
25. Amount Available less all preceding distributions
-------------
26. Class AF-6 Lockout Percentage for such
Payment Date
-------------
27. Class AF principal distribution:1
(a) Class AF-6 Lockout Pro Rata Distribution Amount
-------------
(b) the Class AF Formula Principal Distribution Amount:
(i) Class AF-1
-------------
(ii) Class AF-2
-------------
(iii) Class AF-3
-------------
(iv) Class AF-4
-------------
(v) Class AF-5
-------------
(vi) Class AF-6
-------------
28. (a) Class AF-1 Principal Balance
-------------
(b) Class AF-2 Principal Balance
-------------
(c) Class AF-3 Principal Balance
-------------
(d) Class AF-4 Principal Balance
-------------
(e) Class AF-5 Principal Balance
-------------
(f) Class AF-6 Principal Balance
-------------
29. (a) Amount, if any, by which Class AF Formula Principal
Distribution Amount exceeds amounts distributed
pursuant to item (27)
-------------
- --------
1 If a Class AF Principal Deficiency Amount exists, the remaining
Amount Available is to be distributed pro rata to each Class of Class AF
Certificate based on the Class AF Principal Balance. If no Class AF Principal
Deficiency Amount exists, but the remaining Amount Available is less than the
Class AF Formula Principal Distribution Amount, then such remaining Amount
Available is to be distributed pro rata to each Class of Class AF Certificate
based on the amount distributable had such remaining Amount Available not been
less than the Class AF Formula Principal Distribution Amount.
M-4
<PAGE>
Class MF-1 Certificates
- -----------------------
30. Amount Available less all preceding distributions
-------------
Principal
31. Class MF-1 principal distribution
-------------
32. Class MF-1 Principal Balance
-------------
33. Amount, if any, by which Class MF-1 Formula Principal
Distribution Amount exceeds Class MF-1 Principal
Distribution Amount
-------------
Class MF-2 Certificates
- -----------------------
34. Amount Available less all preceding
distributions
-------------
Principal
35. Class MF-2 principal distribution
-------------
36. Class MF-2 Principal Balance
-------------
37. Amount, if any, by which the Class MF-2 Formula
Principal Distribution Amount exceeds the
Class MF-2 Principal Distribution Amount
-------------
Class BF-1 Certificates
- -----------------------
38. Amount Available less all preceding
distributions
-------------
Principal
39. Class BF-1 principal distribution
-------------
40. Class BF-1 Principal Balance
-------------
41. Amount, if any, by which Class BF-1 Formula Principal
Distribution Amount exceeds Class BF-1 Principal
Distribution Amount
-------------
Class MF-1 Certificates
- -----------------------
42. Amount Available less all preceding
distributions
-------------
M-5
<PAGE>
Liquidation Loss Interest
43. Amount applied to Class MF-1 Liquidation Loss Interest Amount
-------------
44. Class MF-1 Liquidation Loss Interest Shortfall
-------------
45. Amount applied to Unpaid Class MF-1 Liquidation Loss
Interest Shortfal
-------------
46. Remaining Unpaid Class MF-1 Liquidation Loss
Interest Shortfall
-------------
Class MF-2 Certificates
- -----------------------
47. Amount Available less all preceding distributions
-------------
Liquidation Loss Interest
48. Amount applied to Class MF-2 Liquidation Loss Interest Amount
-------------
49. Class MF-2 Liquidation Loss Interest Shortfall
-------------
50. Amount applied to Unpaid Class MF-2 Liquidation Loss
Interest Shortfall
-------------
51. Remaining Unpaid Class MF-2 Liquidation Loss
Interest Shortfall
-------------
Class BF-1 Certificates
- -----------------------
52. Amount Available less all preceding
distributions
-------------
Liquidation Loss Interest
53. Amount applied to Class BF-1 Liquidation Loss Interest Amount
-------------
54. Class BF-1 Liquidation Loss Interest Shortfall
-------------
55. Amount applied to Unpaid Class BF-1 Liquidation Loss
Interest Shortfall
-------------
56. Remaining Unpaid Class BF-1 Liquidation Loss
Interest Shortfall
-------------
Class BF-2 Certificates
- -----------------------
57. Amount Available less all preceding distributions
-------------
M-6
<PAGE>
Interest
58. Current interest
(a) Class BF-2 Pass-Through Rate (10.00%) (or the Weighted
Average Loan Rate, if less)
-------------
(b) Class BF-2 Interest
-------------
59. Amount applied to Unpaid Class
BF-2 Interest Shortfall
-------------
60. Remaining Unpaid Class BF-2
Interest Shortfall
-------------
Principal
61. Class BF-2 principal distribution
-------------
62. Amount, if any, by which Class BF-2
Formula Distribution Amount plus Class BF-2
Liquidation Loss Principal Amount exceeds
Class BF-2 Distribution Amount
-------------
63. Class BF-2 Guaranty Payment
-------------
64. Class BF-2 Principal Balance
-------------
65. Servicer
(a) Monthly Servicing Fee (if Originator or affiliate is
Servicer
-------------
(b) Reimbursement for unreimbursed Advances
-------------
Class AF, Class MF and Class BF Certificates
- ---------------------------------------------
66. Pool Scheduled Principal Balance
-------------
67. Pool Factor
-------------
68. Loans Delinquent:
30 - 59 days
-------------
60 - 89 days
-------------
90 or more days
-------------
M-7
<PAGE>
69. Principal Balance of Defaulted Loans
-------------
70. Principal Balance of Loans with Extensions
-------------
71. Number of Liquidated Loans and
Net Liquidation Loss
-------------
72. Number of Loans Remaining
-------------
73. Pre-Funded Amount
-------------
74. Reimbursement of Class C Certificateholder expenses
-------------
Guarantor
75. Class BF-2 Guaranty Fee
-------------
Class P Certificate
- -------------------
76. Class P Principal Distribution
-------------
77. Class P Principal Balance
-------------
Class C Certificate
- -------------------
78. Class C Distribution Amount
-------------
Please contact the Bondholder Relations Department of U.S. Bank Trust
National Association at (612) 224-0444 with any questions regarding this
Statement or your Distribution.
M-8
<PAGE>
EXHIBIT N
---------
FORM OF ADDITION NOTICE
-----------------------
_________________, 2000
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
March 1, 2000, 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 2000-B
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
<PAGE>
EXHIBIT O
---------
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
--------------------------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of March 1, 2000, 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 2000-B, 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 ______________________ , 2000.
CONSECO FINANCE CORP.
[Seal] By:
-------------------------------------
Name:
Title:
O-1
<PAGE>
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
March 1, 2000 (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 _______________, 2000.
By:
-------------------------------------
Name:
Title:
P-1
<PAGE>
EXHIBIT Q
---------
FORM OF CLASS P 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 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.
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
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.
Q-1
<PAGE>
Class P No. R-1
Cut-off Date: Denomination: $100.00
as defined in the Pooling and
Servicing Agreement dated
March 1, 2000
First Payment Date: Aggregate Denomination
April 17, 2000 of all Class P Certificates: $100.00
Servicer:
Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2000-B, CLASS P
----------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.--Two is the registered
owner of the undivided Percentage Interest represented by the original principal
amount set forth above in the Certificates for Home Equity Loans, Series 2000-B,
Class P, issued by Conseco Finance Home Equity Loan Trust 2000-B (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
March 1, 2000, among Conseco Finance Corp., as Originator, Servicer and
Guarantor (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller"), and U.S. Bank 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 April
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class P Certificates with an aggregate Percentage
Interest of at least 5% of the Class P 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 P Distribution Amount for such Payment Date.
Distributions on the Class P Certificates are limited in right of payment to
certain collections respecting the Loans. The final scheduled Payment Date of
this Certificate is March 15, 2031 or the next succeeding Business Day if such
March 15 is not a Business Day.
Q-2
<PAGE>
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator, the Seller or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement. Unless such opinion
is delivered, each person acquiring this Certificate will be deemed to represent
to the Trustee, the Originator, the Seller and the Servicer either (i) that such
person is neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to
Section 4975 of the Code, or (ii) that the purchase and holding of this
Certificate by such Plan will not result in the assets of the Trust being deemed
to be Plan assets and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee, the Originator 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. Paul, 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.
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.
Q-3
<PAGE>
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.
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-B 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 2000-B
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
----------------------------------
Authorized Officer
Q-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Certificate for Home Equity Loans,
Series 2000-B, 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
<PAGE>
Exhibit 4.4
TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
CONSECO FINANCE CORP.
Seller
dated as of
March 1, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS........................................................1
SECTION 1.1. General.............................................1
SECTION 1.2. Specific Terms......................................1
SECTION 1.3. Usage of Terms......................................3
SECTION 1.4. No Recourse.........................................3
ARTICLE II. CONVEYANCE OF THE INITIAL LOANS
AND THE INITIAL OTHER CONVEYED PROPERTY...........................4
SECTION 2.1. Conveyance of the Initial Loans and the Initial
Other Conveyed Property.........................4
SECTION 2.2. Purchase Price of Initial Loans.....................4
SECTION 2.3. Conveyance of Subsequent Loans and Subsequent
Other Conveyed Property.........................4
ARTICLE III. REPRESENTATIONS AND WARRANTIES...................................5
SECTION 3.1. Representations and Warranties of CFC...............5
SECTION 3.2. Representations and Warranties of CFSC..............7
ARTICLE IV. COVENANTS OF CFC..................................................9
SECTION 4.1. Protection of Title of CFSC and the Trust...........9
SECTION 4.2. Other Liens or Interests...........................10
SECTION 4.3. Indemnification....................................10
ARTICLE V. REPURCHASES.......................................................11
SECTION 5.1. Repurchase of Loans Upon Breach of Warranty........11
SECTION 5.2. Reassignment of Purchased Loans....................11
SECTION 5.3. Waivers............................................12
ARTICLE VI. MISCELLANEOUS....................................................12
SECTION 6.1. Liability of CFC...................................12
SECTION 6.2. Merger or Consolidation of CFC or CFSC.............12
SECTION 6.3. Limitation on Liability of CFC and Others..........13
SECTION 6.4. Amendment..........................................13
SECTION 6.5. Notices............................................14
SECTION 6.6. Merger and Integration.............................14
SECTION 6.7. Severability of Provisions.........................14
SECTION 6.8. Intention of the Parties...........................14
-i-
<PAGE>
SECTION 6.9. Governing Law......................................15
SECTION 6.10. Counterparts.......................................15
SECTION 6.11. Conveyance of the Initial Loans and the Initial
Other Conveyed Property to the Trust...........15
SECTION 6.12. Nonpetition Covenant...............................15
SCHEDULES
Schedule A -- Schedule of Initial and Additional Loans
EXHIBITS
Exhibit A -- Form of Subsequent Transfer Agreement
Exhibit B -- Form of Assignment
-ii-
<PAGE>
TRANSFER AGREEMENT
------------------
THIS TRANSFER AGREEMENT, dated as of March 1, 2000, executed between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Conseco Finance Corp., a Delaware corporation, as seller ("CFC").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, CFSC has agreed to purchase from CFC and CFC, pursuant to this
Agreement, is transferring to CFSC the certain home equity loans specified in
the Schedule of Initial and Additional Loans attached hereto as Schedule A (the
"Initial and Additional Loans") and the Initial Other Conveyed Property; and
WHEREAS, CFSC has agreed to purchase from CFC and CFC has agreed to
transfer to CFSC the Subsequent Loans and Subsequent Other Conveyed Property in
an amount set forth herein, prior to June 14, 2000.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, CFSC and CFC, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. General. The specific terms defined in this Article
include the plural as well as the singular. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of March 1, 2000, by and among Conseco Finance Securitizations Corp. (as
Seller), Conseco Finance Corp. (as Originator, Guarantor and Servicer), and U.S.
Bank Trust National Association, as Trustee (the "Trustee").
SECTION 1.2. Specific Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agreement" shall mean this Transfer Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means March 27, 2000.
<PAGE>
"Initial Other Conveyed Property" means all monies at any time paid or
payable on the Initial and Additional Loans or in respect thereof after the
Cut-off Date (excluding amounts due on or before the Cut-off Date but received
by CFC after the Cut-off Date), an assignment of security interests in the
related real estate, the Certificate Account (including all Eligible Investments
therein and all proceeds therefrom), all items contained in the Loan Files
relating to the Initial and Additional Loans, any and all other documents or
electronic records that CFC keeps on file in accordance with its customary
procedures relating to the Initial and Additional Loans, the Obligors or the
related real estate, property (including the right to receive future Liquidation
Proceeds) that secures an Initial Loan and that has been acquired by or on
behalf of the Trust pursuant to liquidation of such Initial Loan, and all
proceeds of the foregoing.
"Initial and Additional Loans" means the Loans listed on the Schedule
of Initial and Additional Loans attached hereto as Schedule A.
"Other Conveyed Property" means the Initial Other Conveyed Property
conveyed by CFC to CFSC pursuant to this Agreement together with any and all
Subsequent Other Conveyed Property conveyed by CFC to CFSC pursuant to each
Subsequent Transfer Agreement.
"Related Documents" means the Certificates, the Pooling and Servicing
Agreement, each Subsequent Transfer Agreement and the Underwriting Agreement
among CFC, CFSC and the underwriters of the Certificates. The Related Documents
to be executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of CFC's
representations and warranties hereunder or under any Subsequent Transfer
Agreement or any other event which requires the repurchase of a Loan by CFC
under the Pooling and Servicing Agreement.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of March 1, 2000, executed and delivered by Conseco Finance
Corp., as Originator, Servicer and Guarantor, Conseco Finance Securitizations
Corp., as Seller, and the Trustee.
"Schedule of Initial and Additional Loans" means the schedule of all
Loans sold and transferred pursuant to this Agreement which is attached hereto
as Schedule A.
"Schedule of Loans" means the Schedule of Initial and Additional Loans
attached hereto as Schedule A as supplemented by each Schedule of Subsequent
Loans attached to each Subsequent Transfer Agreement as Schedule A.
"Schedule of Subsequent Loans" means the schedule of all Loans sold and
transferred pursuant to a Subsequent Transfer Agreement which is attached to
such Subsequent
-2-
<PAGE>
Transfer Agreement as Schedule A, which Schedule of Subsequent Loans shall
supplement the Schedule of Initial and Additional Loans.
"Subsequent Loans" means the Loans specified in the Schedule of
Subsequent Loans attached as Schedule A to each Subsequent Transfer Agreement.
"Subsequent Other Conveyed Property" means the Subsequent Other
Conveyed Property conveyed by CFC to CFSC pursuant to each Subsequent Transfer
Agreement.
"Subsequent Transfer Agreement" shall have the meaning given in Section
2.3(b)(iii).
"Trust" means the trust created by the Pooling and Servicing Agreement,
the estate of which consists of the Trust Fund.
"Trustee" means 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 of the Trust, and any
successor trustee appointed and acting pursuant to the Pooling and Servicing
Agreement.
"Trust Property" means the property and proceeds of every description
conveyed by the Seller to the Trustee pursuant to the Pooling and Servicing
Agreement and pursuant to any Subsequent Transfer Instrument, together with the
Certificate Account, Capitalized Interest Account and Pre-Funding Account
(including all investments of the Certificate Account and all proceeds
therefrom).
SECTION 1.3. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Pooling and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
SECTION 1.4. No Recourse. Without limiting the obligations of CFC
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of CFC, or
of any predecessor or successor of CFC.
-3-
<PAGE>
ARTICLE II
CONVEYANCE OF THE INITIAL AND ADDITIONAL LOANS
AND THE INITIAL OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Initial and Additional Loans and the
Initial Other Conveyed Property. Subject to the terms and conditions of this
Agreement, CFC hereby sells, transfers, assigns, and otherwise conveys to CFSC
without recourse (but without limitation of its obligations in this Agreement or
in the Pooling and Servicing Agreement), and CFSC hereby purchases, all right,
title and interest of CFC in and to the Initial and Additional Loans and the
Initial Other Conveyed Property. It is the intention of CFC and CFSC that the
transfer and assignment contemplated by this Agreement shall constitute a sale
of the Initial and Additional Loans and the Initial Other Conveyed Property from
CFC to CFSC, conveying good title thereto free and clear of any Liens, and the
Initial and Additional Loans and the Initial Other Conveyed Property shall not
be part of CFC's estate in the event of the filing of a bankruptcy petition by
or against CFC under any bankruptcy or similar law.
SECTION 2.2. Purchase Price of Initial and Additional Loans.
Simultaneously with the conveyance of the Initial and Additional Loans and the
Initial Other Conveyed Property to CFSC, CFSC has paid or caused to be paid to
or upon the order of CFC approximately $990,082,857.83 by wire transfer of
immediately available funds (representing the proceeds to CFSC from the sale of
the Initial and Additional Loans after (i) deducting expenses of approximately
$425,000 incurred by CFSC in connection with such sale and (ii) depositing the
Pre-Funded Amount in the Pre-Funding Account.
SECTION 2.3. Conveyance of Subsequent Loans and Subsequent Other
Conveyed Property.
(a) Subject to the conditions set forth in paragraph (b) below
and the terms and conditions in the related Subsequent Transfer
Agreement, in consideration of CFSC's delivery on the related
Subsequent Transfer Date to or upon the order of CFC of an amount equal
to the purchase price of the Subsequent Loans (as set forth in the
related Subsequent Transfer Agreement), CFC hereby agrees to sell,
transfer, assign, and otherwise convey to CFSC without recourse (but
without limitation of its obligations in this Agreement and the related
Subsequent Transfer Agreement), and CFSC hereby agrees to purchase all
right, title and interest of CFC in and to the Subsequent Loans and the
Subsequent Other Conveyed Property described in the related Subsequent
Transfer Agreement.
(b) CFC shall transfer to CFSC, and CFSC shall acquire, the
Subsequent Loans and the Subsequent Other Conveyed Property to be
transferred on any Subsequent Transfer Date only upon the satisfaction
of each of the following conditions on or prior to such Subsequent
Transfer Date:
-4-
<PAGE>
(i) CFSC shall have provided the Trustee and the
Rating Agencies with an Addition Notice at least five Business
Days prior to the Subsequent Transfer Date and shall
have provided any information reasonably requested by the
Trustee with respect to the Subsequent Loans;
(ii) CFC 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) CFC shall have delivered to CFSC a duly
executed Subsequent Transfer Agreement substantially in the
form of Exhibit A hereto (the "Subsequent Transfer
Agreement"), 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 Agreement,
neither CFC nor CFSC shall be insolvent nor shall they have
been made insolvent by such transfer nor shall they be aware
of any pending insolvency;
(v) such transfer shall not result in a material
adverse tax consequence to the Trust (including the REMIC or
the Certificateholders or Class C Certificateholder;
(vi) the Pre-Funding Period shall not have ended; and
(vii) no Subsequent Loan will have a Combined LTV
greater than 100%, and;
(c) CFC covenants to transfer to CFSC pursuant to paragraph
(a) above Subsequent Loans with aggregate Scheduled Principal Balances
of approximately equal to $9,492,242.17; provided, however, that the
sole remedy of CFSC with respect to a failure of such covenant shall be
to enforce the provisions of Section 8.08 of the Pooling and Servicing
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of CFC. CFC makes the
following representations and warranties, on which CFSC relies in purchasing the
Initial and Additional Loans and the Initial Other Conveyed Property and in
transferring the Initial and Additional Loans and the Initial Other Conveyed
Property to the Trustee under the Pooling and Servicing Agreement. Such
representations are made as of the execution and delivery of this Agreement, but
shall survive the sale, transfer and assignment of the Initial and Additional
Loans and the Initial Other Conveyed Property hereunder and the sale, transfer
and assignment thereof by CFSC to the Trustee under the Pooling and Servicing
Agreement. CFC and CFSC agree that
-5-
<PAGE>
CFSC will assign to the Trustee all of CFSC's rights under this Agreement and
that the Trustee will thereafter be entitled to enforce this Agreement against
CFC in the Trustee's own name.
(a) Representations Regarding Loans. The representations and
warranties set forth in Sections 3.02, 3.04 and 3.05 of the Pooling and
Servicing Agreement are true and correct.
(b) Organization and Good Standing. CFC has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at
all relevant times, and now has, power, authority and legal right to
acquire, own and sell the Initial and Additional Loans and the Initial
Other Conveyed Property transferred to CFSC.
(c) Due Qualification. CFC is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification.
(d) Power and Authority. CFC has the power and authority to
execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; CFC has full power
and authority to sell and assign the Initial and Additional Loans and
the Initial Other Conveyed Property to be sold and assigned to and
deposited with CFSC hereunder and has duly authorized such sale and
assignment to CFSC by all necessary corporate action; and the
execution, delivery and performance of this Agreement and CFC's Related
Documents have been duly authorized by CFC by all necessary corporate
action.
(e) Valid Sale; Binding Obligations. This Agreement and CFC's
Related Documents have been duly executed and delivered, shall effect a
valid sale, transfer and assignment of the Initial and Additional Loans
and the Initial Other Conveyed Property, enforceable against CFC and
creditors of and purchasers from CFC; and this Agreement and CFC's
Related Documents constitute legal, valid and binding obligations of
CFC enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents
shall not conflict with, result in any breach of any of the
-6-
<PAGE>
terms and provisions of or constitute (with or without notice, lapse
of time or both) a default under, the articles of incorporation or
bylaws of CFC, or any indenture, agreement, mortgage, deed of trust or
other instrument to which CFC is a party or by which it is bound, or
result in the creation or imposition of any Lien, upon any of its
properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, other than this Agreement
and the Pooling and Servicing Agreement, or violate any law, order,
rule or regulation applicable to CFC of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over CFC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to CFC's knowledge, threatened against CFC, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over CFC or its
properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by CFC of its obligations under, or the validity
or enforceability of, this Agreement or any of the Related Documents or
(iv) seeking to affect adversely the federal income tax or other
federal, state or local tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Initial and Additional Loans and the Initial Other
Conveyed Property hereunder or under the Pooling and Servicing
Agreement.
(h) Chief Executive Office. The chief executive office of CFC
is located at 1100 Landmark Towers, 345 St. Peter Street, Saint Paul,
MN 55102-1639.
(i) Licensing. CFC is duly licensed in each state in which
Loans were originated to the extent CFC is required to be licensed by
applicable law in connection with the origination and servicing of the
Loans.
SECTION 3.2. Representations and Warranties of CFSC. CFSC makes the
following representations and warranties, on which CFC relies in selling,
assigning, transferring and conveying the Initial and Additional Loans and the
Initial Other Conveyed Property to CFSC hereunder. Such representations are made
as of the execution and delivery of this Agreement, but shall survive the sale,
transfer and assignment of the Initial and Additional Loans and the Initial
Other Conveyed Property hereunder and the sale, transfer and assignment thereof
by CFSC to the Trust under the Pooling and Servicing Agreement.
(a) Organization and Good Standing. CFSC has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Minnesota, with the power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted, and had
-7-
<PAGE>
at all relevant times, and has, full power, authority and legal right
to acquire and own the Initial and Additional Loans and the Initial
Other Conveyed Property and to transfer the Initial and Additional
Loans and the Initial Other Conveyed Property to the Trust pursuant to
the Sale and Servicing Agreement.
(b) Due Qualification. CFSC is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure
to do so would materially and adversely affect (i) CFSC's ability to
acquire the Initial and Additional Loans or the Initial Other Conveyed
Property, (ii) the validity or enforceability of the Initial and
Additional Loans and the Initial Other Conveyed Property or (iii)
CFSC's ability to perform its obligations hereunder and under the
Related Documents.
(c) Power and Authority. CFSC has the power, authority and
legal right to execute and deliver this Agreement and its Related
Documents and to carry out the terms hereof and thereof and to acquire
the Initial and Additional Loans and the Initial Other Conveyed
Property hereunder; and the execution, delivery and performance of this
Agreement and its Related Documents and all of the documents required
pursuant hereto or thereto have been duly authorized by CFSC by all
necessary action.
(d) No Consent Required. CFSC is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery
or performance of this Agreement and the Related Documents, except for
such as have been obtained, effected or made.
(e) Binding Obligation. This Agreement and each of its Related
Documents constitutes a legal, valid and binding obligation of CFSC,
enforceable against CFSC in accordance with its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and
to general equitable principles.
(f) No Violation. The execution, delivery and performance by
CFSC of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do
not and will not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice or lapse
of time) a default under the certificate of incorporation or bylaws of
CFSC, or conflict with or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under,
any indenture, agreement, mortgage, deed of trust or other instrument
to which CFSC is a party or by which CFSC is bound or to which any of
its properties are subject, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument
(other than the
-8-
<PAGE>
Pooling and Servicing Agreement and the Indenture), or violate any law,
order, rule or regulation, applicable to CFSC or its properties, of any
federal or state regulatory body or any court, administrative agency,
or other governmental instrumentality having jurisdiction over CFSC or
any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement or any of
the Related Documents, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any of the
Related Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by CFSC of its
obligations under, or the validity or enforceability of, this Agreement
or any of the Related Documents or (iv) that may adversely affect the
federal or state income tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Initial and Additional Loans and the Initial Other
Conveyed Property hereunder or the transfer of the Initial and
Additional Loans and the Initial Other Conveyed Property to the Trust
pursuant to the Pooling and Servicing Agreement.
In the event of any breach of a representation and warranty made by CFSC
hereunder, CFC covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the later of (i) the date on which all
pass-through certificates or other similar securities issued by the Trust, or a
trust or similar vehicle formed by CFSC, have been paid in full, or (ii) all
Certificates or other similar securities issued by the Trust, or a trust or
similar vehicle formed by CFSC, have been paid in full. CFC and CFSC agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by CFSC or by the Trustee on behalf of the Trust.
ARTICLE IV
COVENANTS OF CFC
SECTION 4.1 Transfer of Loans.
(a) On or prior to the Closing Date, or the Subsequent
Transfer Date in the case of Subsequent Loans, CFC shall deliver the
Loan Files to CFSC. CFC has filed a form UCC-1 financing statement
regarding the sale of the Loans to CFSC, and shall file continuation
statements in respect of such UCC-1 financing statement as if such
financing statement were necessary to perfect such sale. CFC shall take
any other actions necessary to maintain the perfection of the sale of
the Loans to CFSC.
-9-
<PAGE>
(b) If at any time during the term of this Agreement CFC does
not have a long-term senior debt rating of A- or higher from S&P,
Moody's (if rated by Moody's) and Duff & Phelps (if rated by Duff &
Phelps), (i) CFC shall within 30 days execute and deliver to CFSC (if
it has not previously done so) endorsements of each Loan and
assignments in recordable form of each mortgage, deed of trust or
security deed securing a Loan, and (ii) CFSC, at CFC's expense, shall
within 60 days file in the appropriate recording offices the
assignments to CFSC of each mortgage, deed of trust or security deed
securing a Loan; provided, however, that such execution and filing of
the assignments with respect to the Loans shall not be required if CFSC
receives written confirmation from each of S&P, Moody's and Duff &
Phelps that the ratings of the Certificates would not be reduced or
withdrawn by the failure to execute and file such assignments;
provided, however, that such execution and filing shall not be required
if CFC delivers an Opinion of Counsel to the effect that such
assignment and recordation is not necessary to effect the assignment to
CFSC of CFC's lien on the real property securing each Loan.
(c) If, as of the Post-Funding Payment Date, the aggregate
Scheduled Principal Balance of Loans secured by real property located
in Maryland ("Maryland Loans") exceeds 10% of the Pool Scheduled
Principal Balance, CFC shall, within sixty (60) days, submit to the
appropriate recording offices the assignments to CFSC on behalf of the
Trust of the number of mortgages, deeds of trust or security deeds
required to reduce to less than 10% of the Pool Scheduled Principal
Balance the aggregate Scheduled Principal Balance of Maryland Loans as
to which such assignments are not recorded.
SECTION 4.2. Costs and Expenses. CFC shall pay all reasonable costs and
disbursements in connection with the performance of its obligations hereunder
and under each Subsequent Transfer Agreement and its Related Documents.
SECTION 4.3. Indemnification.
(a) CFC will defend and indemnify CFSC against any and all
costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation
arising out of or resulting from the use or ownership of any real
estate related to a Loan by CFC or the Servicer or any Affiliate of
either. Notwithstanding any other provision of this Agreement, the
obligation of CFC under this Section shall not terminate upon a Service
Transfer pursuant to Article VII of the Pooling and Servicing
Agreement, except that the obligation of CFC under this Section 4.3
shall not relate to the actions of any subsequent Servicer after a
Service Transfer.
(b) No obligation or liability to any Obligor under any of the
Loans is intended to be assumed by CFSC 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, CFSC
expressly disclaims such assumption.
-10-
<PAGE>
(c) CFC agrees to pay, and to indemnify, defend and hold
harmless CFSC from, any taxes which may at any time be asserted with
respect to, and as of the date of, the transfer of the Loans to CFSC,
including, without limitation, any sales, gross receipts, general
corporation, personal property, privilege or license taxes and costs,
expenses and reasonable counsel fees in defending against the same,
whether arising by reason of the acts to be performed by CFC under this
Agreement or imposed against CFSC.
(d) Indemnification under this Section 4.3 shall include,
without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Originator has made any indemnity
payments to CFSC pursuant to this Section 4.3 and CFSC thereafter
collects any of such amounts from others, CFSC will repay such amounts
collected to CFC, without interest.
ARTICLE V
REPURCHASES
SECTION 5.1. Repurchase of Loans Upon Breach of Warranty.
(a) Upon the occurrence of a Repurchase Event CFC shall,
unless such breach shall have been cured in all material respects,
repurchase such Loan from the Trust pursuant to Section 3.06 of the
Pooling and Servicing Agreement, subject to the limitation of Section
3.07 of the Pooling and Servicing Agreement. It is understood and
agreed that, the obligation of CFC to repurchase any Loan as to which a
breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against CFC for such breach
available to CFSC, the Certificateholders or the Trustee on behalf of
Certificateholders. The provisions of this Section 5.1 are intended to
grant the Trustee a direct right against CFC to demand performance
hereunder, and in connection therewith, CFC waives any requirement of
prior demand against CFSC with respect to such repurchase obligation.
Any such purchase shall take place in the manner specified in Section
3.06 of the Pooling and Servicing Agreement. Notwithstanding any other
provision of this Agreement, any Subsequent Transfer Agreement or the
Pooling and Servicing Agreement or any Subsequent Transfer Agreement to
the contrary, the obligation of CFC under this Section shall not
terminate upon a termination of CFC as Servicer under the Pooling and
Servicing Agreement and shall be performed in accordance with the terms
hereof notwithstanding the failure of the Servicer or CFSC to perform
any of their respective obligations with respect to such Loan under the
Pooling and Servicing Agreement.
(b) In lieu of repurchasing a Loan when required by Section
5.1(a) of this Agreement and Section 3.06(a) of the Pooling and
Servicing Agreement, CFC may deliver an Eligible Substitute Loan
pursuant to the provisions of Section 3.06(b) of the Pooling and
Servicing Agreement.
(c) In addition to the foregoing and notwithstanding whether
the related Loan shall have been purchased by CFC, CFC shall indemnify
the Trustee, the Trust and the Certificateholders against all costs,
expenses, losses, damages, claims and liabilities, including
-11-
<PAGE>
reasonable fees and expenses of counsel, which may be asserted against
or incurred by any of them as a result of third party claims arising
out of the events or facts giving rise to such Repurchase Events.
SECTION 5.2. Reassignment of Purchased Loans. Upon deposit of the
Repurchase Price of any Loan repurchased or replaced by CFC under Section 5.1,
CFSC shall cause the Trustee to take such steps as may be reasonably requested
by CFC in order to assign to CFC all of CFSC's and the Trust's right, title and
interest in and to such Loan and all security and documents and all Other
Conveyed Property conveyed to CFSC and the Trust directly relating thereto,
without recourse, representation or warranty, except as to the absence of liens,
charges or encumbrances created by or arising as a result of actions of CFSC or
the Trustee. Such assignment shall be a sale and assignment outright, and not
for security. If, following the reassignment of a Loan, in any enforcement suit
or legal proceeding, it is held that CFC may not enforce any such Loan on the
ground that it shall not be a real party in interest or a holder entitled to
enforce the Loan, CFSC and the Trustee shall, at the expense of CFC, take such
steps as CFC deems reasonably necessary to enforce the Loan, including bringing
suit in CFSC's or the Trustee's name.
SECTION 5.3. Waivers. No failure or delay on the part of CFSC, or the
Trustee as assignee of CFSC, in exercising any power, right or remedy under this
Agreement or under any Subsequent Transfer Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or future exercise thereof or the exercise of any
other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Liability of CFC. CFC shall be liable in accordance
herewith only to the extent of the obligations in this Agreement or in any
Subsequent Transfer Agreement specifically undertaken by CFC and the
representations and warranties of CFC.
SECTION 6.2. Merger or Consolidation of CFC or CFSC. Any corporation or
other entity (i) into which CFC or CFSC may be merged or consolidated, (ii)
resulting from any merger or consolidation to which CFC or CFSC is a party or
(iii) succeeding to the business of CFC or CFSC, in the case of CFSC, which
corporation has a certificate of incorporation containing provisions relating to
limitations on business and other matters substantively identical to those
contained in CFSC's certificate of incorporation, provided that in any of the
foregoing cases such corporation shall execute an agreement of assumption to
perform every obligation of CFC or CFSC, as the case may be, under this
Agreement and each Subsequent Transfer Agreement and, whether or not such
assumption agreement is executed, shall be the successor to CFC or CFSC, as the
case may be, hereunder and under each such Subsequent Transfer Agreement
(without relieving CFC or CFSC of its responsibilities hereunder, if it survives
such merger or consolidation) without the execution or filing of any document or
any further act by
-12-
<PAGE>
any of the parties to this Agreement or each Subsequent Transfer Agreement. CFC
or CFSC shall promptly inform the other party and the Trustee of such merger,
consolidation or purchase and assumption. Notwithstanding the foregoing, as a
condition to the consummation of the transactions referred to in clauses (i),
(ii) and (iii) above, (x) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Sections 3.1 and 3.2 and the
Pooling and Servicing Agreement, or similar representation or warranty made in
any Subsequent Transfer Agreement, shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction), (y) CFC or CFSC, as applicable, shall have
delivered written notice of such consolidation, merger or purchase and
assumption to the Rating Agencies prior to the consummation of such transaction
and shall have delivered to the Trustee an Officer's Certificate and an Opinion
of Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section 6.3 and that all conditions
precedent, if any, provided for in this Agreement, or in each Subsequent
Transfer Agreement, relating to such transaction have been complied with, and
(z) CFC or CFSC, as applicable, shall have delivered to the Trustee an Opinion
of Counsel, stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Trustee in the Trust Property and reciting the details of the filings or
(B) no such action shall be necessary to preserve and protect such interest.
SECTION 6.3. Limitation on Liability of CFC and Others. CFC shall not
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its obligations under this Agreement, any Subsequent
Transfer Agreement or its Related Documents and that in its opinion may involve
it in any expense or liability.
SECTION 6.4. Amendment.
(a) This Agreement and any Subsequent Transfer Agreement may
be amended by CFC and CFSC and without the consent of the Trustee or
any of the Certificateholders (A) to cure any ambiguity or (B) to
correct any provisions in this Agreement or any such Subsequent
Transfer Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee, adversely
affect in any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by
CFC and CFSC, with the prior written consent of the Trustee and the
Holders of Certificates 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 the Certificateholders; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Loans
or, distributions that are required to be made on any Certificate or
(ii) reduce the aforesaid percentage required to consent
-13-
<PAGE>
to any such amendment or any waiver hereunder, without the consent of
the Holders of all Certificates then outstanding.
(c) This Agreement shall not be amended under this Section
without the consent of 100% of the Certificateholders and the Class C
Certificateholder if such amendment would result in the
disqualification of the Trust as a REMIC under the Code.
(d) Concurrently with the solicitation of any consent pursuant
to this Section 6.4, CFSC shall furnish written notification to S&P,
Moody's and Duff & Phelps. Promptly after the execution of any
amendment or consent pursuant to this Section 6.4, CFSC shall furnish
written notification of the substance of such amendment to S&P, Moody's
and Duff & Phelps, each Certificateholder and the Class P and Class C
Certificateholder.
(e) It shall not be necessary for the consent of
Certificateholders pursuant to this Section 6.4 to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization
of the execution thereof by Certificateholders shall be subject to such
reasonable requirements as the Trustee may prescribe, including the
establishment of record dates. The consent of any Holder of a
Certificate given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such
Holder and on all future Holders of such Certificate and of any
Certificate issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon
the Certificate.
SECTION 6.5. Notices. All demands, notices and communications to CFC or
CFSC hereunder shall be in writing, personally delivered, or sent by telecopier
(subsequently confirmed in writing), reputable overnight courier or mailed by
certified mail, return receipt requested, and shall be deemed to have been given
upon receipt (a) in the case of CFC, to Conseco Finance Corp., 1100 Landmark
Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639, Attention: Chief
Financial Officer, or such other address as shall be designated by CFC in a
written notice delivered to the other party or to the Trustee or (b) in case of
CFSC, to Conseco Finance Securitizations Corp., 300 Landmark Towers, 345 St.
Peter Street, Saint Paul, Minnesota 55102-1639, Attention: Chief Financial
Officer.
SECTION 6.6. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Related Documents set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.7. Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants,
-14-
<PAGE>
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
SECTION 6.8. Intention of the Parties. The execution and delivery of
this Agreement and of each Subsequent Transfer Agreement shall constitute an
acknowledgment by CFC and CFSC that they intend that each assignment and
transfer herein and therein contemplated constitute a sale and assignment
outright, and not for security, of the Initial and Additional Loans and the
Initial Other Conveyed Property and the Subsequent Loans and Subsequent Other
Conveyed Property, as the case may be, conveying good title thereto free and
clear of any liens, from CFC to CFSC, and that the Initial and Additional Loans
and the Initial Other Conveyed Property and the Subsequent Loans and Subsequent
Other Conveyed Property shall not be a part of CFC's estate in the event of the
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of, or with respect to, CFC. In the event
that such conveyance is determined to be made as security for a loan made by
CFSC, the Trust or the Certificateholders to CFC, the parties intend that CFC
shall have granted to CFSC a security interest in all of CFC's right, title and
interest in and to the Initial and Additional Loans and the Initial Other
Conveyed Property and the Subsequent Loans and Subsequent Other Conveyed
Property, as the case may be, conveyed pursuant to Section 2.1 hereof or
pursuant to any Subsequent Transfer Agreement, and that this Agreement and each
Subsequent Transfer Agreement shall constitute a security agreement under
applicable law.
SECTION 6.9. Governing Law. This Agreement shall be construed in
accordance with, the laws of the State of Minnesota without regard to the
principles of conflicts of laws thereof, and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.
SECTION 6.10. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
SECTION 6.11. Conveyance of the Initial and Additional Loans and the
Initial Other Conveyed Property to the Trust. CFC acknowledges that CFSC
intends, pursuant to the Pooling and Servicing Agreement, to convey the Initial
and Additional Loans and the Initial Other Conveyed Property, together with its
rights under this Agreement, to the Trust on the date hereof. CFC acknowledges
and consents to such conveyance and waives any further notice thereof and
covenants and agrees that the representations and warranties of CFC contained in
this Agreement and the rights of CFSC hereunder are intended to benefit the
Trustee, the Trust, and the Certificateholders. In furtherance of the foregoing,
CFC covenants and agrees to perform its duties and obligations hereunder, in
accordance with the terms hereof for the benefit of the Trustee, the Trust, and
the Certificateholders and that, notwithstanding anything to the contrary in
this Agreement, CFC shall be directly liable to the Trustee and the Trust
(notwithstanding any
-15-
<PAGE>
failure by the Servicer or CFSC to perform its duties and obligations hereunder
or under the Pooling and Servicing Agreement) and that the Trustee may enforce
the duties and obligations of CFC under this Agreement against CFC for the
benefit of the Trust and the Certificateholders.
SECTION 6.12. Nonpetition Covenant. Neither CFSC nor CFC shall petition
or otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Trust (or, in the case of
CFC, against CFSC) under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust (or CFSC) or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Trust (or CFSC).
-16-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Transfer Agreement to
be duly executed by their respective officers this 27th day of March, 2000.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By /s/Phyllis A. Knight
------------------------------------------
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
CONSECO FINANCE CORP., as Seller
By /s/Phyllis A. Knight
------------------------------------------
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
-17-
<PAGE>
SCHEDULE A
SCHEDULE OF INITIAL AND ADDITIONAL LOANS
[Included as Exhibit L to Pooling and Servicing Agreement]
A-1
<PAGE>
EXHIBIT A
FORM OF
SUBSEQUENT TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
CONSECO FINANCE CORP.
Seller
dated as of
________, 2000
<PAGE>
SUBSEQUENT TRANSFER AGREEMENT, dated as of ________, 2000, between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Conseco Finance Corp., a Delaware corporation, as seller ("CFC"),
pursuant to the Transfer Agreement, dated as of March 1, 2000, between CFSC and
CFC.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, CFC and CFSC are parties to a Transfer Agreement, dated as of
March 1, 2000 (as amended or supplemented, the "Transfer Agreement");
WHEREAS, pursuant to the Transfer Agreement and this Agreement, CFSC
has agreed to purchase from CFC and CFC is transferring to CFSC the Subsequent
Loans and the Subsequent Other Conveyed Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, CFSC and CFC, intending to be legally
bound, hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to such terms in the Transfer
Agreement.
"Agreement" means this Subsequent Transfer Agreement and all amendments
hereof and all supplements hereto.
"Schedule of Subsequent Loans" means the schedule of all home equity
loans sold and transferred pursuant to this Agreement attached hereto as
Schedule A, which Schedule of Subsequent Loans shall supplement the Schedule of
Initial and Additional Loans attached to the Transfer Agreement.
"Subsequent Cutoff Date" shall mean, with respect to the Subsequent
Loans conveyed hereby, _________, 2000.
"Subsequent Other Conveyed Property" means, for the purposes of this
Agreement, all monies at any time paid or payable on the Subsequent Loans
conveyed hereby or in respect thereof after the Subsequent Cut-off Date
(including amounts due on or before the Subsequent Cut-off Date but received by
CFC after the Subsequent Cut-off Date), an assignment of security interests in
the related real estate and any and all other documents or electronic records
that CFC keeps on file in accordance with its customary procedures relating to
the Subsequent Loans, the Obligors or the related real estate, property
(including the right to receive future Liquidation Proceeds) that secures a
Subsequent Loan and that has been acquired by or on behalf of the Trust pursuant
to liquidation of such Subsequent Loan, and all proceeds of the foregoing.
Ex. A-1
<PAGE>
"Subsequent Loans" means, for purposes of this Agreement, the Loans
listed in the Schedule of Subsequent Loans.
2. Conveyance of the Subsequent Loans and the Subsequent Other Conveyed
Property. Subject to the terms and conditions of this Agreement and the Transfer
Agreement, CFC hereby sells, transfers, assigns, and otherwise conveys to CFSC
without recourse (but without limitation of its obligations in this Agreement
and the Transfer Agreement), and CFSC hereby purchases, all right, title and
interest of CFC in and to the Subsequent Loans and the Subsequent Other Conveyed
Property. It is the intention of CFC and CFSC that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Subsequent Loans
and the Subsequent Other Conveyed Property from CFC to CFSC, conveying good
title thereto free and clear of any Liens, and the Subsequent Loans and the
Subsequent Other Conveyed Property shall not be part of CFC's estate in the
event of the filing of a bankruptcy petition by or against CFC under any
bankruptcy or similar law.
3. Purchase Price. Simultaneously with the conveyance of the Subsequent
Loans and the Subsequent Other Conveyed Property to CFSC, CFSC has paid or
caused to be paid to or upon the order of CFC, by wire transfer of immediately
available funds (representing certain proceeds to CFSC from the sale of the
Certificates on deposit in the Pre-Funding Account), the amount of funds as
specified below:
(i) Principal Balance of Subsequent Loans: $_______
(ii) Proceeds to CFC: $_______
4. Representations and Warranties of CFC. CFC makes the following
representations and warranties, on which CFSC relies in purchasing the
Subsequent Loans and the Subsequent Other Conveyed Property and in transferring
the Subsequent Loans and the Subsequent Other Conveyed Property to the Trust
under the Subsequent Transfer Agreement. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Subsequent Loans and the Subsequent Other Conveyed
Property hereunder, and the sale, transfer and assignment thereof by CFSC to the
Trust under the Subsequent Transfer Agreement. CFC and CFSC agree that CFSC will
assign to the Trust all of CFSC's rights under the Agreement, and that the Trust
will thereafter be entitled to enforce this Agreement against CFC in the Trust's
own name.
(a) Schedule of Representations. The representations and
warranties set forth in Sections 3.02, 3.03 and 3.04 of the Pooling and
Servicing Agreement are true and correct.
(b) Organization and Good Standing. CFC has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such
Ex. A-2
<PAGE>
properties are currently owned and such business is currently
conducted, and had at all relevant times, and now has, power, authority
and legal right to acquire, own and sell the Subsequent Loans and the
Subsequent Other Conveyed Property transferred to CFSC.
(c) Due Qualification. CFC is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification.
(d) Power and Authority. CFC has the power and authority to
execute and deliver this Agreement and the Subsequent Transfer
Agreement and to carry out its terms and their terms, respectively; CFC
has full power and authority to sell and assign the Subsequent Loans
and the Subsequent Other Conveyed Property to be sold and assigned to
and deposited with CFSC hereunder and has duly authorized such sale and
assignment to CFSC by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the
Subsequent Transfer Agreement have been duly authorized by CFC by all
necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and the
Subsequent Transfer Agreement have been duly executed and delivered,
shall effect a valid sale, transfer and assignment of the Subsequent
Loans and the Subsequent Other Conveyed Property, enforceable against
CFC and creditors of and purchasers from CFC; and this Agreement
constitutes the legal, valid and binding obligation of CFC enforceable
in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the Subsequent Transfer Agreement
and the fulfillment of the terms of this Agreement and the Subsequent
Transfer Agreement shall not conflict with, result in any breach of any
of the terms and provisions of or constitute (with or without notice,
lapse of time or both) a default under, the certificate of
incorporation or bylaws of CFC, or any indenture, agreement, mortgage,
deed of trust or other instrument to which CFC is a party or by which
it is bound, or result in the creation or imposition of any lien upon
any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement and the Subsequent Transfer Agreement, or violate any law,
order, rule or regulation applicable to CFC of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over CFC or any of its
properties.
Ex. A-3
<PAGE>
(g) No Proceedings. There are no proceedings or investigations
pending or, to CFC's knowledge, threatened against CFC, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over CFC or its
properties (i) asserting the invalidity of this Agreement or the
Subsequent Transfer Agreement, (ii) seeking to prevent or the
consummation of any of the transactions contemplated by this Agreement
or the Subsequent Transfer Agreement, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by
CFC of its obligations under, or the validity or enforceability of,
this Agreement or the Subsequent Transfer Agreement, or (iv) seeking to
affect adversely the federal income tax or other federal, state or
local tax attributes of, or seeking to impose any excise, franchise,
transfer or similar tax upon, the transfer and acquisition of the
Subsequent Loans and the Subsequent Other Conveyed Property hereunder
or under the Subsequent Transfer Agreement.
(h) Insolvency. As of the Subsequent Cut-off Date and the
Subsequent Transfer Date, neither CFC nor CFSC is insolvent nor will
either of them have been made insolvent after giving effect to the
conveyance set forth in Section 2 of this Agreement, nor are any of
them aware of any pending insolvency.
(i) Chief Executive Office. The chief executive office of CFC
is located at 1100 Landmark Towers, 345 St. Peter Street, Saint Paul,
Minnesota 55102-1639.
(j) Licensing. CFC is duly licensed in each state in which
Loans were originated to the extent CFC is required to be licensed by
applicable law in connection with the origination and servicing of the
Loans.
5. Representations and Warranties of CFSC. CFSC makes the following
representations and warranties, on which CFC relies in selling, assigning,
transferring and conveying the Subsequent Loans and the Subsequent Other
Conveyed Property to CFSC hereunder. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Subsequent Loans and the Subsequent Other Conveyed
Property hereunder and the sale, transfer and assignment thereof by CFSC to the
Trust under the Subsequent Transfer Instrument.
(a) Organization and Good Standing. CFSC has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Minnesota, with the power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted, and had
at all relevant times, and has, full power, authority and legal right
to acquire and own the Subsequent Loans and the Subsequent Other
Conveyed Property, and to transfer the Subsequent Loans and the
Subsequent Other Conveyed Property to the Trust pursuant to the
Subsequent Transfer Instrument.
Ex. A-4
<PAGE>
(b) Due Qualification. CFSC is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure
to do so would materially and adversely affect CFSC's ability to
acquire the Subsequent Loans or the Subsequent Other Conveyed Property
or the validity or enforceability of the Subsequent Loans and the
Subsequent Other Conveyed Property or to perform CFSC's obligations
hereunder and under the Subsequent Transfer Instrument.
(c) Power and Authority. CFSC has the power, authority and
legal right to execute and deliver this Agreement and to carry out the
terms hereof and to acquire the Subsequent Loans and the Subsequent
Other Conveyed Property hereunder; and the execution, delivery and
performance of this Agreement and all of the documents required
pursuant hereto have been duly authorized by CFSC by all necessary
action.
(d) No Consent Required. CFSC is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery
or performance of this Agreement and the Subsequent Transfer Agreement,
except for such as have been obtained, effected or made.
(e) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of CFSC, enforceable against CFSC in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(f) No Violation. The execution, delivery and performance by
CFSC of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Subsequent Transfer Instrument
and the fulfillment of the terms of this Agreement and the Subsequent
Transfer Instrument do not and will not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the articles of
incorporation or bylaws of CFSC, or conflict with or breach any of the
terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, mortgage, deed of
trust or other instrument to which CFSC is a party or by which CFSC is
bound or to which any of its properties are subject, or result in the
creation or imposition of any lien upon any of its properties pursuant
to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument (other than the Pooling and Servicing Agreement and
the Subsequent Transfer Instrument), or violate any law, order, rule or
regulation, applicable to CFSC or its properties, of any federal or
state regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over CFSC or any of
its properties.
Ex. A-5
<PAGE>
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement or the
Subsequent Transfer Instrument, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement
or the Subsequent Transfer Instrument, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by
CFSC of its obligations under, or the validity or enforceability of,
this Agreement or the Subsequent Transfer Instrument, or (iv) that may
adversely affect the federal or state income tax attributes of, or
seeking to impose any excise, franchise, transfer or similar tax upon,
the transfer and acquisition of the Subsequent Loans and the Subsequent
Other Conveyed Property hereunder or the transfer of the Subsequent
Loans and the Subsequent Other Conveyed Property to the Trust pursuant
to the Subsequent Transfer Instrument.
In the event of any breach of a representation and warranty made by CFSC
hereunder, CFC covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the date on which all pass-through certificates
or other similar securities issued by the Trust, or a trust or similar vehicle
formed by CFSC, have been paid in full. CFC and CFSC agree that damages will not
be an adequate remedy for such breach and that this covenant may be specifically
enforced by CFSC or by the Trustee on behalf of the Trust.
6. Conditions Precedent. The obligation of CFSC to acquire the
Subsequent Loans and the Subsequent Other Conveyed Property hereunder is subject
to the satisfaction, on or prior to the Subsequent Transfer Date, of the
following conditions precedent, and CFC hereby confirms that such conditions
precedent are satisfied;
(a) Representations and Warranties. Each of the
representations and warranties made by the CFC in Section 4 of this
Agreement and in Section 3.1 of the Transfer Agreement shall be true
and correct as of the date of this Agreement and as of the Subsequent
Transfer Date.
(b) Transfer Agreement Conditions. Each of the conditions set
forth in Section 2.3(b) of the Transfer Agreement applicable to the
conveyance of Subsequent Loans and the Subsequent Other Conveyed
Property shall have been satisfied.
(c) Additional Information. CFC has have delivered to CFSC
such information as was reasonably requested by CFSC to satisfy itself
as to (i) the accuracy of the representations and warranties set forth
in Section 4 of this Agreement and in Section 3.1 of the Transfer
Agreement and (ii) the satisfaction of the conditions set forth in this
Section 6.
Ex. A-6
<PAGE>
7. Ratification of Transfer Agreement. As supplemented by this
Agreement, the Transfer Agreement is in all respects ratified and confirmed and
the Transfer Agreement as so supplemented by this Agreement shall be read, taken
and construed as one and the same instrument.
8. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Minnesota without regard to the principles of conflicts
of laws thereof, and the obligations, rights and remedies of the parties under
this Agreement shall be determined in accordance with such laws.
9. Counterparts. For the purposes of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
10. Conveyance of the Subsequent Loans and the Subsequent Other
Conveyed Property to the Trust. CFC acknowledges that CFSC intends, pursuant to
a Subsequent Transfer Instrument, to convey the Subsequent Loans and the
Subsequent Other Conveyed Property, together with its rights under this
Agreement and under the Transfer Agreement, to the Trust on the date hereof. CFC
acknowledges and consents to such conveyance and waives any further notice
thereof and covenants and agrees that the representations and warranties of CFC
contained in this Agreement and the rights of CFSC hereunder and thereunder are
intended to benefit the Trustee, the Trust and the Certificateholders. In
furtherance of the foregoing, CFC covenants and agrees to perform its duties and
obligations hereunder and under the Transfer Agreement, in accordance with the
terms hereof and thereof for the benefit of the Trustee, the Trust and the
Certificateholders and that, notwithstanding anything to the contrary in this
Agreement or in the Transfer Agreement, CFC shall be directly liable to the
Trustee and the Trust (notwithstanding any failure by CFSC to perform its duties
and obligations hereunder or under the Pooling and Servicing Agreement or the
Subsequent Transfer Agreement) and that the Trustee may enforce the duties and
obligations of CFC under this Agreement and the Transfer Agreement against CFC
for the benefit of the Trust and the Certificateholders.
Ex. A-7
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By _______________________________
[Name]
[Title]
CONSECO FINANCE CORP., as Seller
By _______________________________
[Name]
[Title]
Ex. A-8
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT
------------------
In accordance with the Transfer Agreement (the "Agreement") dated as of
March 1, 2000, between the undersigned and Conseco Finance Securitizations
Corp., the undersigned does hereby transfer, convey and assign, set over and
otherwise convey, without recourse, to Conseco Finance Home Equity Loan Trust
2000-B, 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 Corp. may have
against the originating lender with respect to Initial and Additional Loans
originated by a lender other than Conseco Finance 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) amounts in the Certificate Account, the
Capitalized Interest Account and the Pre-Funding Account (including all proceeds
of investments of the funds in Certificate Account) and (ix) 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 ______________, 2000.
CONSECO FINANCE CORP.
[Seal] By:
-----------------------------------
[Name]
[Title]
Ex. B-1
<PAGE>
DORSEY & WHITNEY, LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, MN 5540-1498
Telephone: (612) 340-2600
Fax: (612) 340-8738
EXHIBIT 5.1
-----------
Conseco Finance Corp.
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Registration Statement on Form S-3
Conseco Finance Home Equity Loan Trust 2000-B
File No. 333-85119 and 333-85119-01
Ladies and Gentlemen:
We have acted as counsel to Conseco Finance Corp., a Delaware
corporation (the "Company") and Conseco Finance Securitizations Corp., a
Minnesota corporation (the "Seller") in connection with the registration under
the Securities Act of 1933, as amended, of $5,000,000,000 of Asset-Backed
Securities (the "Securities") to be issued by Certificates for Home Improvement
and Home Equity Loans from time to time, the related preparation and filing of
the Registration Statements on Form S-3 filed by the Company with the Securities
and Exchange Commission (the "Commission") (File Nos. 333-85119 and 333-85119-
01) (together, the "Registration Statement"), and the preparation of a
Prospectus Supplement dated March 1, 2000, and the related Prospectus dated
March 1, 2000 (together, the "Prospectus") relating to the offer and sale by the
Company of $985,000,000 (approximate) aggregate principal amount of Loan-Backed
Certificates (the "Certificates") to be issued by Conseco Finance Home Loan
Trust 2000-B (the "Trust"). The corpus of the Trust will consist of the Loans,
the related Collateral Security and certain other property. The Trust was
established pursuant to a Pooling and Servicing
<PAGE>
Conseco Finance Corp.
Conseco Finance Securitizations Corp.
March 27, 2000
Page 2
Agreement dated as of March 1, 2000, among the Company, as Originator, Servicer
and Guarantor, and U.S. Bank Trust National Association, as Trustee (the "PSA").
The Certificates are to be issued pursuant to the PSA. The Securities are
described in the Prospectus forming part of the Registration Statement.
The Company will provide a Limited Guaranty (the "Limited Guaranty")
with respect to the BF-2 Certificates.
We have examined the Registration Statement, the Prospectus, the PSA,
and such other related documents, and have reviewed such questions of law, as we
have considered necessary and appropriate for the purposes of this opinion.
Based on the foregoing, we are of the opinion that:
1. The PSA has been duly authorized by the Board of Directors of the
Company and duly executed and delivered by the Company and constitute valid and
binding obligations of the Company, and the Limited Guaranty of the Company
provided for in the PSA constitutes the valid and binding obligation of the
Company.
2. When the Certificates have been duly executed and delivered in
accordance with the terms of the PSA, they will be legally and validly issued,
and the holders of the Certificates will be entitled to the benefits of the PSA.
3. When the Certificates have been duly executed and delivered by the
Trustee, authenticated by the Trustee, and delivered and paid for pursuant to
the Underwriting Agreement, the Certificates will have been duly issued and will
constitute valid and binding obligations of the Trust.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinion in paragraphs 1 and 3 above are subject to the
effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or other similar law of general application affecting
creditors' rights.
<PAGE>
Conseco Finance Corp.
Conseco Finance Securitizations Corp.
March 27, 2000
Page 3
(b) Our opinion in paragraphs 1 and 3 above are subject to the
effect of general principles of equity, including (without limitation)
concepts of materiality, reasonableness, good faith and fair dealing,
and other similar doctrines affecting the enforceability of agreements
generally (regardless of whether considered in a proceeding in equity
or at law).
(c) Minnesota Statutes ss. 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report
does not have a cause of action upon which it may bring suit under
Minnesota law unless the corporation has filed a Notice of Business
Activities Report and provides that the use of the courts of the State
of Minnesota for all contracts executed and all causes of action that
arose before the end of any period for which a corporation failed to
file a required report is precluded. Insofar as our opinion may relate
to the valid, binding and enforceable character of any agreement under
Minnesota law or in a Minnesota court, we have assumed that any party
seeking to enforce such agreement has at all times been, and will
continue at all times to be, exempt from the requirement of filing a
Notice of Business Activities Report or, if not exempt, has duly filed,
and will continue to duly file, all Notice of Business Activities
Reports.
Our opinions expressed above are limited to the laws of the State of
Minnesota and the Delaware General Corporation Law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising part of the Registration Statement.
Dated: March 27, 2000
Very truly yours,
CFS
/s/ Dorsey & Whitney LLP
<PAGE>
DORSEY & WHITNEY LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
Telephone: (612) 340-2600
Fax: (612) 340-8738
EXHIBIT 8.1
-----------
Conseco Finance Corp.
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Conseco Finance Corp.,
Conseco Finance Securitizations Corp. and
Conseco Finance Home Equity Loan Trust 2000-B
Ladies and Gentlemen:
We have acted as counsel for Conseco Finance Corp., a Delaware
corporation ("Conseco Finance") and Conseco Finance Securitizations Corp., a
Minnesota corporation ("Conseco Securitizations") in connection with the
establishment by Conseco Securitizations of Conseco Finance Home Equity Loan
Trust 2000-B (the "Trust"), pursuant to a Pooling and Servicing Agreement, dated
as of March 1, 2000 (the "PSA"), between Conseco Securitizations and U.S. Bank
Trust National Association as Trustee (the "Trustee"). The Trust will issue
$985,000,000 aggregate principal amount of Loan-Backed Certificates (the
"Certificates") pursuant to the PSA. The issuance of the Certificates is also
described in two registration statements on Form S-3 (File No. 333-85119 and
333-85199-01) (together, the "Registration Statement"), and in the related
Prospectus Supplement dated March 1, 2000 (the "Prospectus Supplement") and
Prospectus dated March 1, 2000 (the "Base Prospectus") (together, the
"Prospectus").
You have requested our opinion with respect to certain federal income
tax consequences of the purchase, ownership and disposition of the Certificates.
For purposes of
<PAGE>
Conseco Finance Corp.
Conseco Finance Securitizations Corp.
March 27, 2000
Page 2
rendering our opinion we have examined the Registration Statement, the
Prospectus and the Pooling and Servicing Agreement.
Our opinion is based upon existing law and currently applicable
Treasury Department regulations, current published administrative positions of
the Internal Revenue Service contained in revenue rulings and revenue
procedures, and judicial decisions, all of which are subject to change, either
prospectively or retroactively, and to possibly differing interpretations. Our
opinion is also based on the representations and warranties set forth in the
Pooling and Servicing Agreement and the assumptions that the Company and the
Trustee will at all times comply with the requirements of the Pooling and
Servicing Agreement, including, without limitation, the requirement that a
proper election to be taxed as a real estate mortgage investment conduit
("REMIC") under the Internal Revenue Code of 1986, as amended (the "Code") is
made in accordance with the Pooling and Servicing Agreement and the Code and
that the Certificates will be issued as described in the Prospectus.
Based upon the foregoing, as of the date hereof it is our opinion that
the Trust created pursuant to the Pooling and Servicing Agreement will qualify
as a REMIC under the Code and under the REMIC Regulations, and that the Class AF
Certificates, Class MF Certificates, Class BF Certificates and Class P
Certificates will evidence ownership of the "regular interests" and the Class C
Certificate will evidence ownership of the single class of "residual
interests"in such a REMIC.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Certain
Federal Income Tax Consequences" in the Prospectus, and we hereby confirm that,
insofar as they constitute statements of law or legal conclusions as to the
likely outcome of material issues under the federal income tax laws, the
discussion under such heading accurately sets forth our advice.
Dated: March 27, 2000
Very truly yours,
/s/ Dorsey & Whitney LLP
CFS
