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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): November 30, 1999
CONSECO FINANCE SECURITIZATIONS CORP.
as originator of Certificates for Home Equity Loans
Series 1999-H
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(Exact name of registrant as specified in its charter)
Minnesota 333-85119-01 41-1807858
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(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639
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(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 293-3400
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 1. Changes in Control of Registrant.
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Not applicable.
ITEM 2. Acquisition or Disposition of Assets.
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Not applicable
ITEM 3. Bankruptcy or Receivership.
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Not applicable
ITEM 4. Changes in Registrant's Certifying Accounting.
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Not applicable
ITEM 5. Other Events.
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On November 30, 1999, the Registrant sold Certificates for Home Equity
Loans, Series 1999-H, evidencing beneficial ownership interests in a
trust consisting of fixed-rate home equity loan contracts and
adjustable rate home equity loan contracts issued by Conseco Finance
Securitizations Corp., as Seller, and Conseco Finance Corp., as
Servicer.
ITEM 6. Resignations of Registrant's Directors.
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Not applicable
ITEM 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
2
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(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
Exhibit No. Description
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4.1 Pooling and Servicing Agreement between Conseco
Finance Securitizations Corp., as Seller, Conseco
Finance Corp., as Originator, Servicer and
Guarantor, and U.S. Bank Trust National
Association, as Trustee, dated as of November 1,
1999, relating to Certificates for Home Equity
Loans, Series 1999-H
4.2 Transfer Agreement between Conseco Finance
Securitizations Corp., as Purchaser, and Conseco
Finance Corp., as Seller, dated as of November 1,
1999.
8.1 Tax opinion of Briggs and Morgan Professional
Association, dated November 30, 1999, relating to
REMIC matters
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONSECO FINANCE
SECURITIZATIONS CORP.
as Seller of Certificates for
Home Equity Loans Series 1999-H
By: /s/ Phyllis A. Knight
------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
3
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INDEX TO EXHIBITS
Exhibit
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Number
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4.1 Pooling and Servicing Agreement between Conseco Finance
Securitizations Corp., as Seller, Conseco Finance
Corp., as Originator, Servicer and Guarantor, and
U.S. Bank Trust National Association, as Trustee,
dated as of November 1, 1999, relating to Certificates for
Home Equity Loans, Series 1999-H
4.2 Transfer Agreement between Conseco Finance Securitizations
Corp., as Purchaser, and Conseco Finance Corp., as Seller,
dated as of November 1, 1999.
8.1 Tax opinion of Briggs and Morgan, Professional
Association, dated November 30, 1999, relating to
REMIC matters
4
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EXHIBIT 4.1
Certificates for Home Equity Loans
Series 1999-H
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
HOME EQUITY LOAN TRUST 1999-H
Dated as of November 1, 1999
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................... 1-1
Section 1.01. General................................................ 1-1
Section 1.02. Specific Terms......................................... 1-1
Section 1.03. Calculation of Interest on the Certificates and
Subsidiary REMIC Regular Interests..................... 1-37
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. Company Option to Substitute for Prepaid Loans......... 2-8
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............................. 3-6
Section 3.05. Representations and Warranties Regarding the
Loan Files............................................. 3-10
Section 3.06. Repurchases of Loans for Breach of
Representations and Warranties......................... 3-10
Section 3.07. No Repurchase Under Certain Circumstances.............. 3-12
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................................... 5-6
Section 5.08. Costs and Expenses..................................... 5-6
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Section 5.09. Maintenance of Insurance............................... 5-7
Section 5.10. Merger or Consolidation of Servicer.................... 5-7
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
Certificateholders..................................... 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
Certificateholders..................................... 7-3
Section 7.05. Effect of Transfer..................................... 7-3
Section 7.06. Transfer of Certificate Account........................ 7-3
ARTICLE VIII PAYMENTS.................................................... 8-1
Section 8.01. Monthly Payments....................................... 8-1
Section 8.02. Advances............................................... 8-2
Section 8.03. Class B-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......... 8-9
Section 8.06. Class C Certificateholder's Purchase Option; Auction
Sale; Additional Principal Distribution Amount......... 8-9
Section 8.07. Capitalized Interest Account........................... 8-12
Section 8.08. Pre-Funding Account.................................... 8-13
Section 8.09. Distributions on the Subsidiary REMIC
Regular Interests...................................... 8-14
ARTICLE IX THE CERTIFICATES AND THE CLASS C CERTIFICATES................. 9-1
Section 9.01. The Certificates and the Class C Certificates.......... 9-1
Section 9.02. Registration of Transfer and Exchange of Certificates
and the Class C Certificates........................... 9-2
Section 9.03. No Charge; Disposition of Void Certificates or Class C
Certificates........................................... 9-5
Section 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or
Class Certificates..................................... 9-6
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Section 9.05. Persons Deemed Owners.................................. 9-6
Section 9.06. Access to List of Certificateholders' and Class C
Certificateholders' Names and Addresses................ 9-6
Section 9.07. Authenticating Agents.................................. 9-7
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............................... 10-2
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
Certificates 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. Green Tree 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
Certificateholders..................................... 12-4
Section 12.06. Calculations........................................... 12-5
Section 12.07. Assignment or Delegation by Company.................... 12-5
Section 12.08. Amendment.............................................. 12-5
Section 12.09. Notices................................................ 12-7
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Section 12.10. Merger and Integration................................. 12-8
Section 12.11. Headings............................................... 12-8
Section 12.12. Governing Law.......................................... 12-8
Exhibit A-1 -- Form of Class AF-[1][2][3][4][5][6] Certificate
Exhibit A-2 -- Form of Class AV-[1][2] Certificate
Exhibit A-3 -- Form of Class A-IO Certificate
Exhibit B-1 -- Form of Class MF-[1][2] Certificate
Exhibit B-2 -- Form of Class MV-[1][2] Certificate
Exhibit C-1 -- Form of Class BF-1 and B-2 Certificate
Exhibit C-2 -- Form of Class BV-1 Certificate
Exhibit D-1 -- Form of Assignment - Conseco Finance Corp.
Exhibit D-2 -- Form of Assignment - Conseco Finance Securitizations Corp.
Exhibit E-1 -- Form of Certificate of Officer - Conseco Finance Corp.
Exhibit E-2 -- Form of Certificate of Officer - Conseco Finance
Securitizations Corp.
Exhibit F -- Form of Opinion of Counsel
Exhibit G -- Form of Trustee's Acknowledgment
Exhibit H -- Form of Certificate of Servicing Officer
Exhibit I -- Form of Class C Certificate [Master] [Subsidiary]
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-1 -- List of Initial and Additional Fixed-Rate Loans
Exhibit L-2 -- List of Initial and Additional Group I Adjustable Rate Loans
Exhibit L-3 -- List of Initial and Additional Group II Adjustable Rate 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) - Conseco
Finance Securitizations Corp.
Exhibit Q -- Form of Class P Certificate
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AGREEMENT, dated as of November 1, 1999, 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 B-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 Home Equity
Loan Trust 1999-H (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 pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in seventeen classes
(each, a "Class"), which, together with the Class C Certificates (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, as provided herein, the Trustee will make an election to treat the
entire segregated pool of assets comprising the Subsidiary REMIC (as defined
herein) and subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes and such segregated pool of
assets will be designated as the "Subsidiary REMIC";
WHEREAS, the Subsidiary REMIC Regular Interests (as defined herein) will be
"regular interests" in the Subsidiary REMIC and the Class C Subsidiary
Certificate (as defined herein) will be the sole class of "residual interests"
in the Subsidiary REMIC for purposes of the REMIC Provisions (as defined herein)
under the federal income tax law;
WHEREAS, a segregated pool of assets consisting of the Subsidiary REMIC
Regular Interests will be designated as the "Master REMIC," and the Trustee will
make a separate REMIC election with respect thereto;
WHEREAS, the Certificates will be "regular interests" in the Master REMIC,
and the Class C Master Certificate (as defined herein) will be the sole class of
"residual interests" in the Master REMIC for purposes of the REMIC Provisions
(as defined herein) under federal income tax law; and
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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 and Class C Certificateholders (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:
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ARTICLE I
DEFINITIONS
SECTION 1.01. General. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article include the plural as well as the singular, the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular article, section or other
subdivision, and Section references refer to Sections of this Agreement.
SECTION 1.02. Specific Terms.
"Additional Loan" means a Loan identified as such on the List of Loans
attached hereto as Exhibit L-1, L-2, and L-3.
"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 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.
"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).
"Adjustable Rate Certificates" means the Class AV, Class MV-1, Class MV-2
and Class BV-1 Certificates.
"Adjustable Rate Certificate Liquidation Losses" means, for any Payment
Date:
(a) on which the Aggregate Liquidation Loss Principal Amount is less than
or equal to the Class B-2 Principal Balance, zero;
(b) on which the Aggregate Liquidation Loss Principal Amount first exceeds
the Class B-2 Principal Balance (the "Cross-over Date"), such excess
times a fraction, the numerator of which is the Net Liquidation Losses
from the Adjustable Rate Loans that became Liquidated Loans during the
related Due Period and the denominator of which is the Net Liquidation
Losses from all Loans that became Liquidated Loans during the related
Due Period;
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(c) after the Cross-over Date, and on which the Aggregate Liquidation Loss
Principal Amount exceeds the Aggregate Liquidation Loss Principal
Amount for the preceding Payment Date, the sum of (i) such excess
times a fraction, the numerator of which is the Net Liquidation Losses
from the Adjustable Rate Loans that became Liquidated Loans during the
related Due Period, and the denominator of which is the sum of the Net
Liquidation Losses from all Loans that became Liquidated Loans during
the related Due Period, and (ii) the Adjustable Rate Certificate
Liquidation Losses for the preceding Payment Date; and
(d) after the Cross-over Date, and on which the Aggregate Liquidation Loss
Principal Amount is less than the Aggregate Liquidation Loss Principal
Amount for the preceding Payment Date, (i) the Adjustable Rate
Certificate Liquidation Losses for the preceding Payment Date less
(ii) the product of the amount of such decrease in the Aggregate
Liquidation Loss Principal Amount times a fraction, the numerator of
which is the Adjustable Rate Certificate Liquidation Losses, and the
denominator of which is the sum of the Fixed Rate Certificate
Liquidation Losses and the Adjustable Rate Certificate Liquidation
Losses, in each case for the preceding Payment Date.
"Adjustable Rate Loan" means each Group I Adjustable Rate Loan or Group II
Adjustable Rate Loan.
"Adjusted Weighted Average Loan Rate" means (a) for the first 20 Payment
Dates, a rate equal to the weighted average of (x) the Weighted Average Loan
Rate, weighted on the basis of Subsidiary REMIC Regular Interests S-1 and S-3
and (y) the Weighted Average Loan Rate less 7.00%, weighted on the basis of
Subsidiary REMIC Regular Interest S-2 and (b) for each Payment Date thereafter,
a rate equal to the Weighted Average Loan Rate.
"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 AV-1,
Class AV-2, Class MV-1, Class MV-2, Class BV-1, Class AF-1, Class AF-2, Class
AF-3, Class
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AF-4, Class AF-5, Class AF-6, Class MF-1, Class MF-2, Class BF-1, Class B-2 and
Class P Principal Balances.
"Aggregate Liquidation Loss Principal Amount" means, for any Payment Date,
the excess, if any, of (a) the Aggregate Certificate Principal Balance (after
giving effect to 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), and
(iii) any amounts on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period
representing collections in respect of Principal Prepayments in Full
(other than any amounts referred to in Section 2.06(vii)) on Loans for
which a substitution has been made in accordance with Section 2.06.
"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.
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"Authenticating Agent" means any authenticating agent appointed pursuant to
Section 9.07.
"Available Funds Pass-Through Rate" means, for any Payment Date, a rate per
annum equal to the weighted average of the Expense Adjusted Loan Rates on the
then outstanding Adjustable Rate Loans.
"Average Sixty-Day Delinquency Ratio Test" means, to be considered
"satisfied" for any Payment Date, that the arithmetic average of the Sixty-Day
Delinquency Ratios for the Fixed Rate Loans or the Adjustable Rate Loans, as
applicable, for such Payment Date and for the two immediately preceding Payment
Dates is less than or equal to 35% of the Senior Enhancement Percentage for the
Fixed Rate Loans or Adjustable Rate Loans, as applicable.
"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 payment.
"Book-Entry Certificate" means any Certificate registered in the name of
the Depository or its nominee, ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than (a) a Saturday or a Sunday, or (b)
another day on which banking institutions in the city in which the Person taking
action hereunder are authorized or obligated by law, executive order, or
governmental decree to be closed.
"Calculation Agent" means the Person who establishes LIBOR with respect to
each Interest Reset Period. The Calculation Agent shall be the Trustee unless
the Trustee is unable or unwilling so to act, in which case the Calculation
Agent shall be a financial institution appointed by the Seller.
"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 1999-H,
Class AV-1, Class AV-2, Class MV-1, Class MV-2, Class BV-1, Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class A-IO, Class MF-1,
Class MF-2, Class BF-1, Class B-2 or Class P, executed and delivered by the
Trustee substantially in the form of Exhibit A-1, A-2, A-3, B-1, B-2, C-1, C-2
or Q, as applicable, but does not include the Class C Certificates.
"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.
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"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, request or demand, only Certificates or Class C Certificates
which the Trustee knows to be so owned shall be so disregarded.
"Class," "Class A," "Class M," "Class B," "Class P," or "Class C" means
pertaining to Class A Certificates, Class M Certificates, Class B Certificates,
Class P Certificates and/or Class C Certificates, as the case may be.
"Class A Certificates" means the Class AV and Class AF Certificates,
collectively.
"Class A Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class A 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 A 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 December 15,
1999) at (1) the Class AV-1 Pass-Through Rate on the Class AV-1 Principal
Balance, (2) the Class AV-2 Pass-Through Rate on the Class AV-2 Principal
Balance, (3) the Class AF-1 Pass-Through Rate on the Class AF-1 Principal
Balance, (4) the Class AF-2 Pass-Through Rate on the Class AF-2 Principal
Balance, (5) the Class AF-3 Pass-Through Rate on the Class AF-3 Principal
Balance, (6) the Class AF-4 Pass-Through Rate on the Class AF-4 Principal
Balance, (7) the Class AF-5 Pass-Through Rate on the Class AF-5 Principal
Balance, (8) the Class AF-6 Pass-Through Rate on the Class AF-6 Principal
Balance, and (9) the Class A-IO Pass-Through Rate on the Class A-IO Notional
Principal Amount, in each case to be calculated immediately prior to such
Payment Date, (b) the aggregate of the Unpaid Class A Interest Shortfalls, if
any, with respect to each Class of Class A Certificates, and (c)(i) if there is
no Class A Principal Deficiency Amount for such Payment Date, the Class A
Formula Principal Distribution Amount, or (ii) if there is a Class A Principal
Deficiency Amount for such Payment Date, the amount determined in accordance
with Section 8.04(b)(6)(i).
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"Class A Formula Interest Distribution Amount" means, as to each Class of
Class A Certificates and any Payment Date, the sum of (1) the amount specified
in clause (a)(1), (2), (3), (4), (5), (6), (7), (8) or (9), as appropriate, of
the definition of the term "Class A Formula Distribution Amount" and (2) the
Unpaid Class A Interest Shortfall, if any, with respect to such Class.
"Class A Formula Principal Distribution Amount" means, for any Payment
Date, the sum of the Class AV-1 Formula Principal Distribution Amount, the Class
AV-2 Formula Principal Distribution Amount and the Class AF Formula Principal
Distribution Amount.
"Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Payment Date, the amount, if any, by which the Class A
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 A Principal Balance" means, for any Payment Date, the sum of the
Class AV-1 Principal Balance, the Class AV-2 Principal Balance, the Class AF-1
Principal Balance, the Class AF-2 Principal Balance, the Class AF-3 Principal
Balance, the Class AF-4 Principal Balance, the Class AF-5 Principal Balance and
the Class AF-6 Principal Balance.
"Class A Principal Deficiency Amount" means, for any Payment Date, the
excess, if any, of (a) the Class A 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 Certificates" means the Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6 and Class A-IO Certificates.
"Class AF Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AF Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a Trigger
Event exists, the Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the Class AF Principal Balance over
(B) the lesser of (x) 62.76% of the aggregate Scheduled Principal Balances
of the Fixed Rate Loans or (y) the aggregate Scheduled Principal Balances
of the Fixed Rate Loans minus $9,000,000.
"Class AF Principal Balance" means, for any Payment Date, the sum of the
Class Principal Balance of each Class of Class AF Certificates.
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<PAGE>
"Class AF-1 Certificate" means any one of the Class AF-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions. "Class AF-1 Distribution Amount" means, for any Payment
Date, that portion of the Class A 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 Certificate" means any one of the Class AF-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-2 Distribution Amount" means, for any Payment Date, that portion
of the Class A 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 Certificate" means any one of the Class AF-3 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-3 Distribution Amount" means, for any Payment Date, that portion
of the Class A 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 Certificate" means any one of the Class AF-4 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
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<PAGE>
"Class AF-4 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class AF-4
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"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 Certificate" means any one of the Class AF-5 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-5 Distribution Amount" means, for any Payment Date, that portion
of the Class A 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 Certificate" means any one of the Class AF-6 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-1 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AF-6 Distribution Amount" means, for any Payment Date, that portion
of the Class A 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 Percentages" means, for any Payment Date occurring
during the periods set forth below, the percentage designated as such as
follows:
Class AF-6
Period (dates inclusive) Lockout Percentage
----------------------------------- ------------------
December 1999 through November 2001 0%
December 2001 through November 2003 20%
December 2003 through November 2004 80%
December 2004 through November 2005 100%
December 2005 and thereafter 300%
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<PAGE>
"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 A-IO Certificate" means any one of the Class A-IO Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-3 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-IO Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-IO
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-IO Notional Principal Amount" means, for any Payment Date, an
amount equal to (a) for the first 20 Payment Dates, the lesser of (i)
$90,000,000 or (ii) the Class A Principal Balance for such Payment Date, and (b)
thereafter, zero.
"Class A-IO Original Notional Principal Amount" means $90,000,000.
"Class AV Certificates" means the Class AV-1 and Class AV-2 Certificates,
collectively.
"Class AV Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AV Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a Trigger
Event exists, the sum of the Group I ARM Formula Principal Distribution
Amount and the Group II ARM Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the Class AV Principal Balance over
(B) the lesser of (x) 56.42% of the aggregate Scheduled Principal Balances
of the Adjustable Rate
1-9
<PAGE>
Loans and (y) the aggregate Scheduled Principal Balances of the Adjustable
Rate Loans minus $4,500,000.
"Class AV Principal Balance" means, for any Payment Date, the sum of the
Class AV-1 and Class AV-2 Principal Balances.
"Class AV Principal Distribution Amount" means, for any Payment Date, that
portion of the Class A Distribution Amount to be distributed to the Class AV
Certificateholders pursuant to Section 8.04(b).
"Class AV-1 Available Funds Cap Carryover Amount" means, for any Payment
Date, an amount equal to the sum of (1) the excess, if any, of (a) one month's
interest (or, as to the first Payment Date, interest from and including the
Closing Date to but excluding December 15, 1999) at the Class AV-1 Pass-Through
Rate (determined without respect to any limitation imposed by the Available
Funds Pass-Through Rate) on the Class AV-1 Principal Balance over (b) the amount
specified in clause (a)(1) of the definition of the term "Class A Formula
Distribution Amount" and (2) the amount of any Class AV-1 Available Funds Cap
Carryover Amount for the preceding Payment Date to the extent not distributed on
such preceding Payment Date and (3) interest accrued on the amounts described in
clauses (1) and (2) above during the accrual period for the current Payment Date
at the Class AV-1 Pass-Through Rate for such Payment Date.
"Class AV-1 Certificate" means any one of the Class AV-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AV-1 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class AV-1
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AV-1 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AV-1 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a Trigger
Event exists, the Group I ARM Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the lesser of (A) the Group I ARM Formula Principal
Distribution Amount and (B) the Class AV Formula Principal Distribution
Amount.
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<PAGE>
"Class AV-1 Principal Balance" means, for any Payment Date, the Original
Class AV-1 Principal Balance less all amounts previously distributed to Holders
of Class AV-1 Certificates in respect of principal.
"Class AV-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class AV-1 Distribution Amount to be distributed to the
Class AV-1 Certificateholders pursuant to Section 8.04(b)(6) on such Payment
Date.
"Class AV-2 Available Funds Cap Carryover Amount" means, for any Payment
Date, an amount equal to the sum of (1) the excess, if any, of (a) one month's
interest (or, as to the first Payment Date, interest from and including the
Closing Date to but excluding December 15, 1999) at the Class AV-2 Pass-Through
Rate (determined without respect to any limitation imposed by the Available
Funds Pass-Through Rate) on the Class AV-2 Principal Balance over (b) the amount
specified in clause (a)(2) of the definition of the term "Class A Formula
Distribution Amount" and (2) the amount of any Class AV-2 Available Funds Cap
Carryover Amount for the preceding Payment Date to the extent not distributed on
such preceding Payment Date and (3) interest accrued on the amounts described in
clauses (1) and (2) above during the accrual period for the current Payment Date
at the Class AV-2 Pass-Through Rate for such Payment Date.
"Class AV-2 Certificate" means any one of the Class AV-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class AV-2 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class AV-2
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class AV-2 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AV-2 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a Trigger
Event exists, the Group II ARM Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the lesser of (A) the Group II ARM Formula Principal
Distribution Amount and (B) the Class AV Formula Principal Distribution
Amount minus the Class AV-1 Formula Principal Distribution Amount.
"Class AV-2 Principal Balance" means, for any Payment Date, the Original
Class AV-2 Principal Balance less all amounts previously distributed to Holders
of Class AV-2 Certificates in respect of principal.
1-11
<PAGE>
"Class AV-2 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class AV-2 Distribution Amount to be distributed to the
Class AV-2 Certificateholders pursuant to Section 8.04(b)(6) on such Payment
Date.
"Class B Certificates" means the Class B-1 and Class B-2 Certificates,
collectively.
"Class B Principal Balance" means, for any Payment Date, the sum of the
Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B-1 Certificates" means the Class BF-1 Certificates and the Class
BV-1 Certificates, collectively.
"Class B-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 December 15,
1999) at (1) the Class BV-1 Pass-Through Rate on the Class BV-1 Adjusted
Principal Balance and (2) the Class BF-1 Pass-Through Rate on the Class BF-1
Adjusted Principal Balance, in each case to be calculated immediately prior to
such Payment Date, (b) the aggregate of the Unpaid Class B-1 Interest
Shortfalls, if any, with respect to each Class of Class B-1 Certificates, (c)
the sum of the Class BF-1 and Class BV-1 Formula Principal Distribution Amounts
and (d) the aggregate of the Class B-1 Formula Liquidation Loss Interest
Distribution Amounts, if any, with respect to each Class of Class B-1
Certificates.
"Class B-1 Formula Interest Distribution Amount" means, as to each Class of
Class B-1 Certificates and any Payment Date, the sum of (1) the amount specified
in clause (a)(1) or (2), as appropriate, of the definition of the term "Class
B-1 Formula Distribution Amount" and (2) the Unpaid Class B-1 Interest
Shortfall, if any, with respect to such Class.
"Class B-1 Formula Liquidation Loss Interest Distribution Amount" means, as
to each Class of Class B-1 Certificates and any Payment Date, the sum of (a) the
Class B-1 Liquidation Loss Interest Shortfall, if any, for such Class and (b)
the Unpaid Class B-1 Liquidation Loss Interest Shortfall, if any, for such
Class.
"Class B-1 Interest Shortfall" means, as to each Class of Class B-1
Certificates and any Payment Date, the amount, if any, by which (a) the Class
B-1 Formula Interest Distribution Amount for such Class exceeds (b) the amount
distributed to Holders of such Class on such Payment Date pursuant to Section
8.04(b)(3).
"Class B-1 Liquidation Loss Interest Shortfall" means, as to each Class of
Class B-1 Certificates and any Payment Date, the amount, if any, by which (a)
the Class B-1 Formula Liquidation Loss Interest Distribution Amount for such
Class exceeds (b) any amount distributed to the Holders of such Class on such
Payment Date pursuant to Section 8.04(b)(12).
"Class B-1 Principal Balance" means, for any Payment Date, the sum of the
Class BF-1 Principal Balance and the Class BV-1 Principal Balance.
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<PAGE>
"Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class B-2 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class B-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 B-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 December 15,
1999) at the Class B-2 Pass-Through Rate on the Class B-2 Principal Balance, (b)
any Unpaid Class B-2 Interest Shortfall, and (c) the Class B-2 Formula Principal
Distribution Amount.
"Class B-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 B-2 Formula Distribution Amount".
"Class B-2 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of
(a) the Class B-2 Principal Balance and
(b) (i) if the Payment Date is before the Additional Principal
Entitlement Date, the excess of (A) the sum of the Group I ARM and Group II
ARM Formula Principal Distribution Amounts and the Formula Principal
Distribution Amount over (B) the sum of the Class A, Class M-1, Class M-2,
and Class B-1 Formula Principal Distribution Amounts on such Payment Date;
and
(ii) if the Payment Date is on or after the Additional Principal
Entitlement Date, the excess of (A) the sum of the Class A, Class M-1,
Class M-2 and Class B Principal Balances over (B) the lesser of (x) 97% of
the aggregate Scheduled Principal Balances of all Loans or (y) the
Scheduled Principal Balances of all Loans minus $13,500,000.
"Class B-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 December 1999 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 the priorities set forth in Section 8.04(b).
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<PAGE>
"Class B-2 Guaranty Payment" means, for any Payment Date, the amount, if
any, by which (a) the sum of the Class B-2 Formula Distribution Amount and the
Class B-2 Liquidation Loss Principal Amount exceeds (b) the Class B-2
Distribution Amount; provided that the Class B-2 Guaranty Payment shall not
exceed the amount necessary to reduce the Class B-2 Principal Balance to zero.
"Class B-2 Interest Shortfall" means, for any Payment Date, the amount, if
any, by which (a) the Class B-2 Formula Interest Distribution Amount exceeds (b)
the sum of the amounts distributed to Class B-2 Certificateholders on such
Payment Date pursuant to clauses (i) and (ii) of Section 8.04(b)(13) and any
Class B-2 Guaranty Payment.
"Class B-2 Limited Guaranty" means the limited guaranty of the Guarantor
provided pursuant to Section 8.03.
"Class B-2 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (a) the Class B-2 Principal Balance (after giving effect to all
distributions of principal on the Class B-2 Certificates on such Payment Date)
and (b) the Aggregate Liquidation Loss Principal Amount.
"Class B-2 Principal Balance" means, for any Payment Date, the Original
Class B-2 Principal Balance less all amounts previously distributed to Holders
of Class B-2 Certificates in respect of principal.
"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-1 and evidencing an
interest designated as a "regular interest" in the Master 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, the
sum of (1) the amount specified in clause (a)(2) of the definition of the term
"Class B-1 Formula Distribution Amount," (2) the Unpaid Class B-1 Interest
Shortfall, if any, with respect to the Class BF-1 Certificates and (3) the Class
BF-1 Formula Principal Distribution Amount.
"Class BF-1 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
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<PAGE>
(a) the Class BF-1 Principal Balance and
(b) (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 any Class AF, Class MF-1 and Class MF-2
Formula Principal Distribution Amounts on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the sum of the Class AF, Class
MF-1, Class MF-2 and Class BF-1 Principal Balances over (B) the lesser of
(x) 90.22% of the aggregate Scheduled Principal Balances of the Fixed Rate
Loans or (y) the aggregate Scheduled Principal Balances of the Fixed Rate
Loans minus $9,000,000.
"Class BF-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding December 15, 1999)
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 Principal Amount" means, for any Payment Date,
the lesser of (A) the Class BF-1 Principal Balance (after giving effect to all
distributions of principal on the Class BF-1 Certificates on such Payment Date)
and (B) the Fixed Rate Certificate Liquidation Losses 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-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class BF-1 Distribution Amount to be distributed to the
Class BF-1 Certificateholders pursuant to Section 8.04(b)(9).
"Class BV-1 Adjusted Principal Balance" means, for any Payment Date, the
Class BV-1 Principal Balance minus the Class BV-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class BV-1 Available Funds Cap Carryover Amount" means, for any Payment
Date, an amount equal to the sum of (1) the excess, if any, of (a) one month's
interest (or, as to the first Payment Date, interest from and including the
Closing Date to but excluding December 15, 1999) at the Class BV-1 Pass-Through
Rate (determined without respect to any limitation imposed by the Available
Funds Pass-Through Rate) on the Class BV-1 Principal Balance over (b) the amount
specified in clause (a)(1) of the definition of the term "Class B-1 Formula
Distribution Amount" and (2) the amount of any Class BV-1 Available Funds Cap
Carryover Amount for the preceding Payment Date to the extent not distributed on
such preceding Payment Date and (3) interest accrued on the amounts described in
clauses (1) and (2) above during the
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<PAGE>
accrual period for the current Payment Date at the Class BV-1 Pass Through Rate
for such Payment Date.
"Class BV-1 Certificate" means any one of the Class BV-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class BV-1 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class BV-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 BV-1 Formula Distribution Amount" means, for any Payment Date, the
sum of (1) the amount specified in clause (a)(1) of the definition of the term
"Class B-1 Formula Distribution Amount," (2) the Unpaid Class B-1 Interest
Shortfall, if any, with respect to the Class BV-1 Certificates and (3) the Class
BV-1 Formula Principal Distribution Amount.
"Class BV-1 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class BV-1 Principal Balance and
(b) (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 sum of the Group
I ARM Formula Principal Distribution Amount and the Group II ARM Formula
Principal Distribution Amount less the Class AV, Class MV-1 and Class MV-2
Formula Principal Distribution Amounts on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the sum of the Class AV, Class
MV-1, Class MV-2 and Class BV-1 Principal Balances over (B) the lesser of
(x) 90.22% of the aggregate Scheduled Principal Balances of the Adjustable
Rate Loans or (y) the aggregate Scheduled Principal Balances of the
Adjustable Rate Loans minus $4,500,000.
"Class BV-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding December 15, 1999)
at the Class BV-1 Pass-Through Rate on the Class BV-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class BV-1 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (A) the Class BV-1 Principal Balance (after giving effect to all
distributions of principal on the Class BV-1 Certificates on such Payment Date)
and (B) the Adjustable Rate Certificate Liquidation Losses for such Payment
Date.
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<PAGE>
"Class BV-1 Principal Balance" means, for any Payment Date, the Original
Class BV-1 Principal Balance less all amounts previously distributed to Holders
of Class BV-1 Certificates in respect of principal.
"Class BV-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class BV-1 Distribution Amount to be distributed to the
Class BV-1 Certificateholders pursuant to Section 8.04(b)(9).
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Certificates" means any one of the Class C Master Certificates or
Class C Subsidiary Certificates.
"Class C Master Certificate" means a Certificate for Home Equity Loans,
Series 1999-H, bearing the designation Class C Master, executed and delivered by
the Trustee substantially in the form of Exhibit I, and evidencing an interest
designated as a "residual interest" in the Master REMIC for purposes of the
REMIC Provisions.
"Class C Master Distribution Amount" means, for any Payment Date, the
amount, if any, distributable in respect of the Class C Master Certificates
pursuant to Section 8.04(b).
"Class C Subsidiary Certificate" means a Certificate for Home Equity Loans,
Series 1999-H, bearing the designation Class C Subsidiary, executed and
delivered by the Trustee substantially in the form attached hereto as Exhibit I,
and evidencing an interest designated as a "residual interest" in the Subsidiary
REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, for any Payment Date, the
amounts, if any, distributable in respect of the Class C Subsidiary Certificate
pursuant to Section 8.04(b).
"Class M Certificates" means the Class M-1 and Class M-2 Certificates,
collectively.
"Class M-1 Certificates" means the Class MF-1 and Class MV-1 Certificates,
collectively.
"Class M-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 December 15,
1999) at (1) the Class MV-1 Pass-Through Rate on the Class MV-1 Adjusted
Principal Balance and (2) the Class MF-1 Pass-Through Rate on the Class MF-1
Adjusted Principal Balance, in each case to be calculated immediately prior to
such Payment Date, (b) the aggregate of the Unpaid Class M-1 Interest
Shortfalls, if any, with respect to each Class of Class M-1 Certificates, (c)
the sum of the Class MF-1 and Class MV-1 Formula Principal Distribution Amounts
and (d) the aggregate of the Class M-1 Formula Liquidation Loss Interest
Distribution Amounts, if any, with respect to each Class of Class M-1
Certificates.
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<PAGE>
"Class M-1 Formula Interest Distribution Amount" means, as to each Class of
Class M-1 Certificates and any Payment Date, the sum of (1) the amount specified
in clause (a)(1) or (2), as appropriate, of the definition of the term "Class
M-1 Formula Distribution Amount" and (2) the Unpaid Class M-1 Interest
Shortfall, if any, with respect to such Class.
"Class M-1 Formula Liquidation Loss Interest Distribution Amount" means, as
to each Class of Class M-1 Certificates and any Payment Date, the sum of (a) the
Class M-1 Liquidation Loss Interest Shortfall, if any, for such Class and (b)
the Unpaid Class M-1 Liquidation Loss Interest Shortfall, if any, for such
Class.
"Class M-1 Interest Shortfall" means, as to each Class of Class M-1
Certificates and any Payment Date, the amount, if any, by which (a) the Class
M-1 Formula Interest Distribution Amount for such Class exceeds (b) the amount
distributed to Holders of such Class on such Payment Date pursuant to Section
8.04(b)(3).
"Class M-1 Liquidation Loss Interest Shortfall" means, as to each Class of
Class M-1 Certificates and any Payment Date, the amount, if any, by which (a)
the Class M-1 Formula Liquidation Loss Interest Distribution Amount for such
Class exceeds (b) any amount distributed to the Holders of such Class on such
Payment Date pursuant to Section 8.04(b)(10).
"Class M-1 Principal Balance" means, for any Payment Date, the sum of the
Class MF-1 Principal Balance and the Class MV-1 Principal Balance.
"Class M-2 Certificates" means the Class MF-2 and Class MV-2 Certificates,
collectively.
"Class M-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 December 15,
1999) at (1) the Class MV-2 Pass-Through Rate on the Class MV-2 Adjusted
Principal Balance and (2) the Class MF-2 Pass-Through Rate on the Class MF-2
Adjusted Principal Balance, in each case to be calculated immediately prior to
such Payment Date, (b) the aggregate of the Unpaid Class M-2 Interest
Shortfalls, if any, with respect to each Class of Class M-2 Certificates, (c)
the sum of the Class MF-2 and Class MV-2 Formula Principal Distribution Amounts
and (d) the aggregate of the Class M-2 Formula Liquidation Loss Interest
Distribution Amounts, if any, with respect to each Class of Class M-2
Certificates.
"Class M-2 Formula Interest Distribution Amount" means, with respect to
each Class of Class M-2 Certificates and any Payment Date, the sum of (1) the
amount specified in clause (a)(1) or (2), as appropriate, of the definition of
the term "Class M-2 Formula Distribution Amount" and (2) the Unpaid Class M-2
Interest Shortfall, if any, with respect to such Class.
"Class M-2 Formula Liquidation Loss Interest Distribution Amount" means, as
to each Class of Class M-2 Certificates and any Payment Date, the sum of (a) the
Class M-2 Liquidation
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<PAGE>
Loss Interest Amount, if any, for such Class and (b) the Unpaid Class M-2
Liquidation Loss Interest Shortfall, if any, for such Class.
"Class M-2 Interest Shortfall" means, as to each Class of Class M-2
Certificates and any Payment Date, the amount, if any, by which (a) the Class
M-2 Formula Interest Distribution Amount for such Class exceeds (b) the amount
distributed to Holders of such Class on such Payment Date pursuant to Section
8.04(b)(4).
"Class M-2 Liquidation Loss Interest Amount" means, as to the Class MF-2
and Class MV-2 Certificates, respectively, and any Payment Date, an amount equal
to one month's interest (or, as to the first Payment Date, interest from and
including the Closing Date to but excluding December 15, 1999) at (a) the Class
MF-2 Pass-Through Rate on the Class MF-2 Liquidation Loss Principal Amount (if
any) for the immediately preceding Payment Date and (b) the Class MV-2
Pass-Through Rate on the Class MV-2 Liquidation Loss Principal Amount (if any)
for the immediately preceding Payment Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, as to each Class of
Class M-2 Certificates and any Payment Date, the amount, if any, by which (a)
the Class M-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 M-2 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (a) the Class M-2 Principal Balance (after giving effect to all
distributions of principal on the Class M-2 Certificates on such Payment Date)
and (b) the excess, if any, of the Aggregate Liquidation Loss Principal Amount
over the Class B Principal Balance (after giving effect to all distributions of
principal on the Class B Certificates on such Payment Date).
"Class M-2 Principal Balance" means, for any Payment Date, the sum of the
Class MF-2 Principal Balance and the Class MV-2 Principal Balance.
"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-1 and evidencing an
interest designated as a "regular interest" in the Master 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).
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<PAGE>
"Class MF-1 Formula Distribution Amount" means for any Payment Date, the
sum of (1) the amount specified in clause (a)(2) of the definition of the term
"Class M-1 Formula Distribution Amount," (2) the Unpaid Class M-1 Interest
Shortfall, if any, with respect to the Class MF-1 Certificates and (3) the Class
MF-1 Formula Principal Distribution Amount.
"Class MF-1 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of
(a) the Class MF-1 Principal Balance and
(b) (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 on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the sum of the Class AF and Class
MF-1 Principal Balances over (B) the lesser of (x) 73.66% of the aggregate
Scheduled Principal Balances of the Fixed Rate Loans or (y) the aggregate
Scheduled Principal Balances of the Fixed Rate Loans minus $9,000,000.
"Class MF-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding December 15, 1999)
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 Principal Amount" means, for any Payment Date,
the lesser of (A) the Class MF-1 Principal Balance (after giving effect to all
distributions of principal on the Class MF 1 Certificates on such Payment Date)
and (B) the excess, if any, of the Fixed Rate Certificate Liquidation Losses
over the aggregate of the Class MF-2 Principal Balance and the Class BF-1
Principal Balance (after giving effect to all distributions of principal on the
Class MF-2 and Class BF-1 Certificates on such Payment Date).
"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-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class MF-1 Distribution Amount to be distributed to the
Class MF-1 Certificateholders pursuant to Section 8.04(b)(7).
"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.
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<PAGE>
"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-1 and evidencing an
interest designated as a "regular interest" in the Master 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, the
sum of (1) the amount specified in clause (a)(2) of the definition of the term
"Class M-2 Formula Distribution Amount," (2) the Unpaid Class M-2 Interest
Shortfall, if any, with respect to the Class MF-2 Certificates and (3) the Class
MF-2 Formula Principal Distribution Amount.
"Class MF-2 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class MF-2 Principal Balance and
(b) (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 and Class MF-1 Formula
Principal Distribution Amounts on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the sum of the Class AF, Class MF-1
and Class MF-2 Principal Balances over (B) the lesser of (x) 83.76% of the
aggregate Scheduled Principal Balances of the Fixed Rate Loans or (y) the
aggregate Scheduled Principal Balances of the Fixed Rate Loans minus
$9,000,000.
"Class MF-2 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding December 15, 1999)
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 Principal Amount" means, for any Payment Date,
the lesser of (A) the Class MF-2 Principal Balance (after giving effect to all
distributions of principal on the Class MF-2 Certificates on such Payment Date)
and (B) the excess, if any, of the Fixed Rate Certificate Liquidation Losses
over the Class BF-1 Principal Balance (after giving effect to all distributions
of principal on the Class BF-1 Certificates on such Payment Date).
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<PAGE>
"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 MF-2 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class MF-2 Distribution Amount to be distributed to the
Class MF-2 Certificateholders pursuant to Section 8.04(b)(8).
"Class MV-1 Adjusted Principal Balance" means, for any Payment Date, the
Class MV-1 Principal Balance minus the Class MV-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class MV-1 Available Funds Cap Carryover Amount" means, for any Payment
Date, an amount equal to the sum of (1) the excess, if any, of (a) one month's
interest (or, as to the first Payment Date, interest from and including the
Closing Date to but excluding December 15, 1999) at the Class MV-1 Pass-Through
Rate (determined without respect to any limitation imposed by the Available
Funds Pass-Through Rate) on the Class MV-1 Principal Balance over (b) the amount
specified in clause (a)(1) of the definition of the term "Class M-1 Formula
Distribution Amount" and (2) the amount of any Class MV-1 Available Funds Cap
Carryover Amount for the preceding Payment Date to the extent not distributed on
such preceding Payment Date and (3) interest accrued on the amounts described in
clauses (1) and (2) above during the accrual period for the current Payment Date
at the Class MV-1 Pass Through Rate for such Payment Date.
"Class MV-1 Certificate" means any one of the Class MV-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class MV-1 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class MV-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 MV-1 Formula Distribution Amount" means, for any Payment Date, the
sum of (1) the amount specified in clause (a)(1) of the definition of the term
"Class M-1 Formula Distribution Amount," (2) the Unpaid Class M-1 Interest
Shortfall, if any, with respect to the Class MV-1 Certificates and (3) the Class
MV-1 Formula Principal Distribution Amount.
"Class MV-1 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class MV-1 Principal Balance and
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<PAGE>
(b) (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 sum of the Group
I ARM Formula Principal Distribution Amount and the Group II ARM Formula
Principal Distribution Amount less the Class AV Formula Principal
Distribution Amount on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the sum of the Class AV and Class
MV-1 Principal Balances over (B) the lesser of (x) 70.26% of the aggregate
Scheduled Principal Balances of the Adjustable Rate Loans or (y) the
aggregate Scheduled Principal Balances of the Adjustable Rate Loans minus
$4,500,000.
"Class MV-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding December 15, 1999)
at the Class MV-1 Pass-Through Rate on the Class MV-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date
"Class MV-1 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (A) the Class MV-1 Principal Balance (after giving effect to all
distributions of principal on the Class MV-1 Certificates on such Payment Date)
and (B) the excess, if any, of the Adjustable Rate Certificate Liquidation
Losses over the aggregate of the Class MV-2 Principal Balance and the Class BV-1
Principal Balance (after giving effect to all distributions of principal on the
Class MV-2 and Class BV-1 Certificates on such Payment Date).
"Class MV-1 Principal Balance" means, for any Payment Date, the Original
Class MV-1 Principal Balance less all amounts previously distributed to Holders
of Class MV-1 Certificates in respect of principal.
"Class MV-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class MV-1 Distribution Amount to be distributed to the
Class MV-1 Certificateholders pursuant to Section 8.04(b)(7).
"Class MV-2 Adjusted Principal Balance" means, for any Payment Date, the
Class MV-2 Principal Balance minus the Class MV-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class MV-2 Available Funds Cap Carryover Amount" means, for any Payment
Date, an amount equal to the sum of (1) the excess, if any, of (a) one month's
interest (or, as to the first Payment Date, interest from and including the
Closing Date to but excluding December 15, 1999) at the Class MV-2 Pass-Through
Rate (determined without respect to any limitation imposed by the Available
Funds Pass-Through Rate) on the Class MV-2 Principal Balance over (b) the amount
specified in clause (a)(1) of the definition of the term "Class M-2 Formula
Distribution Amount" and (2) the amount of any Class MV-2 Available Funds Cap
Carryover Amount for the preceding Payment Date to the extent not distributed on
such preceding Payment
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<PAGE>
Date and (3) interest accrued on the amounts described in clauses (1) and (2)
above during the accrual period for the current Payment Date at the Class MV-2
Pass Through Rate for such Payment Date.
"Class MV-2 Certificate" means any one of the Class MV-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class MV-2 Distribution Amount" means, for any Payment Date, the lesser of
(a) the Class MV-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 MV-2 Formula Distribution Amount" means, for any Payment Date, the
sum of (1) the amount specified in clause (a)(1) of the definition of the term
"Class M-2 Formula Distribution Amount," (2) the Unpaid Class M-2 Interest
Shortfall, if any, with respect to the Class MV-2 Certificates and (3) the Class
MV-2 Formula Principal Distribution Amount.
"Class MV-2 Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class MV-2 Principal Balance and
(b) (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 sum of the Group
I ARM Formula Principal Distribution Amount and the Group II ARM Formula
Principal Distribution Amount less the Class AV and Class MV-1 Formula
Principal Distribution Amounts on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown Date and no
Trigger Event exists, the excess of (A) the sum of the Class AV, Class MV-1
and Class MV-2 Principal Balances over (B) the lesser of (x) 81.72% of the
aggregate Scheduled Principal Balances of the Adjustable Rate Loans or (y)
the aggregate Scheduled Principal Balances of the Adjustable Rate Loans
minus $4,500,000.
"Class MV-2 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding December 15, 1999)
at the Class MV-2 Pass-Through Rate on the Class MV-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class MV-2 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (A) the Class MV-2 Principal Balance (after giving effect to all
distributions of principal on the Class MV-2 Certificates on such Payment Date)
and (B) the excess, if any, of
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<PAGE>
the Adjustable Rate Certificate Liquidation Losses over the Class BV-1 Principal
Balance (after giving effect to all distributions of principal on the Class BV-1
Certificates on such Payment Date).
"Class MV-2 Principal Balance" means, for any Payment Date, the Original
Class MV-2 Principal Balance less all amounts previously distributed to Holders
of Class MV-2 Certificates in respect of principal.
"Class MV-2 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class MV-2 Distribution Amount to be distributed to the
Class MV-2 Certificateholders pursuant to Section 8.04(b)(8).
"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 Master 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
Certificates 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 Certificates in respect of principal.
"Class Principal Balance" means any of the Class AV-1, Class AV-2, Class
MV-1, Class MV-2, Class BV-1, 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 B-2 or Class P
Principal Balances.
"Closing Date" means November 30, 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"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).
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<PAGE>
"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 Briggs and Morgan, Professional
Association, or other legal counsel for the Originator.
"Counsel for the Seller" means Briggs and Morgan, Professional Association,
or other legal counsel for the Seller.
"Cumulative Realized Loss Ratio" means, for any Payment Date:
(a) with respect to the Fixed Rate Loans, a fraction, expressed as a
percentage, the numerator of which is the Cumulative Realized Losses
for the Fixed Rate Loans for that Payment Date and the denominator of
which is the sum of the Cut-off Date Principal Balances of all Fixed
Rate Loans; and
(b) with respect to the Adjustable Rate Loans, a fraction, expressed as a
percentage, the numerator of which is the Cumulative Realized Losses
for the Adjustable Rate Loans for that Payment Date and the
denominator of which is the sum of the Cut-off Date Principal Balances
of all Adjustable Rate Loans.
"Cumulative Realized Losses" means, for any Payment Date, the sum of the
Realized Losses for the Fixed Rate Loans or the Adjustable Rate Loans, as
applicable, 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 Fixed Rate
Loans or Adjustable Rate Loans, as applicable, for such Payment Date is less
than or equal to the percentage set forth below:
Fixed Rate Loans Adjustable Rate Loans
Payment Date Percentage Percentage
------------ ---------- ----------
December 2002 - November 2003 3.80% 4.40%
December 2003 - November 2004 4.51% 5.23%
December 2004 - November 2006 4.75% 5.50%
December 2006 and thereafter 5.25% 6.00%
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<PAGE>
"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, F-1+ by Fitch and D-1+ by Duff & Phelps in
the case of commercial paper, or BBB+ or higher by each of S&P, Fitch 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 Loan (other than a Subsequent
Loan), September 30, 1999 (or the date of origination, if later).
"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.
"Defaulted Loan" means a Loan with respect to which the Servicer commenced
foreclosure proceedings, made a sale of such Loan to a third party for
foreclosure or enforcement, or as to which there was a Delinquent Payment 180 or
more days past due.
"Definitive Certificates" has the meaning assigned in Section 9.02(e).
"Delinquent Payment" means, as to any Loan, with respect to any Due Period,
any payment or portion of a payment that was originally scheduled to be made
during such Due Period under such Loan (after giving effect to any reduction in
the principal amount deemed owed on such Loan by the Obligor) and was not
received or applied during such Due Period and deposited in the Certificate
Account, whether or not any payment extension has been granted by the Servicer;
provided, however, that with respect to any Liquidated Loan, the payment
scheduled to be made in the Due Period in which such Loan became a Liquidated
Loan shall not be deemed a Delinquent Payment.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of (i) two Class
AV-1 Certificates evidencing $205,778,858 in Original Class AV-1 Principal
Balance, (ii) one Class AV-2 Certificate evidencing $28,854,474 in Original
Class AV-2 Principal Balance, (iii) one Class MV-1 Certificate evidencing
$20,750,000 in Original Class MV-1 Principal Balance, (iv) one Class MV-2
Certificate evidencing $17,200,000 in Original Class MV-2 Principal Balance, (v)
one Class BV-1 Certificate evidencing $12,750,000 in Original Class BV-1
Principal Balance, (vi) one Class AF-1 Certificate evidencing $178,634,491 in
Original Class AF-1 Principal
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<PAGE>
Balance, (vii) one Class AF-2 Certificate evidencing $129,334,162 in Original
Class AF-2 Principal Balance, (viii) one Class AF-3 Certificate evidencing
$39,333,268 in Original Class AF-3 Principal Balance, (ix) one Class AF-4
Certificate evidencing $51,500,000 in Original Class AF-4 Principal Balance, (x)
one Class AF-5 Certificate evidencing $38,196,744 in Original Class AF-5
Principal Balance, (xi) one Class AF-6 Certificate evidencing $51,268,000 in
Original Class AF-6 Principal Balance, (xii) one Class A-IO Certificate
evidencing a Class A-IO Original Notional Principal Amount of $90,000,000,
(xiii) one Class MF-1 Certificate evidencing $32,700,000 in Original Class MF-1
Principal Balance, (xiv) one Class MF-2 Certificate evidencing $30,300,000 in
Original Class MF-2 Principal Balance, (xv) one Class BF-1 Certificate
evidencing $19,400,000 in Original Class BF-1 Principal Balance and (xvi) one
Class B-2 Certificate evidencing $30,500,003 in Original Class B-2 Principal
Balance, and any permitted successor depository. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(5) of the Uniform
Commercial Code of the State of New York.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the second Business Day preceding each Payment
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
"Due Period" means, for any Payment Date after the first Payment Date, a
calendar month during the term of this Agreement and, for the first Payment
Date, the calendar months of October and November.
"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.
"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
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<PAGE>
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, F-1+ by Fitch (if rated by
Fitch) 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 Fitch (if rated by Fitch) 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 qualified to act as
Servicer of the Loans under applicable federal and state laws and regulations,
which Person services not less than an aggregate of $100,000,000 in outstanding
principal amount of manufactured housing conditional sales contracts and
installment loan agreements and 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 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) is of the same type (viz., Fixed-Rate Loan, Group
I Adjustable Rate Loan or Group II Adjustable Rate Loan) as the Replaced Loan or
Prepaid Loan, as the case may be, (f) if an Adjustable Rate Loan, bears interest
at a Loan Interest Rate that (i) is subject to adjustment based on the same
index as the Replaced Loan or Prepaid Loan, as the case may be, (ii) is
calculated by adding a specified percentage amount (the "gross margin") to the
index that is no less than the gross margin on the Replaced Loan or Prepaid
Loan, as the case may be, and (iii) is subject to a minimum rate of interest no
less than the minimum rate of interest on the Replaced Loan or Prepaid Loan, as
the case may be, and a maximum rate of interest no more than 1.0% greater than
the rate of interest on the Replaced Loan or Prepaid Loan, as the case may be,
(g) as of the date of its origination, was identified by the Originator under
its standard underwriting criteria as the same credit grade as the Replaced Loan
or Prepaid Loan, as the case may be, (h) the
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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 (i) the Combined LTV of such Loan is not more than 100 basis points
higher than the Combined LTV of the Replaced Loan or Prepaid Loan, as the case
may be.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Loans comprising a
portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Excess Interest" means, for any Payment Date, the amount by which the
Amount Available, less any Prepayment Charges for that Payment Date, exceeds the
sum of the amounts distributed on that Payment Date pursuant to clauses (1)
through (15) of Section 8.04(b).
"Expense Adjusted Loan Rate" means, with respect to any Adjustable Rate
Loan, the then applicable mortgage rate thereon, minus the Expense Fee Rate.
"Expense Fee Rate" means .50%.
"Extra Principal Distribution Amount" means, for any Payment Date, the
lesser of (1) the Excess Interest for that Payment Date and (2) the excess, if
any, of $13,500,000 over the sum of the Over-Collateralization Amounts for the
Fixed Rate Certificates and the Adjustable Rate Certificates (after giving
effect to the distributions of principal on the Certificates on that Payment
Date pursuant to clauses (6) through (9) and (13) of Section 8.04(b)).
"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 Certificates will be made pursuant to Section 12.04.
"Fitch" means Fitch IBCA, Inc., or any successor thereto; provided that, if
Fitch no longer has a rating outstanding on any Class of the Certificates, then
references herein to "Fitch" shall be deemed to refer to the NRSRO then rating
any Class of the Certificates (or, if more than
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one such NRSRO is then rating any Class of the Certificates, to such NRSRO as
may be designated by the Servicer), and references herein to ratings by or
requirements of Fitch shall be deemed to have the equivalent meanings with
respect to ratings by or requirements of such NRSRO.
"Fixed Rate Certificates" means the Class AF, Class MF-1, Class MF-2 and
Class BF-1 Certificates, collectively.
"Fixed Rate Certificate Liquidation Losses" means, for any Payment Date:
(a) on which the Aggregate Liquidation Loss Principal Amount is less than
or equal to the Class B-2 Principal Balance, zero;
(b) on which the Aggregate Liquidation Loss Principal Amount first exceeds
the Class B-2 Principal Balance (the "Cross-over Date"), such excess
times a fraction, the numerator of which is the Net Liquidation Losses
from the Fixed Rate Loans that became Liquidated Loans during the
related Due Period and the denominator of which is the Net Liquidation
Losses from all Loans that became Liquidated Loans during the related
Due Period;
(c) after the Cross-over Date, and on which the Aggregate Liquidation Loss
Principal Amount exceeds the Aggregate Liquidation Loss Principal
Amount for the preceding Payment Date, the sum of (i) such excess
times a fraction, the numerator of which is the Net Liquidation Losses
from the Fixed Rate Loans that became Liquidated Loans during the
related Due Period, and the denominator of which is the sum of the Net
Liquidation Losses from all Loans that became Liquidated Loans during
the related Due Period, and (ii) the Fixed Rate Certificate
Liquidation Losses for the preceding Payment Date; and
(d) after the Cross-over Date, and on which the Aggregate Liquidation Loss
Principal Amount is less than the Aggregate Liquidation Loss Principal
Amount for the preceding Payment Date, (i) the Fixed Rate Certificate
Liquidation Losses for the preceding Payment Date less (ii) the
product of the amount of such decrease in the Aggregate Liquidation
Loss Principal Amount times a fraction, the numerator of which is the
Fixed Rate Certificate Liquidation Losses, and the denominator of
which is the sum of the Fixed Rate Certificate Liquidation Losses and
the Adjustable Rate Certificate Liquidation Losses, in each case for
the preceding Payment Date.
"Fixed Rate Loan" means each closed-end home equity loan identified as such
in the List of Loans, which Fixed Rate Loan is to be assigned and conveyed by
the Seller 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 Cut-off Date, or Subsequent Cut-off Date
with respect to a Subsequent Fixed Rate Loan.
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"Formula Principal Distribution Amount" means, for any Payment Date, the
sum of:
(a) all scheduled payments of principal due on each outstanding Loan
during the prior Due Period as specified in the amortization schedule at
the time applicable thereto (after adjustments for previous Partial
Principal Prepayments and after any adjustment to such amortization
schedule by reason of any bankruptcy of an Obligor or similar proceeding or
any moratorium or similar waiver or grace period); plus
(b) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with respect to
the Loans; plus
(c) the aggregate Scheduled Principal Balance of all Loans that became
Liquidated Loans during the prior Due Period plus the amount of any
reduction in principal balance of any Loan during the prior Due Period
pursuant to bankruptcy proceedings involving the related Obligor; plus
(d) the aggregate Scheduled Principal Balance of all Loans
repurchased, and all amounts deposited in lieu of the repurchase of any
Loan, during the prior Due Period pursuant to Section 3.06(a) or, in the
event of a substitution of a Loan in accordance with Section 3.06(b), any
amount required to be deposited by the Servicer in the Certificate Account
during the prior Due Period pursuant to Section 3.06(b)(vi); plus
(e) any amount described in clauses (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 Fixed Rate Subaccount and deposited in the Certificate Account;
minus
(g) the sum of the Group I ARM Formula Principal Distribution Amount
and the Group II ARM Formula Principal Distribution Amount.
"GNMA" means the Government National Mortgage Association, or any successor
thereto.
"Group I Adjustable Rate Loan" means each closed-end home equity loan
identified as such in the List of Loans, which Group I Adjustable Rate Loan is
to be assigned and conveyed by the Seller 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 Cut-off Date, or
Subsequent Cut-off Date in the case of a Subsequent Group I Adjustable Rate
Loan.
"Group I ARM Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of (A) the Class AV-1 Principal Balance, or (B) the sum of the
following amounts with respect to the related Due Period, in each case computed
in accordance with the method specified in the relevant Group I Adjustable Rate
Loan:
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(i) all scheduled payments of principal due on each outstanding Group
I Adjustable Rate 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
(ii) the aggregate Scheduled Principal Balance of all Group I
Adjustable Rate Loans repurchased, and all amounts deposited in lieu of the
repurchase of any Group I Adjustable Rate Loan, during the prior Due Period
pursuant to Section 3.06(a) or, in the event of a substitution of a Group I
Adjustable Rate 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
(iii) the aggregate Scheduled Principal Balance of all Group I
Adjustable Rate Loans that became Liquidated Loans during the prior Due
Period plus the amount of any reduction in principal balance of any Group I
Adjustable Rate Loan during the prior Due Period pursuant to bankruptcy
proceedings involving the related Obligor; plus
(iv) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with respect to
the Group I Adjustable Rate Loans; plus
(v) any amount described in clauses (i) through (iv) above that was
not previously distributed because of an insufficient amount of funds
available in the Certificate Account; plus
(vi) on the Post-Funding Payment Date, any amount withdrawn from the
Pre-Funding Group I ARM Subaccount and deposited in the Certificate
Account.
"Group II Adjustable Rate Loan" means each closed-end home equity loan
identified as such in the List of Loans, which Group II Adjustable Rate Loan is
to be assigned and conveyed by the Seller 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 Cut-off Date, or
Subsequent Cut-off Date in the case of a Subsequent Group II Adjustable Rate
Loan.
"Group II ARM Formula Principal Distribution Amount" means, for any Payment
Date, the sum of the following amounts with respect to the related Due Period,
in each case computed in accordance with the method specified in the relevant
Adjustable Rate Loan:
(i) all scheduled payments of principal due on each outstanding
Adjustable Rate 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
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(ii) the aggregate Scheduled Principal Balance of all Adjustable Rate
Loans repurchased, and all amounts deposited in lieu of the repurchase of
any Adjustable Rate Loan, during the prior Due Period pursuant to Section
3.06(a) or, in the event of a substitution of a Adjustable Rate 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
(iii) the aggregate Scheduled Principal Balance of all Adjustable Rate
Loans that became Liquidated Loans during the prior Due Period plus the
amount of any reduction in principal balance of any Adjustable Rate Loan
during the prior Due Period pursuant to bankruptcy proceedings involving
the related Obligor; plus
(iv) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the prior Due Period with respect to
the Adjustable Rate Loans; plus
(v) any amount described in clauses (i) through (iv) above that was
not previously distributed because of an insufficient amount of funds
available in the Certificate Account; plus
(vi) on the Post-Funding Payment Date, any amount withdrawn from the
Pre-Funding Group II ARM Subaccount and deposited in the Certificate
Account; minus
(vii) the Group I ARM Formula Principal Distribution Amount.
"HUD" means the United States Department of Housing and Urban Development,
or any successor thereto.
"Independent" means, when used with respect to any specified Person, any
Person who (i) is in fact independent of the Originator, the Servicer and the
Seller, (ii) does not have any direct financial interest or any material
indirect financial interest in the Originator, the Servicer, the Seller or an
Affiliate of the Originator, the Servicer or the Seller, and (iii) is not
connected with the Originator, the Servicer or the Seller as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions. Whenever it is provided herein that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such opinion or
certificate shall state that the signatory has read this definition and is
Independent within the meaning set forth herein. "Initial Group I Adjustable
Rate Loan" means an Initial Loan that is a Group I Adjustable Rate Loan.
"Initial Group II Adjustable Rate Loan" means an Initial Loan that is a
Group II Adjustable Rate Loan.
"Initial Fixed Rate Loan" means an Initial Loan that is a Fixed Rate Loan.
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"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
$451,515,842.00.
"Interest Reset Period" means, with respect to any Payment Date, the period
from and including the prior Payment Date (or, with respect to the first Payment
Date, from and including the Closing Date) to but excluding such Payment Date.
"LIBOR" means, with respect to any Interest Reset Period, the offered rate,
as established by the Calculation Agent, for United States dollar deposits for
one month that appears on Telerate Page 3750 as of 11:00 A.M., London time, on
the LIBOR Determination Date for such Interest Reset Period. If on any LIBOR
Determination Date the offered rate does not appear on Telerate Page 3750, the
Calculation Agent will request each of the reference banks (which shall be major
banks that are engaged in transactions in the London interbank market selected
by the Calculation Agent) to provide the Trustee with its offered quotation for
United States dollar deposits for one month to prime banks in the London
interbank market as of 11:00 A.M., London time, on such date. If at least two
reference banks provide the Calculation Agent with such offered quotations,
LIBOR on such date will be the arithmetic mean, rounded upwards, if necessary,
to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a
percentage point rounded upward, of all such quotations. If on such date fewer
than two of the reference banks provide the Calculation Agent with such offered
quotations, LIBOR on such date will be the arithmetic mean, rounded upwards, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths
of a percentage point rounded upward, of the offered per annum rates that one or
more leading banks in the City of New York selected by the Calculation Agent are
quoting as of 11:00 A.M., New York City time, on such date to leading European
banks for United States dollar deposits for one month; provided, however, that
if such banks are not quoting as described above, LIBOR for such date will be
LIBOR applicable to the Interest Reset Period immediately preceding such
Interest Reset Period; and provided, further, that if the result of the
foregoing would be for three consecutive Payment Dates to base LIBOR on the rate
applicable in the immediately preceding Interest Reset Period, for such third
consecutive Payment Date the Calculation Agent shall instead select an
alternative comparable index (over which the Calculation Agent has no control)
used for determining one-month Eurodollar lending rates that is calculated and
published (or otherwise made available) by an independent third party.
"LIBOR Business Day" as used herein means a day that is both a Business Day
and a day on which banking institutions in the City of London, England are not
required or authorized by law to be closed.
"LIBOR Determination Date" means the second LIBOR Business Day prior to the
first day of the related Interest Reset Period.
"Liquidated Loan" means, with respect to any Due Period, either
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(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 September 2028, 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-1, L-2, or L-3
or to a Subsequent Transfer Instrument, as such lists may be amended from time
to time pursuant to Section 2.06 or Section 3.06(b) to add Eligible Substitute
Loans and delete Replaced Loans or Prepaid Loans, as the case may be. Each List
of Loans shall set forth as to each Loan identified on it (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 Fixed Rate Loan or Adjustable Rate Loan.
"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.
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"Loan Interest Rate" means, as to any Loan, the annual rate of interest
specified in the Loan.
"Master REMIC" means the segregated pool of assets consisting of the
Subsidiary REMIC Regular Interests, with respect to which a separate REMIC
election is to be made.
"Minimum Loan Rate" means as to any Adjustable Rate Loan, the minimum Loan
Interest Rate set forth in such 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 .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).
"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.
"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 $886,501,097.
"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 sum of the amounts deposited in the
Pre-Funding Account pursuant to Sections 2.02(l) and (m).
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"Original Principal Balance" means as to each Subsidiary REMIC Regular
Interest, the amount set forth with respect to such interest in Section 2.05(c).
"Over-Collateralization Amount" means, for any Payment Date,
(a) with respect to the Fixed Rate Certificates, the excess of (A) the
sum of the aggregate Scheduled Principal Balances of the Fixed Rate Loans
and the Pre-Funded Fixed Rate Amount over (B) the sum of (x) the Class
Principal Balances of the Fixed Rate Certificates and (y) the Class B-2
Principal Balance multiplied by a percentage obtained by dividing the
aggregate Scheduled Principal Balances of the Fixed Rate Loans by the Pool
Scheduled Principal Balance; and
(b) with respect to the Adjustable Rate Certificates, the excess of
(A) the sum of the aggregate Scheduled Principal Balances of the Adjustable
Rate Loans, the Pre-Funded Group I ARM Amount and the Pre-Funded Group II
ARM Amount over (B) the sum of (x) the Class Principal Balances of the
Adjustable Rate Certificates and (y) the Class B-2 Principal Balance
multiplied by a percentage obtained by dividing the aggregate Scheduled
Principal Balances of the Adjustable Rate Loans by the Pool Scheduled
Principal Balance.
"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 (i) with respect to each Class of Certificates,
the rate set forth for such Class in Section 2.05(b) and (ii) with respect to
each Subsidiary REMIC Regular Interest, the rate set forth for such interest in
Section 2.05(c).
"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 December 1999.
"Percentage Interest" means, as to any Certificate or the Class C
Certificates, 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 or, in the case of a Class A-IO Certificate, by the Class A-IO
Original Notional Principal Amount, 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, the Class C Master Certificates and
Class C Subsidiary Certificates shall equal 100%, respectively.
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"Permitted Transferee" means, in the case of a transfer of the Class C
Certificates, a Person that is not a Plan or a Disqualified Organization, except
as permitted by Sections 9.02(b)(2) and (3), respectively.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Pool Factor" means, at any time, the percentage derived from a fraction,
the numerator of which is the Aggregate Certificate Principal Balance at such
time and the denominator of which is the Original Aggregate Certificate
Principal Balance.
"Pool Scheduled Principal Balance" means, for any Payment Date, the
aggregate Scheduled Principal Balance for such Payment Date of all Loans that
were outstanding during the immediately preceding Due Period.
"Post-Funding Payment Date" means the Payment Date on, or the first Payment
Date after, the last day of the Pre-Funding Period.
"Pre-Funded Amount" means with respect to any date of determination, the
sum of the Pre-Funded Group I ARM Amount, the Pre-Funded Group II ARM Amount and
the Pre-Funded Fixed Rate Amount.
"Pre-Funded Fixed Rate Amount" means, with respect to any date of
determination, the amount then on deposit in the Pre-Funding Fixed Rate
Subaccount, after giving effect to any sale of Subsequent Fixed Rate Loans to
the Trust on such date.
"Pre-Funded Group I ARM Amount" means, with respect to any date of
determination, the amount then on deposit in the Pre-Funding Group I ARM
Subaccount, after giving effect to any sale of Subsequent Group I Adjustable
Rate Loans to the Trust on such date.
"Pre-Funded Group II ARM Amount" means, with respect to any date of
determination, the amount then on deposit in the Pre-Funding Group II ARM
Subaccount, after giving effect to any sale of Subsequent Group II Adjustable
Rate 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 Fixed Rate Subaccount" means the account so designated,
established and maintained pursuant to Section 8.08.
"Pre-Funding Group I ARM Subaccount" means the account so designated,
established and maintained pursuant to Section 8.08.
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"Pre-Funding Group II ARM Subaccount" 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
February 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.
"Prepayment Term" means the period ending February 15, 2004, after which no
Prepayment Charges are payable under the terms of any 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.
"Principal Prepayment in Full" means any Principal Prepayment of the entire
principal balance of a Loan.
"Rating Agencies" means S&P, Fitch 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).
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"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 Servicer),
and references herein to ratings by or requirements of S&P shall be deemed to
have the equivalent meanings with respect to ratings by or requirements of such
NRSRO.
"Scheduled Principal Balance" means, with respect to any Loan and any
Payment Date, the Cut-off Date or any Subsequent Cut-off Date, the principal
balance of such Loan as of the due date in the Due Period immediately preceding
such Payment Date, Cut-off Date or Subsequent Cut-off Date, as the case may be,
as specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any bankruptcy of an
Obligor or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to any previous Partial Principal Prepayments and to
the payment of principal due on such due date and irrespective of any
delinquency in payment by, or extension granted to, the related Obligor. If for
any Loan the Cut-off Date is the date of origination of the Loan, its Scheduled
Principal Balance as of the Cut-off Date is the principal balance of the Loan on
its date of origination.
"Senior Enhancement Percentage" means, for any Payment Date:
(a) with respect to the Fixed Rate Certificates, a fraction, expressed
as a percentage, (x) the numerator of which is the sum of (A) the Class
MF-1, Class MF-2 and Class BF-1 Adjusted Principal Balances, (B) the Class
B-2 Principal Balance multiplied by a percentage obtained by dividing the
aggregate Scheduled Principal
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Balances of the Fixed Rate Loans by the Pool Scheduled Principal Balance,
and (C) the Over-Collateralization Amount for the Fixed Rate Certificates
and (y) the denominator of which is the aggregate Scheduled Principal
Balances of the Fixed Rate Loans on such Payment Date; and
(b) with respect to the Adjustable Rate Certificates, a fraction,
expressed as a percentage, (x) the numerator of which is the sum of (A) the
Class MV-1, Class MV-2 and Class BV-1 Adjusted Principal Balances, (B) the
Class B-2 Principal Balance multiplied by a percentage obtained by dividing
the aggregate Scheduled Principal Balances of the Adjustable Rate Loans by
the Pool Scheduled Principal Balance, and (C) the Over-Collateralization
Amount for the Adjustable Rate Certificates and (y) the denominator of
which is the aggregate Scheduled Principal Balances of the Adjustable Rate
Loans on such Payment Date.
"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) with respect to the Fixed Rate Loans, a fraction, expressed as a
percentage, the numerator of which is the aggregate of the outstanding
balances of all Fixed Rate 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 aggregate Scheduled
Principal Balances of the Fixed Rate Loans for such Payment Date; and
(b) with respect to the Adjustable Rate Loans, a fraction, expressed
as a percentage, the numerator of which is the aggregate of the outstanding
balances of all Adjustable Rate 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 aggregate Scheduled
Principal Balances of the Adjustable Rate Loans for such Payment Date.
"Stepdown Date" means:
(a) with respect to the Fixed Rate Certificates, the earlier to occur
of:
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(i) the later to occur of (A) the Payment Date in December 2002
and (B) the first Payment Date on which the Class AF Principal Balance
is less than or equal to 62.76% of the aggregate Scheduled Principal
Balances of the Fixed Rate Loans and
(ii) the Payment Date on which the Class AF Principal Balance is
reduced to zero; and
(b) with respect to the Adjustable Rate Certificates, the earlier to
occur of
(i) the later to occur of (A) the Payment Date in December 2002
and (B) the first Payment Date on which the Class AV Principal Balance
is less than or equal to 56.42% of the aggregate Scheduled Principal
Balances of the Adjustable Rate Loans and
(ii) the Payment Date on which the Class AV Principal Balance is
reduced to zero.
"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 Fixed Rate Loan" means a Subsequent Loan that is a Fixed Rate
Loan.
"Subsequent Group I Adjustable Rate Loan" means a Subsequent Loan that is a
Group I Adjustable Rate Loan.
"Subsequent Group II Adjustable Rate Loan" means a Subsequent Loan that is
a Group II Adjustable Rate Loan.
"Subsequent Loan" means a Fixed Rate Loan, a Group I Adjustable Rate Loan
or a Group II Adjustable Rate Loan sold by the Seller to the Trust pursuant to
Section 2.03, such Loan being identified as such in the Subsequent Transfer
Instrument.
"Subsequent Transfer Date" means, with respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Loans are sold to the
Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer Instrument
dated as of a Subsequent Transfer Date executed by the Seller substantially in
the form of Exhibit O, by which the Seller sells Subsequent Loans to the Trust.
"Subsidiary REMIC" means the segregated pool of assets comprising the Trust
Fund, but excluding the Pre-Funding Account, the Capitalized Interest Account
and the Subsidiary REMIC Regular Interests.
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"Subsidiary REMIC Accrued Interest" means with respect to each Payment Date
and each Subsidiary REMIC Regular Interest, an amount equal to one month's
interest (or, with respect to the first Payment Date, interest accrued from and
including the Closing Date to but excluding December 15, 1999) on the related
Subsidiary REMIC Principal Balance at the related Subsidiary REMIC Pass-Through
Rate.
"Subsidiary REMIC Pass-Through Rate" means, with respect to a Subsidiary
REMIC Regular Interest, the applicable rates set forth in Section 2.05(c).
"Subsidiary REMIC Principal Balance" means with respect to each Subsidiary
REMIC Regular Interest on any date of determination, the related Original
Principal Balance minus the aggregate of all amounts previously deemed
distributed with respect to principal thereof pursuant to Section 8.09.
"Subsidiary REMIC Regular Interest Designation" means the designations set
forth in Section 2.05(c).
"Subsidiary REMIC Regular Interest Distribution Amounts" means the
Subsidiary REMIC Regular Interest S-1 Distribution Amount, Subsidiary REMIC
Regular Interest S-2 Distribution Amount, Subsidiary REMIC Regular Interest S-3
Distribution Amount and Subsidiary REMIC Regular Interest S-4 Distribution
Amount.
"Subsidiary REMIC Regular Interest S-1" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance and
bearing interest at the related Subsidiary REMIC Pass-Through Rate.
"Subsidiary REMIC Regular Interest S-1 Distribution Amount" means, with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-1 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interest S-2" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance and
bearing interest at the related Subsidiary REMIC Pass-Through Rate.
"Subsidiary REMIC Regular Interest S-2 Distribution Amount" means, with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-2 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interest S-3" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance and
bearing interest at the related Subsidiary REMIC Pass-Through Rate.
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"Subsidiary REMIC Regular Interest S-3 Distribution Amount" means, with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-3 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interest S-4" means an uncertificated partial
undivided beneficial ownership interest designated as a "regular interest" in
the Subsidiary REMIC having the related Subsidiary REMIC Principal Balance.
"Subsidiary REMIC Regular Interest S-4 Distribution Amount" means, with
respect to any Payment Date, the sum of the amounts deemed to be distributed on
the Subsidiary REMIC Regular Interest S-4 for such Payment Date pursuant to
Section 8.09.
"Subsidiary REMIC Regular Interests" means Subsidiary REMIC Regular
Interest S-1, Subsidiary REMIC Regular Interest S-2, Subsidiary REMIC Regular
Interest S-3, and Subsidiary REMIC Regular Interest S-4.
"Telerate Page 3750" means the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor by the
Calculation Agent, for the purpose of displaying London interbank offered rates
of major banks).
"Transfer Agreement" means that Transfer Agreement between Conseco Finance
Securitizations Corp., as purchaser, and Conseco Finance Corp., as seller, dated
as of November 1, 1999.
"Trigger Event" exists if:
(a) with respect to the Fixed Rate Certificates, (i) the Average
Sixty-Day Delinquency Ratio Test for the Fixed Rate Loans is not satisfied
or (ii) the Cumulative Realized Losses Test for the Fixed Rate Loans is not
satisfied; and
(b) with respect to the Adjustable Rate Certificates, (i) the Average
Sixty-Day Delinquency Ratio Test for the Adjustable Rate Loans is not
satisfied or (ii) the Cumulative Realized Losses Test for the Adjustable
Rate Loans is not satisfied.
"Trust" means Home Equity Loan Trust 1999-H.
"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 Cut-off Date, or Subsequent Cut-off
Date with respect to Subsequent Loans, (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
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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 B-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, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and Prudential Securities Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related Terms
Agreement, each dated November 17, 1999, among the Originator, the Seller and
the Underwriters.
"Unpaid Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Payment Date, the amount, if any, of the Class A 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
related Pass-Through Rate.
"Unpaid Class B-1 Interest Shortfall" means, with respect to each Class of
Class B-1 Certificates and any Payment Date, the amount, if any, of the Class
B-1 Interest Shortfall for 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 B-1 Liquidation Loss Interest Shortfall" means, with respect
to each Class of Class B-1 Certificates and any Payment Date, the amount, if
any, of the Class B-1 Liquidation Loss Interest Shortfall for 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 B-2 Interest Shortfall" means, with respect to the Class B-2
Certificates and any Payment Date, the amount, if any, of the Class B-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 B-2 Pass-Through
Rate.
"Unpaid Class M-1 Interest Shortfall" means, with respect to each Class of
Class M-1 Certificates and any Payment Date, the amount, if any, of the Class
M-1 Interest Shortfall for 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.
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"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, with respect
to each Class of Class M-1 Certificates and any Payment Date, the amount, if
any, of the Class M-1 Liquidation Loss Interest Shortfall for 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 M-2 Interest Shortfall" means, with respect to each Class of
Class M-2 Certificates and any Payment Date, the amount, if any, of the Class
M-2 Interest Shortfall for 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 M-2 Liquidation Loss Interest Shortfall" means, with respect
to each Class of Class M-2 Certificates and any Payment Date, the amount, if
any, of the Class M-2 Liquidation Loss Interest Shortfall for 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.
"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 Debt Consolidation Percentage" means the weighted
average, by Scheduled Principal Balance, of Loans, the proceeds of which were
used by the related Obligors for the purpose of debt consolidation.
"Weighted Average 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 AV-1, Class AV-2,
Class MV-1, Class MV-2, Class BV-1, Class AF-1, Class AF-2, Class AF-3, Class
AF-4, Class AF-5, Class AF-6, Class A-IO, Class MF-1, Class MF-2, Class BF-1 and
Class B-2 Pass-Through Rates, weighted on the basis of the respective Class
AV-1, Class AV-2, Class MV-1, Class MV-2, Class BV-1, Class AF-1, Class AF-2,
Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class A-IO, Class MF-1, Class
MF-2, Class BF-1 and Class B-2 Principal Balances (or the Class A-IO Notional
Principal Amount for the Class A-IO Certificates) immediately prior to such
Payment Date, plus (ii) if such Payment Date occurs prior to August 2001, a
rate, expressed as a percentage, equal to (A) one year's interest (or, if less,
interest for such number of months as remain prior to the Payment Date occurring
in August 2001) on the Class A-IO Notional Principal Amount at the Class A-IO
Pass-Through Rate, by (B) the Aggregate Certificate Principal Balance less the
Class P Principal Balance.
SECTION 1.03. Calculation of Interest on the Certificates and Subsidiary
REMIC Regular Interests. Interest on the Adjustable Rate Certificates shall be
computed on the basis of actual days elapsed in a year of 360 days. Interest on
each other Class of Certificates and each Subsidiary REMIC Regular Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.
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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 Home Equity Loan Trust 1999-H. The Trust shall be
administered pursuant to the provisions of this Agreement for the benefit of the
Certificateholders and the Class C Certificateholders.
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-2 hereto, all the right, title and
interest of the Seller in and to the Loans, including all rights to receive
payments on or with respect to the Loans due after the Cut-off Date, or
Subsequent Cut-off Date in respect of the Subsequent Loans, all rights of the
Seller under the Transfer Agreement and all other assets now or hereafter
included in the Trust Fund. The Seller concurrently hereby assigns without
recourse all the right, title and interest of the Seller in and to the
Subsidiary REMIC Regular Interests to the Trustee for the benefit of the
Certificateholders. 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) and in the Subsidiary REMIC Regular Interests
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 does hereby grant to the Trustee,
a perfected first-priority security interest in the Trust Fund and in the
Subsidiary REMIC Regular Interests, 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 Exhibits L-1, L-2,
and L-3, certified by the Chairman of the Board, President or any Vice
President of the Seller.
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b. A certificate of an officer of the Originator substantially in the
form of Exhibit E-1 and a certificate of an officer of the Seller
substantially in the form of Exhibit E-2 hereto.
c. An Opinion of Counsel for the Seller substantially in the form of
Exhibit F hereto.
d. A letter acceptable to the Underwriters from PricewaterhouseCoopers
LLP or another nationally recognized accounting firm, stating that such
firm has reviewed the Initial Loans 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 and of the
Originator under the laws of the State of Delaware.
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 and Additional Loans and an
Officer's Certificate confirming that the Originator has reviewed the
original or a copy of each Initial and Additional Loan 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. An assignment of the Loans from the Originator to the Seller, and
an assignment of the Loans from the Seller to the Trustee, substantially in
the form of Exhibits D-1 and D-2, respectively.
l. Evidence of the deposit of $56,064,848.72 in the Pre-Funding Group
I ARM Subaccount, $9,992,374.43 in the Pre-Funding Group II ARM Subaccount
and $103,016,591.46 in the Pre-Funding Fixed Rate Subaccount.
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m. Evidence of the deposit of $0.00 in the Capitalized Interest
Account.
n. Letters from each of the Rating Agencies evidencing ratings for the
Certificates as required by the prospectus supplement relating to the
Certificates.
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 Group I ARM Subaccount, the Pre-Funding Group II ARM
Subaccount and the Pre-Funding Fixed Rate Subaccount, 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 Certificateholders
to constitute and to be treated as a sale of the Subsequent Loans by the Seller
or the Originator to the Trust.
The purchase price paid by the Trustee shall be one hundred percent (100%)
of the aggregate Cut-off Date Principal Balances of such Subsequent Loans. The
purchase price of Subsequent Fixed Rate Loans shall be paid solely with amounts
in the Pre-Funding Fixed Rate Subaccount. The purchase price of Subsequent Group
I Adjustable Rate Loans shall be paid solely with amounts in the Pre-Funding
Group I ARM Subaccount. The purchase price of Subsequent Group II Adjustable
Rate Loans shall be paid solely with amounts in the Pre-Funding Group II ARM
Subaccount. 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 Group I ARM Subaccount, the
Pre-Funding Group II ARM Subaccount or the Pre-Funding Fixed Rate Subaccount, as
applicable, only upon the satisfaction of each of the following conditions on or
prior to the related Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee with an Addition Notice
at least five Business Days prior to the Subsequent Transfer Date and shall
have provided any information reasonably requested by the Trustee with
respect to the Subsequent Loans;
(ii) the Seller shall have delivered the related Loan File for each
Subsequent Loan to the Trustee at least two Business Days prior to the
Subsequent Transfer Date;
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(iii) the Seller shall have delivered to the Trustee a duly executed
Subsequent Transfer Instrument substantially in the form of Exhibit O,
which shall include a List of Loans identifying the related Subsequent
Loans;
(iv) as of each Subsequent Transfer Date, as evidenced by delivery of
the Subsequent Transfer Instrument, the Seller shall not be insolvent nor
shall it have been made insolvent by such transfer nor shall it be aware of
any pending insolvency;
(v) such sale and transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC and the Subsidiary
REMIC) or the Certificateholders or Class C Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an Officer's
Certificate, substantially in the form attached hereto as Exhibit P,
confirming the satisfaction of each condition precedent and the
representations specified in this Section 2.03 and in Sections 3.01 and
3.03;
(viii) the Seller and the Originator shall have delivered to the
Trustee Opinions of Counsel addressed to the Rating Agencies and the
Trustee with respect to the transfer of the Subsequent 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 to the Trustee a copy of the
executed Subsequent Transfer Agreement between the Originator and the
Seller, substantially in the form of Exhibit A to the Transfer Agreement
and dated as of the Subsequent Transfer Date.
c. Before the last day of the Pre-Funding Period, the Seller shall deliver
to the Trustee:
(i) A letter from PricewaterhouseCoopers LLP or another nationally
recognized accounting firm retained by the Seller (with copies provided to
the Rating Agencies, the Underwriters and the Trustee) that is in form,
substance and methodology the same as that delivered under Section 2.02(d)
of this Agreement, except that it shall address the Subsequent Loans and
their conformity in all material respects to the characteristics described
in Sections 2.03 (b)(ix) and 3.04(b) of this Agreement.
(ii) Evidence that, as a result of the purchase by the Trust of the
Subsequent Loans, none of the ratings assigned to the Class A Certificates
as of the Closing Date by the Rating Agencies will be reduced, withdrawn or
qualified.
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(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
Certificateholders. The Trustee acknowledges the assignment to it of the
Subsidiary REMIC Regular Interests and declares that it holds and will hold the
Subsidiary REMIC Regular Interests in trust for the exclusive use and benefit of
the Certificateholders. In consideration of the assignment to it of the
Subsidiary REMIC Regular Interests, the Trustee has issued on the Closing Date,
to or upon the order of the Seller, the Certificates and the Class C
Certificates representing, in the aggregate, ownership of the entire beneficial
interest in the Master REMIC.
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 Certificateholders, 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 that the segregated pools of assets comprising
the Master REMIC and the Subsidiary REMIC, respectively, each elect to be
treated as a REMIC under the Code for such taxable year and all subsequent
taxable years, and the Trustee shall sign such return. In furtherance of the
foregoing, the Trustee (at the direction of the Originator, the Seller or the
Servicer), the Originator, the Seller and the Servicer shall take, or refrain
from taking, all such action as is necessary to maintain the status of each of
the Master REMIC and Subsidiary REMIC as a REMIC under the REMIC Provisions of
the Code, including, but not limited to, the taking of such action as is
necessary to cure any inadvertent termination of REMIC status. For purposes of
the REMIC election in respect of the Subsidiary REMIC, (i) the Subsidiary REMIC
Regular Interests shall be designated as the "regular interests" in the
Subsidiary REMIC and (ii) the Class C Subsidiary Certificate shall be designated
as the sole class of "residual interests" in the Subsidiary REMIC. For purposes
of the REMIC election in respect of the Master REMIC, (i) the Certificates shall
be designated as the
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"regular interests" in the Master REMIC and (ii) the Class C Master Certificate
shall be designated as the sole Class of "residual interests" in the Master
REMIC. The Trustee shall not permit the creation of any "interests" in the
Master REMIC or Subsidiary REMIC (within the meaning of Section 860G of the
Code) other than the Subsidiary REMIC Regular Interests and the interests
represented by the Certificates and the Class C Certificates.
b. The Certificates are being issued in seventeen classes. The following
terms of the Certificates are irrevocably established as of the Closing Date:
Original Class
Principal
Balance (or
Notional
Principal
Class Pass-Through Rate Per Annum Amount)
- ----------- ---------------------------------------- ----------------
Class AV-1 a floating rate per annum equal to the $205,778,858
lesser of (a) one-month LIBOR plus
0.32%, or (b) the Available Funds
Pass-Through Rate, but in no case more
than 14.0%.
Class AV-2 a floating rate per annum equal to the $28,854,474
lesser of (a) one-month LIBOR plus
0.39%, or (b) the Available Funds
Pass-Through Rate, but in no case more
than 14.0%.
Class MV-1 a floating rate per annum equal to the $20,750,000
lesser of (a) one-month LIBOR plus
0.69%, or (b) the Available Funds
Pass-Through Rate, but in no case more
than 14.0%.
Class MV-2 a floating rate per annum equal to the $17,200,000
lesser of (a) one-month LIBOR plus
1.40%, or (b) the Available Funds
Pass-Through Rate, but in no case more
than 14.0%.
Class BV-1 a floating rate per annum equal to the $12,750,000
lesser of (a) one-month LIBOR plus
3.00%, or (b) the Available Funds
Pass-Through Rate, but in no case more
than 14.0%.
Class AF-1 6.45% $178,634,491
Class AF-2 6.84% $129,334,162
Class AF-3 7.03% $39,333,268
Class AF-4 7.32% $51,500,000
Class AF-5 7.60% before the Additional Principal $38,196,744
Entitlement Date; 8.10% from and after
the Additional Principal Entitlement
Date
Class AF-6 7.21% $51,268,000
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Class A-IO 7.00% Original
Notional
Principal
Amount:
$90,000,000
Class MF-1 8.10% $32,700,000
Class MF-2 a floating rate equal to the Adjusted $30,300,000
Weighted Average Loan Rate, but in no
event greater than 9.29%
Class BF-1 a floating rate equal to the Adjusted $19,400,000
Weighted Average Loan Rate, but in no
event greater than 10.00%
Class B-2 a floating rate equal to the Adjusted $30,500,003
Weighted Average Loan Rate, but in no
event greater than 10.00%
Class P None $100
c. The following terms of the Subsidiary REMIC Regular Interests are
irrevocably established as of the Closing Date:
Subsidiary REMIC Original Class
Regular Interest Principal
Designation: Subsidiary REMIC Pass-Through Rate: Balance:
---------------- ----------------------------------- --------------
S-1 Weighted Average Loan Rate $632,899,997
S-2 Weighted Average Loan Rate $90,000,000
S-3 Weighted Average Loan Rate $163,600,003
S-4 None $100
The latest possible maturity of the Subsidiary REMIC Regular Interests is in
December 15, 2030 (calculated using a prepayment assumption of 0% and assuming
no defaults or delinquencies on the Loans).
d. The Closing Date, which is the day on which each of the Master REMIC and
Subsidiary REMIC will issue all of their respective regular and residual
interests, is hereby designated as the "startup day" of the Master REMIC and
Subsidiary REMIC within the meaning of Section 860G(a)(9) of the Code.
e. After the Closing Date, neither the Trustee, the Originator, the Seller
nor any Servicer shall (i) accept any contribution of assets to the 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 any 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
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<PAGE>
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 Master REMIC or Subsidiary
REMIC as a REMIC, the status of the Certificates and Class C Master Certificate
as "regular interests" and the sole class of "residual interests," respectively,
in the Master REMIC, or of the Subsidiary REMIC Regular Interests or Class C
Subsidiary Certificate as the "regular interests" and the sole class of
"residual interests," respectively, in the Subsidiary REMIC, in each case for
federal income tax purposes, (B) affect the distributions payable hereunder to
the Certificateholders or the Class C Certificateholders or (C) result in the
imposition of any lien, charge or encumbrance upon the Trust.
f. Upon the acquisition of any real property (including interests in real
property), or any personal property incident thereto, in connection with the
default of a 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 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 Master REMIC or
Subsidiary REMIC to fail to qualify as a REMIC at any time that the Certificates
or Class C Certificates are outstanding. The Servicer shall manage, conserve,
protect and operate such real property, or any personal property incident
thereto, so that such property will not fail to qualify as "foreclosure
property," as defined in Section 860G(a)(8) of the Code, and that the
management, conservation, protection and operation of such property will not
result in the receipt by the Master REMIC or Subsidiary REMIC 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 February 28, 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;
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<PAGE>
(iv) the Seller shall have delivered to the Trustee the Loan to be
substituted and the related Loan File;
(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 February 14, 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 Master REMIC or Subsidiary REMIC to fail to
qualify as a REMIC at any time under then applicable REMIC Provisions or
cause any "prohibited transaction" that will result in the imposition of a
tax under such REMIC Provisions and (b) to the effect of paragraph 9 of
Exhibit F hereto; and
(vii) if the Principal Prepayment in Full received in respect of such
Prepaid Loan is greater than the Scheduled Principal Balance of the Loan to
be substituted, such excess shall be distributed to Certificateholders on
the related Payment Date as a prepayment of principal.
Upon satisfaction of such conditions, the Trustee shall add such Loan to be
substituted to the List of Loans.
Any substitutions pursuant to this Section 2.06 may be accomplished on a
loan-by-loan basis or on an aggregate basis as to all Prepaid Loans with respect
to a given calendar month.
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<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
Certificates 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 Certificateholders for a breach of a representation or warranty 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
Certificateholders, effective on the Closing Date and each Subsequent Transfer
Date, that:
a. Organization and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its
assets and to transact the business in which it is currently engaged. The
Seller is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or other) of the Seller.
b. Authorization; Binding Obligations. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all of
the transactions contemplated under this Agreement, and to create the Trust
and cause it to make, execute, deliver and perform its obligations under
this Agreement and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Agreement and to cause the
Trust to be created. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Seller
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies.
c. No Consent Required. The Seller is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
d. No Violations. The execution, delivery and performance of this
Agreement by the Seller will not violate any provision of any existing law
or regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of the
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<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 Certificates which, if adversely determined, would in the opinion of the
Seller have a material adverse effect on the transactions contemplated by
this Agreement.
f. Licensing. The Seller is duly 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 Certificateholders, as of the Closing Date with respect to each Loan
identified on the List of Loans attached to this Agreement as Exhibits L-1, L-2
and L-3 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 or as of the related Subsequent Cut-off
Date, if a Subsequent Loan.
c. Costs Paid and No Waivers. The terms of the Loan have not been
waived, altered or modified in any respect, except by instruments or
documents identified in the Loan File. All costs, fees and expenses
incurred in making, closing and perfecting the lien of the Loan have been
paid. The subject real property has not been released from the lien of such
Loan.
d. Binding Obligation. The Loan is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with
its terms, except as such enforceability may be limited by laws affecting
the enforcement of creditors' rights generally.
e. No Defenses. The Loan is not subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Loan or the exercise of any right
thereunder will not render the Loan unenforceable in whole or in part or
subject to any right of rescission, setoff,
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<PAGE>
counterclaim or defense, including the defense of usury, and no such right
of rescission, setoff, counterclaim or defense has been asserted with
respect thereto.
f. Insurance Coverage. The Originator has been named as an additional
insured party under any hazard insurance on the property described in the
Loan, to the extent required by the Originator's underwriting guidelines.
If upon origination of the Loan, the property securing the Loan was in an
area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and if flood insurance was required
by federal regulation and such flood insurance has been made available in
the locale where the property is located), the property is covered by a
flood insurance policy of the nature and in an amount which is consistent
with the servicing standard set forth in Section 5.02.
g. Combined LTV. The Combined LTV for the 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 Certificates 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, if a Fixed Rate Loan or Group II
Adjustable Rate Loan, constitutes a valid and perfected first, second or
third priority lien on the real estate described in such Loan.
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<PAGE>
l. Capacity of Parties. The signature(s) of the Obligor(s) on the Loan
are genuine and all parties to the Loan had full legal capacity to execute
the Loan.
m. Good Title. The Originator is the sole owner of the Loan and has
the authority to sell, transfer and assign such Loan to the Seller under
the terms of the Transfer Agreement. 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 Cut-off Date or Subsequent Cut-off Date, as
applicable, 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, unless it is an Adjustable Rate Loan,
has a fixed Loan Interest Rate and 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.
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<PAGE>
t. Underwriting Guidelines. Each Loan was originated or purchased in
accordance with the Originator's then-current underwriting guidelines.
u. Good Repair. The property described in the Loan is, to the best of
the Originator's knowledge, free of damage and in good repair.
v. Qualified Mortgage. The Loan represents 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. Interest Rate and Payment Amount Adjustments. With respect to each
Loan which does not provide for a fixed interest rate over the life of the
Loan, the Loan Interest Rate and monthly payment have been adjusted in
accordance with the terms of the Loan. All required notices of interest
rate and payment amount adjustments have been sent to the Obligor on a
timely basis and the computations of such adjustments were properly
calculated. All Loan Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Loan.
x. Adjustable Rate Loans. If an Adjustable Rate Loan, it is covered by
an American Land Title Association lender's title insurance policy, with an
adjustable rate mortgage endorsement, such endorsement substantially in the
form of ALTA Form 6.0 or 6.1. The applicable terms of the Adjustable Rate
Loan pertaining to adjustments of the Loan Interest Rate and the monthly
payment and payment adjustments in connection therewith are enforceable and
will not affect the priority of the lien of the related mortgage. The Loan
Interest Rate and monthly payment on the Adjustable Rate Loan have been
timely and appropriately adjusted, if such adjustment is required, and the
respective Obligor timely and appropriately advised.
y. Conforming Loans. If a Group I Adjustable Rate Loan, the Loan is
secured by a valid and perfected first priority lien on a single, two or
three family property in an original principal balance of not more than
$240,000, if a single family property, not more than $307,100, if a two
family property, and not more than $371,200 if a three family property
z. 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 Certificateholders, as of the Closing Date with respect to each
Loan identified on the List of Loans attached to this Agreement as Exhibits L-1,
L-2 and L-3 and as of each Subsequent
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<PAGE>
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 Certificates 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, which hypothecation terminates
upon sale of the Loan to the Trust. 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
Certificateholders, as of the Closing Date with respect to the Initial Loans and
Additional Loans, and as of each Subsequent Transfer Date with respect to the
related Subsequent Loans, that:
a. Amounts. As of the Closing Date, the sum of the Cut-off Date Pool
Principal Balance, plus the Original Pre-Funded Amount, equals at least the
Original Aggregate Certificate Principal Balance. By Cut-off Date Principal
Balance, the Initial Loans and the 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.
Fixed Rate Loans. The Fixed Rate Loans have the following
characteristics: (i) 100% are secured by a mortgage, deed of trust or
security deed on the related real estate; (ii) none has a remaining
maturity of more than 360 months; (iii) no Initial or Additional Fixed Rate
Loan has a final scheduled payment date later than December 2029 and no
such Subsequent Loan has a final scheduled payment date later than February
2030; and (iv) none of the Initial or Additional Fixed Rate Loans has a
Loan Interest Rate less than 6.95%.
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<PAGE>
The weighted average (by Scheduled Principal Balance) loan to value
ratio of the Fixed Rate Loans as of the Post-Funding Payment Date is not
more than 200 basis points more than such ratio with respect to the Initial
Fixed Rate Loans.
The weighted average (by Scheduled Principal Balance) of the Loan
Interest Rates of the Fixed Rate Loans as of the Post-Funding Payment Date
is not more than 5 basis points less than the weighted average of the Loan
Interest Rates of the Initial Fixed Rate Loans. No Subsequent Fixed Rate
Loan has a Loan Interest Rate less than 7.00%.
The percentage (by Scheduled Principal Balance) of the Fixed Rate
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 is not more than 300 basis points, 200 basis points, and 100 basis
points, respectively, more than the percentage of Initial Fixed Rate Loans
identified as "B," "C," and "D" credits.
Group I Adjustable Rate Loans. The Group I Adjustable Rate Loans have
the following characteristics: (i) 100% are secured by a mortgage, deed of
trust or security deed creating a first lien on the related real estate;
(ii) none has a remaining maturity of more than 360 months; (iii) no
Initial or Additional Group I Adjustable Rate Loan has a final scheduled
payment date later than December 2029 and no such Subsequent Loan has a
final scheduled payment date later than February 2030; (iv) the Loan
Interest Rate on each is subject to semiannual adjustment, after an initial
period of up to 56 months, to equal the sum of (A) the per annum rate equal
to the average of interbank offered rates for six-month U.S.
dollar-denominated deposits in the London market based on quotations of
major banks, as published in The Wall Street Journal, plus (B) a fixed
percentage amount specified in the related Loan (the "gross margin"),
provided that the Loan Interest Rate will not increase or decrease on any
adjustment date by more than 7.0% per annum and will not exceed a maximum
rate specified in the related Loan; (v) none has a gross margin of less
than 2.0% or more than 10.5%; (vi) none had a principal balance at
origination of more than $240,000; and (vii) none of the Initial or
Additional Group I Adjustable Rate Loans has a Loan Interest Rate less than
6.99%.
None of the Initial or Additional Group I Adjustable Rate Loans has a
Minimum Loan Rate of less than 5.25%. No Subsequent Group I Adjustable Rate
Loan has a Minimum Loan Rate of less than 5.25%.
The weighted average (by Scheduled Principal Balance) loan to value
ratio of the Group I Adjustable Rate Loans as of the Post-Funding Payment
Date is not more than 200 basis points more than such ratio with respect to
the Initial Group I Adjustable Rate Loans.
The weighted average (by Scheduled Principal Balance) of the Loan
Interest Rates of the Group I Adjustable Rate Loans as of the Post-Funding
Payment Date is not more than 5 basis points less than the weighted average
of the Loan Interest Rates of the Initial Group I Adjustable Rate Loans.
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The percentage (by Scheduled Principal Balance) of the Group I
Adjustable Rate 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 is not more than 300 basis points, 200 basis
points, and 100 basis points, respectively, more than the percentage of
Initial Group I Adjustable Rate Loans identified as "B," "C," and "D"
credits.
All Loans. 86.56% (by Scheduled Principal Balance) of the Initial
Loans are secured by a first priority lien, 13.26% by a second priority
lien and 0.18% 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 14.26% and not more than 1.18% are secured by a third priority
lien.
The Weighted Average Debt Consolidation Percentage as of the Closing
Date is 22.08%. As of the Post-Funding Payment Date, the Weighted Average
Debt Consolidation Percentage is not more than 24.08%.
No Subsequent Loan is an FHA-Insured Loan.
Group II Adjustable Rate Loans. The Group II Adjustable Rate Loans
have the following characteristics: (i) 100% are secured by a mortgage,
deed of trust or security deed on the related real estate; (ii) none has a
remaining maturity of more than 360 months; (iii) no Initial or Additional
Group II Adjustable Rate Loan has a final scheduled payment date later than
December 2029 and no such Subsequent Loan has a final scheduled payment
date later than February 2030; (iv) the Loan Interest Rate on each is
subject to semiannual adjustment, after an initial period of up to 56
months, to equal the sum of (A) the per annum rate equal to the average of
interbank offered rates for six-month U.S. dollar-denominated deposits in
the London market based on quotations of major banks, as published in The
Wall Street Journal, plus (B) a fixed percentage amount specified in the
related Loan (the "gross margin"), provided that the Loan Interest Rate
will not increase or decrease on any adjustment date by more than 7.0% per
annum and will not exceed a maximum rate specified in the related Loan; (v)
none has a gross margin of less than 2.0% or more than 10.0%; and (vi) none
of the Initial Group II Adjustable Rate Loans has a Loan Interest Rate less
than 7.875%.
None of the Initial or Additional Group II Adjustable Rate Loans has a
Minimum Loan Rate of less than 7.875%. None of the Subsequent Group II
Adjustable Rate Loans has a Minimum Loan Rate of less than 7.875%.
The weighted average (by Scheduled Principal Balance) loan to value
ratio of the Group II Adjustable Rate Loans as of the Post-Funding Payment
Date is not more than 200 basis points more than such ratio with respect to
the Initial Group II Adjustable Rate Loans.
The weighted average (by Scheduled Principal Balance) of the Loan
Interest Rates of the Group II Adjustable Rate Loans as of the Post-Funding
Payment Date will not be
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more than 25 basis points less than the weighted average of the Loan
Interest Rates of the Initial Group II Adjustable Rate Loans.
The percentage (by Scheduled Principal Balance) of the Group II
Adjustable Rate 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 Group II Adjustable Rate Loans identified as "B," "C," and "D"
credits.
c. Geographic Concentrations.
Fixed Rate Loans. By Cut-off Date Principal Balance, 8.92% of the
Initial and Additional Fixed Rate Loans are secured by property located in
California, 6.22% in Ohio, 6.11% in Michigan and 6.00% in Florida. No other
state represents more than 5% of the aggregate Cut-off Date Principal
Balances of the Initial and Additional Group I Fixed Rate Loans.
No more than 1% of the Fixed Rate Loans by Cut-off Date Principal
Balance are secured by property located in an area with the same five-digit
zip code.
Group I Adjustable Rate Loans. By Cut-off Date Principal Balance,
8.88% of the Initial and Additional Group I Adjustable Rate Loans are
secured by property located in Ohio, 6.71% in Michigan, 6.69% in
California, 5.62% in Illinois, 5.43% in Washington, 5.28% in Colorado and
5.05% in North Carolina. No other state represents more than 5% of the
aggregate Cut-off Date Principal Balances of the Initial and Additional
Group I Adjustable Rate Loans.
No more than 1% of the Group I Adjustable Rate Loans by Cut-off Date
Principal Balance are secured by property located in an area with the same
five-digit zip code.
Group II Adjustable Rate Loans. By Cut-off Date Principal Balance,
27.63% of the Initial and Additional Group II Adjustable Rate Loans are
secured by property located in California, 9.32% in Maryland, 7.85% in
Virginia, 7.36% in Colorado, 5.69% in Washington, 5.15% in Georgia and
5.12% in Texas. No other state represents more than 5% of the aggregate
Cut-off Date Principal Balances of the Initial and Additional Group II
Adjustable Rate Loans.
No more than 1% of the Group II Adjustable Rate 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
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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).
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
Certificateholders that:
a. Possession. On the Closing Date, the Trustee or a Custodian will
have possession of each original Initial Loan and Additional Loan and the
related Loan File. On each Subsequent Transfer Date, the Originator will
have possession of each original Subsequent Loan being transferred to the
Trust on that Subsequent Transfer Date and the related Loan File. There are
and there will be no custodial agreements or servicing contracts in effect
materially and adversely affecting the rights of the Originator to make, or
cause to be made, any delivery required hereunder or under the Transfer
Agreement.
b. Bulk Transfer Laws. The transfer, assignment and conveyance of the
Loans and the Loan Files by the Originator pursuant to the Transfer
Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
SECTION 3.06. Repurchases of Loans for Breach of Representations and
Warranties.
a. Subject to Section 3.07, the Originator shall repurchase a Loan, at its
Repurchase Price, not later than 90 days after the day on which the Originator,
the Servicer, the Seller or the Trustee first discovers or should have
discovered a breach of a representation or warranty set forth in Sections 2.03,
3.02, 3.03, 3.04 or 3.05, or in the Officer's Certificates delivered pursuant to
Sections 2.02(j) or 2.03(b)(vii), that materially and adversely affects the
Trust's, the Certificateholders' or the Class C Certificateholders' 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 Certificateholders on
the immediately following Payment Date as a collection of principal or interest
on such Loan, according to the nature of the
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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 Master REMIC or Subsidiary REMIC to fail
to qualify as a REMIC at any time under then applicable REMIC Provisions or
cause any "prohibited transaction" that will result in the imposition of a
tax under such REMIC Provisions and (b) to the effect of paragraph 9 of
Exhibit F hereto; and
(vi) if the 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 each of the Rating Agencies.
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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 Certificateholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of 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 Master REMIC or Subsidiary REMIC 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), the Originator shall, notwithstanding the absence of such
opinion as to the imposition of any tax as the result of such purchase or
deposit, repurchase such Loan or make such deposit and shall guarantee the
payment of such tax by paying to the Trustee the amount of such tax not later
than five Business Days before such tax shall be due and payable to the extent
that amounts previously paid over to and then held by the Trustee pursuant to
Section 6.06 are insufficient to pay such tax and all other taxes chargeable
under Section 6.06. Pursuant to Section 6.06, the Servicer is hereby directed to
withhold, and shall withhold and pay over to the Trustee, an amount sufficient
to pay such tax and any other taxes imposed on "prohibited transactions" under
Section 860F(a)(i) of the Code or imposed on "contributions after startup date"
under Section 860G(d) of the Code from amounts otherwise distributable to the
Class C Certificateholders. The Servicer shall give notice to the Trustee at the
time of such repurchase of the amounts due from the Originator pursuant to the
guarantee of the Originator described above and 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.
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In the event any tax that is guaranteed by the Originator pursuant to this
Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
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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 each of S&P, Fitch (if
rated by Fitch) 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 each of the Rating Agencies
that the ratings of the Certificates would not be reduced or withdrawn by the
failure to execute and file such assignments; provided, 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).
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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.
The Servicer shall, with respect to each Loan which does not provide for a
fixed interest rate over the life of the Loan, make adjustments to the interest
rate and the payments due on such Loan in compliance with applicable regulatory
adjustable mortgage loan requirements and the terms of the Loan. The Servicer
shall establish procedures to monitor the interest rate adjustment dates and the
interest rate in order to assure that it correctly calculates any applicable
interest rate change, and it will comply with those procedures. The Servicer
shall execute and deliver all appropriate notices required by the applicable
adjustable mortgage loan laws and regulations and the Loans regarding such
interest rate adjustments and payment adjustments.
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
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Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination the Trustee may make, the
Trustee may, using generally accepted audit procedures, verify the status of
each Loan and review the Electronic Ledger and records relating thereto for
conformity to Monthly Reports prepared pursuant to Article VI and compliance
with the standards represented to exist as to each Loan in this Agreement.
b. At all times during the term hereof, the Servicer shall keep available a
copy of the List of Loans at its principal executive office for inspection by
Certificateholders.
c. A Certificateholder holding Certificates representing in the aggregate
at least 5% of the Aggregate Certificate Principal Balance shall have the rights
of inspection afforded to the Trustee pursuant to this Section 5.04.
SECTION 5.05. Certificate Account.
a. On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which shall be an Eligible Account.
The Servicer shall pay into the Certificate Account, as promptly as practicable
(but not later than the next Business Day) following receipt thereof, all
amounts received with respect to the Loans, 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 Certificateholders until payment of any such amounts is
authorized under this Agreement. Only the Trustee may withdraw funds from the
Certificate Account.
b. If the Servicer so directs, the institution maintaining the Certificate
Account shall, in the name of the Trustee in its capacity as such, invest the
amounts in the Certificate Account in Eligible Investments that mature not later
than one Business Day prior to the next succeeding 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
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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). Losses, if any, realized on amounts in the Certificate Account invested
pursuant to this paragraph shall first be credited against undistributed
investment earnings on amounts in the Certificate Account invested pursuant to
this paragraph, and shall thereafter be deemed to reduce the amount on deposit
in the Certificate Account and otherwise available for distribution to
Certificateholders and the Class C Certificateholders pursuant to Section 8.01.
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, F-1+ by Fitch (if rated by Fitch) 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 each of the Rating Agencies, 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;
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(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 at the time of such investment has 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, at
least F-1+ from Fitch (if rated by Fitch) 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
(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.
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
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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 Certificateholders. 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, 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 Certificateholders.
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
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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 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 Certificateholders' 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.
If the Servicer fails to make a timely interest rate or monthly payment
adjustment on a Loan which does not provide for a fixed interest rate over the
life of the Loan, the Servicer shall use its own funds to satisfy any shortage
in the Obligor's remittance so long as such shortage
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shall continue; any such amount paid by the Servicer shall be reimbursable to it
from any subsequent amounts collected on account of the related Loan with
respect to such adjustments.
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.
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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, 2000, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to issue to the Servicer a report that such firm
has examined selected documents, records and management's assertions relating to
loans serviced by the Servicer and stating that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers, or any successor
uniform program, except for such significant exceptions or errors in records
that, in the opinion of such firm, generally accepted attestation standards
requires it to report.
SECTION 6.05. Statements to Certificateholders and the Class C
Certificateholders.
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class A Certificates, the Class M Certificates,
the Class B 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 A Certificate and (if
the Originator is not the Servicer) the Originator a statement setting forth the
following:
(i) the amount of such distribution to Holders of each Class of Class
A Certificates allocable to interest, separately identifying any Unpaid
Class A Interest Shortfall included in such distribution and any remaining
Unpaid Class A Interest Shortfall after giving effect to such distribution;
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(ii) the amount of such distribution to Holders of each Class of Class
A Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class A Formula Distribution
Amount for such Payment Date exceeds the Class A Distribution Amount for
such Payment Date;
(iv) the Class Principal Balance of each Class of Class A Certificates
and the Class A-IO Notional Principal Amount after giving effect to the
distribution of principal on such Payment Date;
(v) the Pool Scheduled Principal Balance, and of that amount the
aggregate Scheduled Principal Balances of the Adjustable Rate Loans and the
Fixed Rate Loans, for such Payment Date;
(vi) Senior Enhancement Percentage for the Fixed Rate Certificates and
the Adjustable Rate Certificates, respectively, and whether or not a
Trigger Event exists;
(vii) the Pool Factor;
(viii) the number and aggregate principal balances of Loans,
identifying separately the Adjustable Rate Loans and the Fixed Rate Loans,
delinquent (a) 30-59 days and (b) 60 or more days;
(ix) Average Sixty-Day Delinquency Ratio Test for the Fixed Rate Loans
and for the Adjustable Rate Loans (as set forth in Exhibit M hereto);
(x) Cumulative Realized Losses Test for the Fixed Rate Loans and for
the Adjustable Rate Loans (as set forth in Exhibit M hereto);
(xi) the number of Liquidated Loans, identifying such Loans (including
those which are Adjustable Rate Loans and those which are Fixed Rate Loans)
and the Net Liquidation Loss on such Loans; and
(xii) the Pre-Funded Group I ARM Amount, the Pre-Funded Group II ARM
Amount and the Pre-Funded Fixed Rate 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 A Certificate
with a 1% Percentage Interest or per $1,000 denomination of Class A Certificate.
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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 A Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Class A 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 M-1 Certificate a copy of the monthly
statement forwarded to the Holders of Class A Certificates on such Payment Date.
The Servicer shall also furnish to the Trustee, which shall forward such
information to the Class M-1 Certificateholders as part of their monthly
statement, the following information:
(i) the amount of such distribution to Holders of Class M-1
Certificates allocable to interest, separately identifying with respect to
each Class of Class M-1 Certificates any Unpaid Class M-1 Interest
Shortfall included in such distribution and any remaining Unpaid Class M-1
Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class M-1
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(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 and the amount, if any, by which the Class MV-1 Formula
Distribution Amount for such Payment Date exceeds the Class MV-1
Distribution Amount for such Payment Date;
(iv) the Class MF-1 Principal Balance and the Class MV-1 Principal
Balance after giving effect to the distribution of principal on such
Payment Date;
(v) the Unpaid Class M-1 Liquidation Loss Interest Shortfall with
respect to each Class of M-1 Certificates 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 M-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class M-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
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of a Class M-1 Certificate a statement containing the applicable distribution
information provided pursuant to this Section aggregated for such calendar year
or applicable portion thereof during which such Person was the Holder of a Class
M-1 Certificate. Such obligation of the 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.
d. On each Payment Date, the Trustee shall forward or cause to be forwarded
by mail to each Holder of a Class M-2 Certificate a copy of the monthly
statements forwarded to the Holders of Class A and Class M-1 Certificates on
such Payment Date. The Servicer shall also furnish to the Trustee, which shall
forward such information to the Class M-2 Certificateholders as part of their
monthly statement, the following information:
(i) the amount of such distribution to Holders of Class M-2
Certificates allocable to interest, separately identifying with respect to
each Class of Class M-2 Certificates any Unpaid Class M-2 Interest
Shortfall included in such distribution and any remaining Unpaid Class M-2
Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class M-2
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(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; and the amount, if any, by which the Class MV-2 Formula
Distribution Amount for such Payment Date exceeds the Class MV-2
Distribution Amount for such Payment Date;
(iv) the Class MF-2 Principal Balance and the Class MV-2 Principal
Balance after giving effect to the distribution of principal on such
Payment Date;
(v) the Unpaid Class M-2 Liquidation Loss Interest Shortfall with
respect to each Class of Class M-2 Certificates 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 M-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class M-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 M-2 Certificate a statement
containing the applicable distribution information
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provided pursuant to this Section aggregated for such calendar year or
applicable portion thereof during which such Person was the Holder of a Class
M-2 Certificate. Such obligation of the 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 B-1 Certificate a copy of the monthly
statements forwarded to the Holders of Class A and Class M Certificates on such
Payment Date. The Servicer shall also furnish to the Trustee, which shall
forward such information to the Class B-1 Certificateholders as part of their
monthly statement, the following information:
(i) the amount of such distribution to Holders of Class B-1
Certificates allocable to interest, separately identifying with respect to
each Class of Class B-1 Certificates any Unpaid Class B-1 Interest
Shortfall included in such distribution and any remaining Unpaid Class B-1
Interest Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class B-1
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(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; and the amount, if any, by which the Class BV-1 Formula
Distribution Amount for such Payment Date exceeds the Class BV-1
Distribution Amount for such Payment Date;
(iv) the Class BF-1 Principal Balance, and the Class BV-1 Principal
Balance after giving effect to the distribution of principal on such
Payment Date;
(v) the Unpaid Class B-1 Liquidation Loss Interest Shortfall with
respect to each Class of Class B-1 Certificates 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 B-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class B-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 B-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-1 Certificate. Such obligation of
the
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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 B-2 Certificate a copy of the monthly
statements forwarded to the Holders of Class A, Class M and Class B-1
Certificates on such Payment Date. The Servicer shall also furnish to the
Trustee, which shall forward such information to the Class B-2
Certificateholders as part of their monthly statement, the following
information:
(i) the amount of such distribution to Holders of Class B-2
Certificates allocable to interest, separately identifying any Unpaid Class
B-2 Interest Shortfall included in such distribution and any remaining
Unpaid Class B-2 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-2
Certificates allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the sum of the Class B-2 Formula
Distribution Amount and the Class B-2 Liquidation Loss Principal Amount, if
any, for such Payment Date exceeds the Class B-2 Distribution Amount for
such Payment Date;
(iv) the Class B-2 Principal Balance after giving effect to the
distribution of principal on such Payment Date;
(v) the Class B-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 B-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class B-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 B-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-2 Certificate. Such obligation of
the 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
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Holders of Class A, Class M and Class B 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
(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
Certificateholders.
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 Certificates. 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 Certificates, by
acceptance thereof, agrees to file tax returns consistent with and in accordance
with any elections, decisions or other reports made or filed with regard to
federal, state or local taxes on behalf of the 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
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Certificates, 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 Master Certificateholders and Class C Subsidiary
Certificateholders 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 Master REMIC or
Subsidiary REMIC, respectively, as a REMIC or otherwise and shall, to the extent
provided in Section 10.06, be entitled to be reimbursed out of the Certificate
Account or, if such tax or charge results from a failure by the Trustee, the
Originator or any Servicer to comply with the provisions of Section 2.04 or
3.07, or a failure by any Servicer to comply with the provisions of this Section
6.06, the Trustee, the Originator or such Servicer, as the case may be, shall
indemnify the Class C Certificateholders for the payment of any such tax or
charge. The Trustee shall be entitled to withhold from amounts otherwise
distributable to the Class C Certificateholders any taxes or charges payable by
the Class C Certificateholders hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the 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.
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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 by the Servicer of its duties or rights hereunder
except as specifically permitted hereunder, or any attempt to make such an
assignment;
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, the servicing rights of
Conseco Finance Corp. 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
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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.
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SECTION 7.04. Notification to Certificateholders and Class C
Certificateholders.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to each of the Rating
Agencies, to the Certificateholders and to the Class C Certificateholders 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 each of the Rating Agencies, to the Certificateholders and to
the Class C Certificateholders 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 Certificateholders 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.
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ARTICLE VIII
PAYMENTS
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a Certificate
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 AV-1 Distribution Amount, the Class AV-2
Distribution Amount, the Class MV-1 Distribution Amount, the Class MV-2
Distribution Amount, the Class BV-1 Distribution Amount, the Class AF-1
Distribution Amount, the Class AF-2 Distribution Amount, the Class AF-3
Distribution Amount, the Class AF-4 Distribution Amount, the Class AF-5
Distribution Amount, the Class AF-6 Distribution Amount, the Class A-IO
Distribution Amount, the Class MF-1 Distribution Amount, the Class MF-2
Distribution Amount, the Class BF-1 Distribution Amount, the Class B-2
Distribution Amount, any Class B-2 Guaranty Payment, the Class P Distribution
Amount and the Class C Master Distribution Amount, as applicable. Final payment
of any Certificate or a 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 Certificates 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 Certificateholders
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
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amounts held by the Paying Agent for payment hereunder will be held in trust for
the benefit of the Certificateholders and the Class C Certificateholders and
that it will notify the Trustee of any failure by the Servicer to make funds
available to the Paying Agent for the payment of amounts due on the Certificates
and the Class C Certificates.
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 B-2 Limited Guaranty.
(i) No later than the Determination Date, the Servicer (if other than the
Guarantor) shall notify the Guarantor of the amount of the Class B-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 B-2 Guaranty
Payment, if any, for such Payment Date into the Certificate Account. Any Class
B-2 Guaranty Payment shall be distributable to Class B-2 Certificateholders
pursuant to Section 8.01.
(ii) 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.
(iii) The obligation of the Guarantor to provide the Class B-2 Limited
Guaranty under this Agreement shall terminate on the Final Payment Date.
(iv) The obligation of the Guarantor to make the Class B-2 Guaranty
Payments described in subsection (i) above shall be unconditional and
irrevocable. The Guarantor acknowledges that its obligation to make the Class
B-2 Guaranty Payments described in subsection (i) above shall be deemed a
guaranty by the Guarantor of indebtedness of the Trust for money borrowed from
the Class B-2 Certificateholders.
(v) If the Guarantor fails to make a Class B-2 Guaranty Payment in whole or
in part, the Guarantor shall promptly notify the Trustee, and the Trustee shall
promptly notify the Rating Agencies.
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(vi) In consideration of providing the Class B-2 Limited Guaranty, the
Guarantor shall be entitled to the Class B-2 Guaranty Fee payable in accordance
with Section 8.04(b)(19).
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, less any Prepayment Charges included in the Amount Available,
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, with respect to the Loans, the
Monthly Servicing Fee and any other compensation owed to the Servicer
pursuant to Section 7.03;
(2) to pay the Class A Formula Interest Distribution Amount to the
Class A Certificateholders as follows:
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(i) the amount in clause (a)(1) of the definition of Class A
Formula Distribution Amount to the Class AV-1 Certificateholders; the
amount in clause (a)(2), to the Class AV-2 Certificateholders; the
amount in clause (a)(3), to the Class AF-1 Certificateholders; the
amount in clause (a)(4), to the Class AF-2 Certificateholders; the
amount in clause (a)(5), to the Class AF-3 Certificateholders; the
amount in clause (a)(6), to the Class AF-4 Certificateholders; the
amount in clause (a)(7), to the Class AF-5 Certificateholders; the
amount in clause (a)(8), to the Class AF-6 Certificateholders; and the
amount in clause (a)(9), to the Class A-IO Certificateholders; or, if
the Amount Available is less than the amount necessary to pay all
Class A Formula Interest Distribution Amounts, to each Class of Class
A Certificates pro rata in accordance with its respective entitlement
to interest; and
(ii) to each Class of Class A Certificates the amount, if any, of
the Unpaid Class A Interest Shortfall of such Class or, if the
remaining Amount Available is less than the amount necessary to pay
all Unpaid Class A Interest Shortfalls, pro rata to each Class of
Class A Certificates based on the Unpaid Class A Interest Shortfall of
each such Class;
(3) after payment of the amounts specified in clauses (1) and (2)
above, to the Class M-1 Certificateholders as follows:
(i) the amount in clause (a)(1) of the definition of Class M-1
Formula Distribution Amount to the Class MF-1 Certificateholders and
the amount in clause (a)(2) to the Class MV-1 Certificateholders; or,
if the remaining Amount Available is less than the amount necessary to
pay all Class M-1 Formula Interest Distribution Amounts, to each Class
of Class M-1 Certificates pro rata in accordance with its respective
entitlement to interest; and
(ii) to each Class of Class M-1 Certificates the amount, if any,
of the Unpaid Class M-1 Interest Shortfall of such Class or, if the
remaining Amount Available is less than the amount necessary to pay
all Unpaid Class M-1 Interest Shortfalls, pro rata to each Class of
Class M-1 Certificates based on the Unpaid Class M-1 Interest
Shortfall of each such Class;
(4) after payment of the amounts specified in clauses (1) through (3)
above, to the Class M-2 Certificateholders as follows:
(i) the amount in clause (a)(1) of the definition of Class M-2
Formula Distribution Amount to the Class MF-2 Certificateholders and
the amount in clause (a)(2) to the Class MV-2 Certificateholders; or,
if the remaining Amount Available is less than the amount necessary to
pay all Class M-2 Formula Interest Distribution Amounts, to each Class
of Class M-2 Certificates pro rata in accordance with its respective
entitlement to interest; and
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(ii) to each Class of Class M-2 Certificates the amount, if any,
of the Unpaid Class M-2 Interest Shortfall of such Class or, if the
remaining Amount Available is less than the amount necessary to pay
all Unpaid Class M-2 Interest Shortfalls, pro rata to each Class of
Class M-2 Certificates based on the Unpaid Class M-2 Interest
Shortfall of each such Class;
(5) after payment of the amounts specified in clauses (1) through (4)
above, to the Class B-1 Certificateholders as follows:
(i) the amount in clause (a)(1) of the definition of Class B-1
Formula Distribution Amount to the Class BF-1 Certificateholders and
the amount in clause (a)(2) the Class BV-1 Certificateholders; or, if
the remaining Amount Available is less than the amount necessary to
pay all Class B-1 Formula Interest Distribution Amounts, to each Class
of Class B-1 Certificates pro rata in accordance with its respective
entitlement to interest; and
(ii) to each Class of Class B-1 Certificates the amount, if any,
of the Unpaid Class B-1 Interest Shortfall of such Class or, if the
remaining Amount Available is less than the amount necessary to pay
all Unpaid Class B-1 Interest Shortfalls, pro rata to each Class of
Class B-1 Certificates based on the Unpaid Class B-1 Interest
Shortfall of each such Class;
(6) after payment of the amounts specified in clauses (1) through (5)
above, to pay principal in respect of the Class A Certificates as follows:
(i) if there is a Class A Principal Deficiency Amount for such
Payment Date, the remaining Amount Available pro rata to each Class of
Class A Certificates based on the Class Principal Balance of each
Class; and
(ii) if there is no Class A Principal Deficiency Amount for such
Payment Date, the remaining Amount Available up to the Class A Formula
Principal Distribution Amount as follows:
(A) if the remaining Amount Available is less than the Class
A Formula Principal Distribution Amount, then pro rata to each
Class of Class A Certificates based upon the amounts that would
have been distributed pursuant to clause (B), below, had the
remaining Amount Available been equal to the Class A Formula
Principal Distribution Amount;
(B) if the remaining Amount Available is not less than the
Class A Formula Principal Distribution Amount, then
(a) to the Class AV-1 Certificateholders, the Class
AV-1 Formula Principal Distribution Amount, and to the Class
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AV-2 Certificateholders, the Class AV-2 Formula Principal
Distribution Amount;
(b) to the Class AF-6 Certificateholders, the Class
AF-6 Lockout Principal Distribution Amount, if any;
(c) 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;
(d) 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;
(e) 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;
(f) 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; and
(g) 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
(h) 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 M-1 Certificateholders, as follows:
(i) if the remaining Amount Available is less than the Class M-1
Formula Principal Distribution Amount, pro rata to the Class MF-1 and
Class MV-1 Certificates based on the amounts that would have been
distributed pursuant to clause (ii) below, had the remaining Amount
Available been equal to the Class M-1 Formula Principal Distribution
Amount;
(ii) if the remaining Amount Available is not less than the Class
M-1 Formula Principal Distribution Amount, then to the Class MF-1
Certificate-
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holders the Class MF-1 Formula Principal Distribution Amount and to
the Class MV-1 Certificateholders the Class MV-1 Formula Principal
Distribution Amount.
(8) after payment of the amounts specified in clauses (1) through (7)
above, to the Class M-2 Certificateholders, as follows:
(i) if the remaining Amount Available is less than the Class M-2
Formula Principal Distribution Amount, pro rata to the Class MF-2 and
Class MV-2 Certificates based on the amounts that would have been
distributed pursuant to clause (ii) below, had the remaining Amount
Available been equal to the Class M-2 Formula Principal Distribution
Amount;
(ii) if the remaining Amount Available is not less than the Class
M-2 Formula Principal Distribution Amount, then to the Class MF-2
Certificateholders the Class MF-2 Formula Principal Distribution
Amount and to the Class MV-2 Certificateholders the Class MV-2 Formula
Principal Distribution Amount.
(9) after payment of the amounts specified in clauses (1) through (8)
above, to the Class B-1 Certificateholders, as follows:
(i) if the remaining Amount Available is less than the Class B-1
Formula Principal Distribution Amount, pro rata to the Class BF-1 and
Class BV-1 Certificates based on the amounts that would have been
distributed pursuant to clause (ii) below, had the remaining Amount
Available been equal to the Class B-1 Formula Principal Distribution
Amount;
(ii) if the remaining Amount Available is not less than the Class
B-1 Formula Principal Distribution Amount then to the Class BF-1
Certificateholders the Class BF-1 Formula Principal Distribution
Amount and to the Class MB-1 Certificateholders the Class BV-1 Formula
Principal Distribution Amount.
(10) after payment of the amounts specified in clauses (1) through (9)
above, to the Class M-1 Certificateholders as follows:
(i) any Class M-1 Liquidation Loss Interest Amount and, if the
remaining Amount Available is insufficient to make such payment in
full, then pro rata to the Class MF-1 and Class MV-1
Certificateholders based upon their respective entitlements; and
(ii) any Unpaid Class M-1 Liquidation Loss Interest Shortfall
and, if the remaining Amount Available is insufficient to make such
payment in full, then pro rata to the Class MF-1 and Class MV-1
Certificateholders based upon their respective entitlements;
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(11) after payment of the amounts specified in clauses (1) through
(10) above, to the Class M-2 Certificateholders as follows:
(i) any Class M-2 Liquidation Loss Interest Amount and, if the
remaining Amount Available is insufficient to make such payment in
full, then pro rata to the Class MF-2 and Class MV-2
Certificateholders based upon their respective entitlements; and
(ii) any Unpaid Class M-2 Liquidation Loss Interest Shortfall
and, if the remaining Amount Available is insufficient to make such
payment in full, then pro rata to the Class MF-2 and Class MV-2
Certificateholders based upon their respective entitlements;
(12) after payment of the amounts specified in clauses (1) through
(11) above, to the Class B-1 Certificateholders as follows:
(i) any Class B-1 Liquidation Loss Interest Amount and, if the
remaining Amount Available is insufficient to make such payment in
full, then pro rata to the Class BF-1 and Class BV-1
Certificateholders based upon their respective entitlements; and
(ii) any Unpaid Class B-1 Liquidation Loss Interest Shortfall
and, if the remaining Amount Available is insufficient to make such
payment in full, then pro rata to the Class BF-1 and Class BV-1
Certificateholders based upon their respective entitlements;
(13) after payment of the amounts specified in clauses (1) through
(12) above, to the Class B-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class B-2
Formula Distribution Amount;
(ii) any Unpaid Class B-2 Interest Shortfall; and
(iii) the Class B-2 Formula Principal Distribution Amount;
(14) after payment of the amounts specified in clauses (1) through
(13) above, to the Holders of the Adjustable Rate Certificates as follows:
(i) to the Class AV-1 Certificateholders, any Class AV-1
Available Funds Cap Carryover Amount, and to the Class AV-2
Certificateholders, any Class AV-2 Available Funds Cap Carryover
Amount; or, if the Amount Available is less than the amount necessary
to pay such amounts, pro rata to the Class AV-1 Certificates and the
Class AV-2 Certificates in accordance with their respective
entitlements;
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(ii) to the Class MV-1 Certificateholders, any Class MV-1
Available Funds Cap Carryover Amount;
(iii) to the Class MV-2 Certificateholders, any Class MV-2
Available Funds Cap Carryover Amount;
(iv) to the Class BV-1 Certificateholders, any Class BV-1
Available Funds Cap Carryover Amount; and
(15) (i) 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 with respect to the Loans; and
(ii) after payment of the amounts specified in clauses (1)
through (15)(i) 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;
(16) after payment of the amounts specified in clauses (1) through
(15) above, any Extra 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) to the Class AV-1, Class AV-2 and Class AF Certificates, pro
rata based upon the Class AV-1 Principal Balance, the Class AV-2
Principal Balance and the Class AF Principal Balance, and among the
Class AF Certificates first to the Class AF-6 Certificates and then to
the other Class AF Certificates in the order set forth above in
clauses (c) through (g) of Section 8.04(b)(6)(ii)(B);
(ii) to the Class MV-1 and MF-1 Certificates, pro rata based on
the Class Principal Balance of each Class;
(iii) to the Class MV-2 and MF-2 Certificates, pro rata based on
the Class Principal Balance of each Class;
(iv) to the Class BV-1 and Class BV-2 Certificates, pro rata
based on the Class Principal Balance of each Class;
(v) to the Class B-2 Certificates; and
(vi) to the Class P Certificates.
(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
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(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 and Class AV Certificates,
pro rata based upon the Class Principal Balance of each Class of Class
AF and Class AV Certificates until paid in full;
(iii) then to the Class M-1, Class M-2, Class B-1 and Class B-2
Certificates, pro rata based on the Class Principal Balance of each
Class of M-1, Class M-2, Class B-1 and Class B-2 Certificates, until
paid in full.
(18) after payment of the amounts specified in clauses (1) through
(17) above, to reimburse the Class C Certificateholders for expenses
incurred by and reimbursable to them pursuant to Section 10.06;
(19) after payment of the amounts specified in clauses (1) through
(18) above, to reimburse the Guarantor for any prior unreimbursed Class B-2
Guaranty Payments;
(20) after payment of the amounts specified in clauses (1) through
(19) above, to pay the Class B-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 as
follows:
(i) if the Payment Date is after the Prepayment Term, to the
Class P Certificateholders until the Class P Principal Balance is
reduced to zero and
(ii) otherwise, to the Class C Master 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 Group I
ARM Amount, Pre-Funded Group II ARM Amount or Pre-Funded Fixed Rate Amount
deposited in the Certificate Account shall be applied solely to pay principal of
the Class AV-1 Certificates, Class AV-2 Certificates or Class AF-1 Certificates,
respectively, 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
Certificateholders all Prepayment Charges included in the Amount Available for
such Payment Date.
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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; 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 on each such Loan at a
rate per annum equal to the Weighted Average Pass-Through Rate, plus (y)
the fair market value of such acquired property (as reasonably determined
by the Servicer as of the close of business on the third Business Day
preceding the date of such purchase), and
(ii) the Aggregate Certificate Principal Balance as of the date of
such purchase (less any amounts on deposit in the Certificate Account on
such purchase date and representing payments of principal in respect of the
Loans) plus an amount necessary to pay the Class A Formula Interest
Distribution Amount, the Class AV-1 Available Funds Cap Carryover Amount,
the Class AV-2 Available Funds Cap Carryover Amount, the Class M-1 Formula
Interest Distribution Amount, the Class M-1 Formula Liquidation Loss
Interest Distribution Amount, the Class MV-1 Available Funds Cap Carryover
Amount, the Class M-2 Formula Interest Distribution Amount, the Class M-2
Formula Liquidation Loss Interest Distribution Amount, the Class MV-2
Available Funds Cap Carryover Amount, the Class B-1 Formula Interest
Distribution Amount, the Class B-1 Formula Liquidation Loss Interest
Distribution Amount, the Class BV-1 Available Funds Cap Carryover Amount,
and the Class B-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).
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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 Certificates, by
giving written notice of such assignment to the Trustee. Following the Trustee's
receipt of such notice of assignment, the Trustee shall recognize only such
assignee (or its assignee in turn) as the Person entitled to exercise the
purchase option set forth in Section 8.06(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").
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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 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 $0.00 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 1999-H." On the
Payment Date occurring in each of December 1999, January 2000, and February
2000, if the Monthly
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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 A Formula Interest Distribution Amount, the Class
M-1 Formula Interest Distribution Amount, the Class M-2 Formula Interest
Distribution Amount, and the Class B-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 A Formula Interest Distribution Amount, second to pay
any deficiency in the Amount Available to pay the Class M-1 Formula Interest
Distribution Amount, third to pay any deficiency in the Amount Available to pay
the Class M-2 Formula Interest Distribution Amount, and fourth to pay any
deficiency in the Amount Available to pay the Class B-1 Formula Interest
Distribution Amount.
b. The Capitalized Interest Account shall be part of the Trust but not part
of the Subsidiary REMIC or the Master REMIC. The Trustee on behalf of the Trust
shall be the legal owner of the Capitalized Interest Account. 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 February 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 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 amounts 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 1999-H." The Trustee shall maintain within
the Pre-Funding Account three subaccounts as follows: the "Pre-Funding Group I
ARM Subaccount," the "Pre-Funding Group II ARM Subaccount," and the "Pre-Funding
Fixed Rate Subaccount". 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
Certificates for the uses and purposes set forth herein.
b. On or before the Closing Date the Originator shall deposit in the
Pre-Funding Group I ARM Subaccount, the Pre-Funding Group II ARM Subaccount and
the Pre-Funding
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Fixed Rate Subaccount, the respective amounts specified in Section 2.02(l).
Amounts on deposit in such subaccounts shall be withdrawn by the Trustee as
follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw from
the Pre-Funding Group I ARM Subaccount an amount equal to 100% of the
Cut-off Date Principal Balance of each Subsequent Group I Adjustable Rate
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 any Subsequent Transfer Date, the Trustee shall withdraw from
the Pre-Funding Group II ARM Subaccount an amount equal to 100% of the
Cut-off Date Principal Balance of each Subsequent Group II Adjustable Rate
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.
(iii) On any Subsequent Transfer Date, the Trustee shall withdraw from
the Pre-Funding Fixed Rate Subaccount an amount equal to 100% of the
Cut-off Date Principal Balance of each Subsequent Fixed Rate 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.
(iv) 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 Group I ARM Subaccount, the
Pre-Funding Group II ARM Subaccount and the Pre-Funding Fixed Rate
Subaccount, net of investment earnings.
c. The Pre-Funding Account shall be part of the Trust but not part of the
Master REMIC or Subsidiary REMIC. The Trustee on behalf of the Trust shall be
the legal owner of the Pre-Funding Account. The Seller shall be the beneficial
owner of the Pre-Funding Account, subject to the foregoing power of the Trustee
to transfer amounts in the Pre-Funding Account to the Certificate Account. Funds
in the Pre-Funding Account shall, at the direction of the Servicer, be invested
in Eligible Investments of the kind described in clauses (i) and (ii)(A) of the
definition of "Eligible Investments" and that mature no later than the Business
Day prior to the next succeeding Payment Date. All amounts earned on deposits in
the Pre-Funding Account shall be taxable to the Seller. The Trustee shall
release to the Seller all investment earnings in the Pre-Funding Account on the
first Payment Date after the end of the Pre-Funding Period.
SECTION 8.09. Distributions on the Subsidiary REMIC Regular Interests.
a. On each Payment Date the Trustee shall be deemed to distribute to
itself, as the holder of the Subsidiary REMIC Regular Interests, the Subsidiary
REMIC Regular Interest Distribution Amounts in the following order of priority
to the extent of the Amount Available:
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(i) Subsidiary REMIC Accrued Interest on the Subsidiary REMIC Regular
Interests S-1 and S-2 for such Payment Date, plus any Subsidiary REMIC
Accrued Interest thereon remaining unpaid from any previous Payment Date;
(ii) Subsidiary REMIC Accrued Interest on the Subsidiary REMIC Regular
Interest S-3 for such Payment Date, plus any Subsidiary REMIC Accrued
Interest thereon remaining unpaid from any previous Payment Date;
(iii) [Interest] on the Subsidiary REMIC Regular Interest S-4 in an
amount equal to the Prepayment Charges;
(iv) Principal equal to the Class A Formula Principal Distribution
Amount, first on the Subsidiary REMIC Regular Interest S-1 until the
related Subsidiary REMIC Principal Balance is reduced to zero, and then on
the Subsidiary REMIC Regular Interest S-2 until the related Subsidiary
REMIC Principal Balance is reduced to zero;
(v) Principal equal to the sum of the Class MF-1, the Class MV-1, the
Class MF-2, the Class MV-2, the Class BF-1, the Class BV-1 and the Class
B-2 Formula Principal Distribution Amounts on the Subsidiary REMIC Regular
Interest S-3 until the related Subsidiary REMIC Principal Balance is
reduced to zero; and
(vi) Principal on the Subsidiary REMIC Regular Interest S-4 equal to
the amount described in Section 8.09(b)(21)(i).
b. On each Payment Date the Trustee shall be deemed to distribute from the
Master REMIC, to the holders of the Certificates in the priority set forth in
Section 8.04(b), the Subsidiary REMIC Regular Interest Distribution Amounts
deemed to have been received by the Master REMIC from the Subsidiary REMIC under
this Section 8.09.
c. Notwithstanding the deemed distributions on the Subsidiary REMIC Regular
Interests described in this Section 8.09, distributions of funds from the
Certificate Account shall be made only in accordance with Section 8.04.
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ARTICLE IX
THE CERTIFICATES AND THE CLASS C CERTIFICATES
SECTION 9.01. The Certificates and the Class C Certificates. The Class A,
the Class M, the Class B, the Class P and the Class C Certificates shall be
substantially in the forms set forth in Exhibits A-1, A-2, A-3, B-1, B-2, C-1,
C-2, 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
A, the Class M and the Class B Certificates shall be evidenced by (i) one or
more Class AV-1 Certificates evidencing $205,778,858 in Original Class AV-1
Principal Balance, (ii) one or more Class AV-2 Certificates evidencing
$28,854,474 in Original Class AV-2 Principal Balance, (iii) one or more Class
MV-1 Certificates evidencing $20,750,000 in Original Class MV-1 Principal
Balance, (iv) one or more Class MV-2 Certificates evidencing $17,200,000 in
Original Class MV-2 Principal Balance, (v) one or more Class BV-1 Certificates
evidencing $12,750,000 in Original Class BV-1 Principal Balance, (vi) one or
more Class AF-1 Certificates evidencing $178,634,491 in Original Class AF-1
Principal Balance, (vii) one or more Class AF-2 Certificates evidencing
$129,334,162 in Original Class AF-2 Principal Balance, (viii) one or more Class
AF-3 Certificates evidencing $39,333,268 in Original Class AF-3 Principal
Balance, (ix) one or more Class AF-4 Certificates evidencing $51,500,000 in
Original Class AF-4 Principal Balance, (x) one or more Class AF-5 Certificates
evidencing $38,196,744 in Original Class AF-5 Principal Balance, (xi) one or
more Class AF-6 Certificates evidencing $51,268,000 in Original Class AF-6
Principal Balance, (xii) one or more Class A-IO Certificates evidencing a Class
A-IO Original Notional Principal Amount of $90,000,000, (xiii) one or more Class
MF-1 Certificates evidencing $32,700,000 in Original Class MF-1 Principal
Balance, (xiv) one or more Class MF-2 Certificates evidencing $30,300,000 in
Original Class MF-2 Principal Balance, (xv) one or more Class BF-1 Certificates
evidencing $19,400,000 in Original Class BF-1 Principal Balance, (xvi) one or
more Class B-2 Certificates representing $30,500,003 in Original Class B-2
Principal Balance, and (xvii) one or more Class P Certificates evidencing $100
in Original Class P Principal Balance, beneficial ownership of such Classes of
Certificates (other than the Class P Certificates) 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 Subsidiary 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 Subsidiary
Certificates. The Class C Master 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 Master Certificates.
The Certificates and the Class C Certificates 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 Certificates bearing the
signatures of individuals who were at any time the proper officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the execution and delivery of
such Certificate or Class C Certificates, or did not hold such offices at the
date of such Certificates or Class C Certificates. 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
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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
Certificates shall be dated the date of their execution, except for those
Certificates and the Class C Certificates executed on the Closing Date, which
shall be dated the Closing Date.
SECTION 9.02. Registration of Transfer and Exchange of Certificates and the
Class C Certificates.
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 Certificates
and of transfers and exchanges of Certificates and the Class C Certificates 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 Certificates and transfers and exchanges of Certificates and the
Class C Certificates as provided herein. The Trustee will give prompt written
notice to Certificateholders, the Class C Certificateholders and the Servicer of
any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class 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 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 M, Class B, 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
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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 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.
(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
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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 Certificates may be exchanged for other
Certificates or Class C Certificates of authorized denominations of a like
aggregate original denomination, upon surrender of such Certificates or the
Class C Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates or the Class C Certificates are so surrendered for exchange, the
Trustee shall execute and deliver the Certificates or Class C Certificates which
the Certificateholder or Class C Certificateholders 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 the 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 the Certificates on the books of the Depository
shall be governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall deal with the Depository,
Depository Participants and indirect participating firms as representatives of
the Certificate Owners of the 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
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through the Depository, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Originator nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository two Class AV-1 Certificates, one Class AV-2 Certificate, one Class
MV-1 Certificate, one Class MV-2 Certificate, one Class BV-1 Certificate, 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 A-IO Certificate, one Class MF-1 Certificate, one Class
MF-2 Certificate, one Class BF-1 Certificate, and one Class B-2 Certificate,
each in registered form registered in the name of the Depository's nominee, Cede
& Co., the total face amount of which represents 100% of the Original Class
Principal Balance (or, in the case of the Class A-IO Certificates, the Class
A-IO Original Notional Principal Amount) of each Class, respectively. Each such
Certificate registered in the name of the Depositary'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."
SECTION 9.03. No Charge; Disposition of Void Certificates or Class C
Certificates. 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 Certificates surrendered for transfer
and exchange shall be disposed of in a manner approved by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or Class C
Certificates. 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
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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 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
Certificateholders' Names and Addresses. The Certificate Registrar will furnish
to the Trustee and the Servicer, within five days after receipt by the
Certificate Registrar of a request therefor from the Trustee in writing, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders and the Class C Certificateholders 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 Certificateholders with respect to their rights under this
Agreement or under the Certificates or the Class C Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders and the Class C Certificateholders
held by the Trustee. If such list is as of a date more than 90 days prior to the
date of receipt of such Applicants' request, the Trustee shall promptly request
from the Certificate Registrar a current list as provided above, and shall
afford such Applicants access to such list promptly upon receipt. Every
Certificateholder and the Class C Certificateholders, 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 Certificateholders hereunder, regardless of the source from which such
information was derived.
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SECTION 9.07. Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates or the Class C
Certificates. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class C Certificates by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class C Certificates "by the Trustee."
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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
Certificateholders 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 Certificateholders under or as a result of
this Agreement and the transactions contemplated hereby and, to the maximum
extent permitted and valid under mandatory provisions of law, the Trust, the
Certificateholders and the Class C Certificateholders expressly disclaim such
assumption.
SECTION 10.03. Tax Indemnification. The Originator agrees to pay, and to
indemnify, defend and hold harmless the Trust, the Trustee (including the
Custodian and any other agents of the Trustee), the Certificateholders and the
Class C Certificateholders from, any taxes which may at any time be asserted
with respect to, and as of the date of, the transfer of the Loans to the Trust,
including, without limitation, any sales, gross receipts, general corporation,
personal property, privilege or license taxes (but not including any federal,
state or other taxes arising out of the creation of the Trust and the issuance
of the Certificates and the Class C Certificates) 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 Certificateholders 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 Certificateholders
against any and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation, in
respect of any action taken or omitted to be taken by the Servicer with respect
to any 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.
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SECTION 10.05. Operation of Indemnities. Indemnification under this Article
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Originator or the Servicer has made any indemnity
payments to the Trustee pursuant to this Article and the Trustee thereafter
collects any of such amounts from others, the Trust will repay such amounts
collected to the Originator or the Servicer, as the case may be, without
interest.
SECTION 10.06. REMIC Tax Matters. If a Class C Certificateholder, pursuant
to Section 6.06, pays any taxes or charges imposed upon the Trust, the Master
REMIC or the Subsidiary REMIC 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 Certificateholders 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 Certificateholders be entitled to
reimbursement therefor out of the Certificate Account, if and to the extent that
such taxes or charges resulted from a failure (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.
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ARTICLE XI
THE TRUSTEE
SECTION 11.01. Duties of Trustee. The Trustee, prior to the occurrence of
an Event of Termination and after the curing of all Events of Termination which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform 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
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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
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Balance; provided, however, that if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding.
The reasonable expense of every such examination shall be paid by the
Servicer or, if paid by the Trustee, shall be reimbursed by the Servicer
upon demand; and
e. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions
of such agents, attorneys or custodians if appointed by it with due care
hereunder.
SECTION 11.03. Trustee Not Liable for Certificates, Class C Certificates or
Loans. The Trustee assumes no responsibility for the correctness of the recitals
contained herein, in the Certificates or in the Class C Certificates (other than
the Trustee's execution thereof). The Trustee makes no representations as to the
validity or sufficiency of this Agreement, of the Certificates or of the Class C
Certificates (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
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waiver shall extend to any subsequent or other Event of Termination or impair
any right consequent thereon.
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses. The
Servicer agrees:
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 Trust 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 Fitch of at least BBB or as shall
be otherwise acceptable to Fitch 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
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Section 11.07, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.08.
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.
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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 Certificateholders at their addresses as shown in the Certificate
Register. If the Servicer fails to mail such notice within ten days after
acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Servicer.
SECTION 11.10. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be eligible under the provisions of Section 11.07,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall promptly notify the Rating Agencies in the event it is a party to
any merger, conversion or consolidation.
SECTION 11.11. Tax Returns. Upon the Servicer's request, the Trustee will
furnish the Servicer with all such information as the Servicer may reasonably
require in connection with preparing all tax returns of the Trust and the
Trustee shall execute such returns.
SECTION 11.12. Obligor Claims. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Loans based upon provisions therein complying with, or upon
other rights or remedies arising from, any legal requirements applicable to the
Loans, including, without limitation, the Federal Trade Commission's Trade
Regulation Rule Concerning Preservation of Consumers' Claims and Defenses (16
C.F.R. ss. 433) as amended from time to time:
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 Certificateholders, and not as a
principal or in any individual or personal capacity;
b. The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders or the Class C Certificateholders 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;
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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 Certificateholders;
e. The Trustee will cooperate with and assist Certificateholders and
the Class C Certificateholders in their defense of legal actions by
Obligors to recover affirmative claims if such cooperation and assistance
is not contrary to the interests of the Trustee as a party to such legal
actions and if the Trustee is satisfactorily indemnified for all liability,
costs and expenses arising therefrom; and
f. The Originator hereby agrees to indemnify, hold harmless and defend
the Trustee, Certificateholders and the Class C Certificateholders from and
against any and all liability, loss, costs and expenses of the Trustee,
Certificateholders and the Class C Certificateholders 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
Certificateholders of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 11.09.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 11.13 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such co-trustee or separate trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee or separate
trustee at the direction of the Trustee.
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Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then co-trustees and separate trustees, as
effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.14. Trustee and U.S. Bancorp. In the event the Trustee ceases to
be a direct, wholly owned subsidiary of U.S. Bancorp, the Trustee shall promptly
notify the Rating Agencies.
SECTION 11.15. Trustee Advances.
a. If the Servicer fails to deposit into the Certificate Account Advances
as required by Section 8.02, then the Trustee shall, subject to the provisions
of paragraph (b) below, from its own funds, deposit into the Certificate Account
the amount not so deposited by the Servicer on or before the Business Day
preceding the related Payment Date (a "Trustee Advance").
b. The Trustee shall not be required to make any Trustee Advance if and to
the extent that it determines in good faith that the funds, if advanced, would
not be recoverable by it from subsequent amounts available in the Certificate
Account in accordance with Section 8.04(b).
c. The Trustee shall be entitled to reimbursement of a Trustee Advance from
funds subsequently available therefor in the Certificate Account in accordance
with Section 8.04(b).
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 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 Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Trustee in respect of the
Certificates, the Class C Certificates 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 Certificateholders 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 Certificateholders
as set forth below) shall terminate on the earlier of (a) the Payment Date on
12-1
<PAGE>
which the principal balance of all of the Loans is reduced to zero; or (b) the
Payment Date occurring in the month following the sale of the Loans pursuant to
Section 8.06; provided, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of 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 Master REMIC and Subsidiary 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 Certificateholders may surrender their
Certificates or the Class C Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Trustee (upon
direction by the Servicer ten days prior to the date such notice is to be
mailed) by letter to each of the Rating Agencies, the Certificateholders and the
Class C Certificateholders 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 Certificates will be made upon
presentation and surrender of Certificates and the Class C Certificates at the
office or agency of the Trustee therein designated; (2) the amount of any such
final payment; and (3) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates and the Class C Certificates 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 Certificateholders 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 Certificateholders. 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 Certificateholders 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
Certificates, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of priority, to the Certificateholders and the
Class C Certificateholders 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 A Certificates, the Class AV-1
Principal Balance, the Class AV-2 Principal
12-2
<PAGE>
Balance, the Class AF-1 Principal Balance, the Class AF-2 Principal Balance, the
Class AF-3 Principal Balance, the Class AF-4 Principal Balance, the Class AF-5
Principal Balance, the Class AF-6 Principal Balance and, together with any
Unpaid Class A Interest Shortfall, any Class AV-1 Formula Available Funds Cap
Carryover Amount, any Class AV-2 Formula Available Funds Cap Carryover Amount
and one month's interest at the Pass-Through Rate for each Class of Class A
Certificates on the Class Principal Balance (or with respect to the Class A
Certificates, the Class A-IO Notional Principal Amount), respectively, (ii) as
to Class MF-1 Certificates, the Class MV-1 Principal Balance, together with any
Unpaid Class MV-1 Interest Shortfall, any Class MV-1 Formula Available Funds Cap
Carryover Amount, any Unpaid Class MV-1 Liquidation Loss Interest Shortfall and
one month's interest at the Class MV-1 Pass-Through Rate on the Class MV-1
Principal Balance, and 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 M-2 Certificates, the
Class MV-2 Principal Balance, together with any Unpaid Class MV-2 Interest
Shortfall, any Class MV-2 Formula Available Funds Cap Carryover Amount, any
Unpaid Class MV-2 Liquidation Loss Interest Shortfall and one month's interest
at the Class MV-2 Pass-Through Rate on the Class MV-2 Principal Balance, and 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 B-1 Certificates, the Class BV-1 Principal Balance,
together with any Unpaid Class BV-1 Interest Shortfall, any Class BV-1 Formula
Available Funds Cap Carryover Amount, any Unpaid Class BV-1 Liquidation Loss
Interest Shortfall and one month's interest at the Class BV-1 Pass-Through Rate
on the Class BV-1 Principal Balance, 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 B-2 Certificates, the
Class B-2 Principal Balance, together with any Unpaid Class B-2 Interest
Shortfall and one month's interest at the Class B-2 Pass-Through Rate on the
Class B-2 Principal Balance and (vi) as to Class P Certificates the Class P
Principal Balance and any Prepayment Charges; and (2) as to the Class C
Certificates, 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 B-2 Guaranty Payment deposited in
the Certificate Account shall be distributed only to the Class B-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
Certificates.
d. In the event that all of the Certificateholders and the Class C
Certificateholders do not surrender their Certificates and the Class C
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Originator shall give a second written
notice to the remaining Certificateholders and the Class C Certificateholders to
surrender their Certificates and the Class C Certificates 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 Certificates shall
not have been surrendered for cancellation, the Originator shall transfer to
itself all amounts remaining on deposit in the Certificate Account, to hold in
trust for
12-3
<PAGE>
Certificateholders and the Class C Certificateholders who have not surrendered
their Certificates or the Class C Certificates, as the case may be, for
cancellation, together with the final record list of Certificateholders and the
Class C Certificateholders, and the Originator shall take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and to contact the
Class C Certificateholders concerning their surrender of their Class C
Certificates, 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 Certificateholders.
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates representing, in the aggregate, 51% or more of the
Aggregate Certificate Principal Balance.
b. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders or the Class C Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders or the Class C Certificateholders 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 Certificateholders 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 Certificates 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 Certificateholders shall bind
every holder of every Certificate or the Class C Certificates, 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 Certificates.
f. The Trustee may require such additional proof of any matter referred to
in this Section as it shall deem necessary.
12-4
<PAGE>
SECTION 12.06. Calculations. Except as otherwise provided in this
Agreement, all interest rate and basis point calculations under this Agreement
will be made on the basis of a 360-day year and twelve 30-day months and will be
carried out to at least three decimal places.
SECTION 12.07. 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 12.08. 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 Certificateholders, to correct manifest error, to cure any
ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, as the case may be, to make such
changes as are necessary to maintain the status of 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 Certificateholders, 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 either of
the Master REMIC or the Subsidiary REMIC as a REMIC or the status of the
12-5
<PAGE>
Certificates or the Subsidiary REMIC Regular Interests as "regular interests" in
the Master REMIC or Subsidiary REMIC, respectively, 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
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement which would
modify in any manner the rights of the Class C Certificateholders.
c. This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholders if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
d. Concurrently with the solicitation of any consent pursuant to this
Section 12.08, the Trustee shall furnish written notification to each of the
Rating Agencies. 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 the Rating Agencies, each
Certificateholder and the Class C Certificateholders.
e. It shall not be necessary for the consent of Certificateholders and the
Class C Certificateholders under this Section 12.08 to approve the particular
form of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders and
the Class C Certificateholders shall be subject to such reasonable requirements
as the Trustee may prescribe.
f. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
g. In connection with any amendment pursuant to this Section, the Trustee
shall be entitled to receive an 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 Certificateholders 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 either of the Master REMIC or the Subsidiary
REMIC as a REMIC or the status of the Certificates or the Subsidiary REMIC
Regular Interests as "regular interests" therein, and (ii) will not cause any
tax (other than
12-6
<PAGE>
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 12.09. Notices. All communications and notices pursuant hereto to
the Seller, the Servicer, the Originator, the Trustee, the Rating Agencies shall
be in writing and delivered or mailed to it at the appropriate following
address:
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the 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 Fitch:
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Attention: Steven Lei
If to Duff & Phelps:
Duff & Phelps Credit Rating Co.
17 State Street
New York, New York 10004
Attention: Abner Figueroa
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 Certificateholders shall be in writing and delivered or mailed at
the address shown in the Certificate Register.
SECTION 12.10. 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 12.11. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 12.12. 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 30th day of
November, 1999.
CONSECO FINANCE CORP.
By:
------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
CONSECO FINANCE SECURITIZATIONS
CORP.
By:
------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By:
------------------------------------
Laurie A. Howard
Vice President
12-9
<PAGE>
STATE OF INDIANA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
_______________, 1999, by ____________________, of Conseco Finance Corp., a
Delaware corporation, on behalf of the corporation.
---------------------------------------
Notary Public
[SEAL]
STATE OF INDIANA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
_______________, 1999, by ____________________, of Conseco Finance
Securitizations Corp., a Minnesota corporation, on behalf of the corporation.
---------------------------------------
Notary Public
[SEAL]
12-10
<PAGE>
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this _____ day of
_______________, 1999, by Laurie A. Howard, of U.S. Bank Trust National
Association, a national banking association, on behalf of the national banking
association.
---------------------------------------
Notary Public
[SEAL]
12-11
<PAGE>
EXHIBIT A-1
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:
as defined in the Pooling and Pass-Through Rate: %
Servicing Agreement --------
dated November 1, 1999
Denomination: $
---------------
First Payment Date: Aggregate Denomination of
December 15, 1999 all Class AF-[1][2][3][4][5][6]
Certificates: $
---------------
Servicer: Final Scheduled Payment Date:
Conseco Finance Corp. November 15, 2029 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:
-----------------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-H, 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 Cede & Co. 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 1999-H, Class
AF-[1][2][3][4][5][6] issued by Home Equity Loan Trust 1999-H (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
A-1-1
<PAGE>
Cut-off Date or Subsequent Cut-off Date). The Trust has been created pursuant to
a Pooling and Servicing Agreement (the "Agreement"), dated as of November 1,
1999, 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 December
1999, 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 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 November 15, 2029 or the next succeeding Business Day if
such November 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
A-1-2
<PAGE>
new Certificates evidencing the same aggregate Percentage Interest will be
issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-1-3
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
-----------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-----------------------------------
Authorized Officer
A-1-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________________ the within Certificate for Home
Equity Loans, Series 1999-H, and does hereby irrevocably constitute and appoint
___________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: By:
---------------- ----------------------------
Signature
A-1-5
<PAGE>
EXHIBIT A-2
FORM OF CLASS AV-[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.
Class AV-[1][2] No.
(Senior)
Cut-off Date: Pass-Through Rate: Variable
as defined in the Pooling and Servicing rate equal to Class AV-[1][2]
Agreement dated November 1, 1999 Pass-Through Rate
Denomination: $
---------------
First Payment Date: Aggregate Denomination of
December 15, 1999 all Class AV-[1][2]
Certificates: $
---------------
Servicer: Final Scheduled Payment Date:
Conseco Finance Corp. November 15, 2029 (or if such day is
not a Business Day, then the next
succedding Business Day)
CUSIP:
------------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-H, CLASS AV-[1][2] (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 1999-H, Class
AV-[1][2] issued by Home Equity Loan Trust 1999-H (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 or Subsequent Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 1999, among Conseco Finance
A-2-1
<PAGE>
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 December
1999, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class AV-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class AV-[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 AV-[1][2] Distribution
Amount for such Payment Date. Distributions of interest and principal on the
Class AV-[1][2] Certificates will be made primarily from amounts available in
respect of the Loans. The final scheduled Payment Date of this Certificate is
November 15, 2029 or the next succeeding Business Day if such November 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.
A-2-2
<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.
A-2-3
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
------------------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-----------------------------
Authorized Officer
A-2-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________ the within Certificate for Home Equity Loans, Series
1999-H, and does hereby irrevocably constitute and appoint
___________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: By:
------------------- ----------------------------
Signature
A-2-5
<PAGE>
EXHIBIT A-3
FORM OF CLASS A-IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
Class A-IO No.
(Senior)
Cut-off Date: Pass-Through Rate: %
as defined in the Pooling and --------
Servicing Agreement dated Denomination: $
November 1, 1999 ---------------
First Payment Date: Aggregate Class A-IO Original Notional
December 15, 1999 Principal Amount: $90,000,000
Servicer: Final Scheduled Payment Date:
Conseco Finance Corp. November 15, 2029 (or if such day is not
a Business Day, then the next succeeding
Business Day)
CUSIP:
------------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-H, CLASS A-IO (SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that ____________________ is the registered owner of the
undivided Percentage Interest represented by the Class A-IO Original Notional
Principal Amount set forth above in the Certificates for Home Equity Loans,
Series 1999-H, Class A-IO issued by Home Equity Loan Trust 1999-H (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 or Subsequent Cut-off Date).
The Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 1999, among Conseco Finance Corp., as
Originator, Servicer and Guarantor (the "Originator"), Conseco
A-3-1
<PAGE>
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 December
1999, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A-IO Certificates with an aggregate Percentage
Interest of at least 5% of the Class A-IO Certificates and so desires, by wire
transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class A-IO Distribution Amount for such Payment Date.
Distributions of interest on the Class A-IO Certificates will be made primarily
from amounts available in respect of the Loans. The final scheduled Payment Date
of this Certificate is November 15, 2029 or the next succeeding Business Day if
such November 15 is not a Business Day.
This Certificate is an interest only Certificate. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE LOANS.
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
A-3-2
<PAGE>
Certificates evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-3-3
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
-----------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-------------------------
Authorized Officer
A-3-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________ the within Certificate for Home Equity Loans,
Series 1999-H, 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-3-5
<PAGE>
EXHIBIT B-1
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 A
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 Denomination: $
November 1, 1999 ----------------
Aggregate Denomination of
First Payment Date: all Class MF-[1][2] Certificates:
December 15, 1999 $
---------------
Servicer: Final Scheduled Payment Date:
Conseco Finance Corp. November 15, 2029 (or if such day is
not a Business Day, then the next
succeeding Business Day)
CUSIP:
-----------------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-H, 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 COUNSEL
(SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE
B-1-1
<PAGE>
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 1999-H, Class
MF-[1][2] issued by Home Equity Loan Trust 1999-H (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 or Subsequent Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 1999, 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 December
1999, 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
B-1-2
<PAGE>
any Additional Principal Distribution Amount for such Payment Date.
Distributions of interest and 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 November 15, 2029 or the next
succeeding Business Day if such November 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
B-1-3
<PAGE>
Certificates evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-1-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
-----------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-------------------------
Authorized Officer
B-1-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________ the within Certificate for Home Equity Loans, Series
1999-H, 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-1-6
<PAGE>
EXHIBIT B-2
FORM OF CLASS MV-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND CLASS MV-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class MV-[1][2] No.
(Subordinate)
Cut-off Date: Pass-Through Rate: Variable rate
as defined in the Pooling and equal to Class MV-[1][2]
Servicing Agreement dated Pass-Through Rate
November 1, 1999
First Payment Date: Denomination: $
December 15, 1999 ----------------
Servicer: Aggregate Denomination of
Conseco Finance Corp. all Class MV-[1][2] Certificates:
$
---------------
Final Scheduled Payment Date:
November 15, 2029 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:
-----------------
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-H, CLASS MV-[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")
B-2-1
<PAGE>
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.
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 1999-H, Class
MV-[1][2] issued by Home Equity Loan Trust 1999-H (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 or Subsequent Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 1999, 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 December
1999, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class MV-[1][2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class MV-[1][2] Certificates and so
desires, by wire transfer pursuant to instructions delivered to the Trustee at
least 10 days prior to such
B-2-2
<PAGE>
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 MV-[1][2] Distribution Amount and any Additional Principal
Distribution Amount for such Payment Date. Distributions of interest and
principal on the Class MV-[1][2] Certificates will be made primarily from
amounts available in respect of the Loans. The final scheduled Payment Date of
this Certificate is November 15, 2029 or the next succeeding Business Day if
such November 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
B-2-3
<PAGE>
in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Certificates evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-2-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
-----------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------
Authorized Officer
B-2-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Certificate for Home Equity Loans,
Series 1999-H, 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-2-6
<PAGE>
EXHIBIT C-1
FORM OF CLASS [BF-1][B-2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A[,]
AND THE CLASS M CERTIFICATES [AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Class [BF-1][B-2] No.
(Subordinate)
Cut-off Date: Pass-Through Rate: %
as defined in the Pooling and -------
Servicing Agreement dated
November 1, 1999 Denomination: $
---------------
First Payment Date: Aggregate Denomination of
December 15, 1999 all Class [BF-1][B-2] Certificates:
$
-----------------------
Servicer:
Conseco Finance Corp. Final Scheduled Payment Date:
November 15, 2029 (or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP:
-----------------
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 1999-H, CLASS [BF-1][B-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
C-1-1
<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 1999-H, Class
[BF-1][B-2], issued by Home Equity Loan Trust 1999-H (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 or the Subsequent Cut-off Date [and
payments due under the Class B-2 Limited Guaranty]). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
November 1, 1999, 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 December
1999, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class [BF-1][B-2] Certificates with an aggregate
Percentage Interest of at least 5% of the Class [BF-1][B-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
C-1-2
<PAGE>
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the Certificateholder's Percentage Interest of the Class
[BF-1][B-2] Distribution Amount and any Additional Principal Distribution Amount
[and any Class B-2 Guaranty Payment] for such Payment Date. Distributions of
interest and principal on the Class [BF-1][B-2] Certificates will be made
primarily from amounts available in respect of the Loans. The final scheduled
Payment Date of this Certificate is November 15, 2029 or the next succeeding
Business Day if such November 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
B-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
C-1-3
<PAGE>
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder thereof or his or her attorney duly authorized in writing, and
thereupon one or more new Certificates evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-1-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
------------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------
Authorized Officer
C-1-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________ the within Certificate for Home Equity Loans,
Series 1999-H, and does hereby irrevocably constitute and appoint
______________________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: By:
------------------ -----------------------
Signature
C-1-6
<PAGE>
EXHIBIT C-2
FORM OF CLASS BV-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
THE CLASS M CERTIFICATES AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
Class BV-1 No.
(Subordinate)
Cut-off Date: Pass-Through Rate: Variable
as defined in the Pooling and rate equal to Class BV-1
Servicing Agreement dated Pass-Through Rate
November 1, 1999
First Payment Date: Denomination: $
December 15, 1999 ---------------
Servicer: Aggregate Denomination of
Conseco Finance Corp. all Class BV-1 Certificates:
$
---------------
Final Scheduled Payment Date:
November 15, 2029 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:
-----------------
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 1999-H, CLASS BV-1 (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")
C-2-1
<PAGE>
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.
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 1999-H, Class
BV-1, issued by Home Equity Loan Trust 1999-H (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 or the Subsequent Cut-off Date). The
Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 1999, 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 December
1999, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class BV-1 Certificates with an aggregate Percentage
Interest of at least 5% of the Class BV-1 Certificates and so desires, by wire
transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such
C-2-2
<PAGE>
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 BV-1 Distribution Amount and any Additional Principal Distribution
Amount for such Payment Date. Distributions of interest and principal on the
Class BV-1 Certificates will be made primarily from amounts available in respect
of the Loans. The final scheduled Payment Date of this Certificate is November
15, 2029 or the next succeeding Business Day if such November 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
C-2-3
<PAGE>
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder thereof or his or her attorney duly authorized in writing, and
thereupon one or more new Certificates evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-2-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
------------------
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------
Authorized Officer
C-2-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Certificate for Home Equity Loans,
Series 1999-H, and does hereby irrevocably constitute and appoint
__________________________________ Attorney to transfer the said certificate on
the Certificate Register maintained by the Trustee, with full power of
substitution in the premises.
Dated: By:
------------------ -----------------------
Signature
C-2-6
<PAGE>
EXHIBIT D-1
FORM OF ASSIGNMENT
CONSECO FINANCE CORP.
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of November 1, 1999, among Conseco Finance Corp. (the
"Seller"), Conseco Finance Securitizations Corp. ("CFSC") and U.S. Bank Trust
National Association as Trustee (the "Trustee"), and the Transfer Agreement
dated as of November 1, 1999, between the Seller and CFSC, the undersigned does
hereby transfer, assign, set over and otherwise convey, without recourse, to
CFSC, (i) all right, title and interest in the home equity loans identified in
the List of Loans attached to the Transfer 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 the Seller may have
against the originating lender with respect to Initial 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 Loans, (v) all rights under any title insurance policies, if applicable,
on any of the properties securing Initial Loans, (vi) all documents contained in
the Loan Files relating to the Initial Loans, (vii) 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 (viii) 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
Transfer Agreement 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 ____________, 1999.
CONSECO FINANCE CORP.
By:
-----------------------
[Name]
[Title]
D-1
<PAGE>
EXHIBIT D-2
FORM OF ASSIGNMENT
CONSECO FINANCE SECURITIZATIONS CORP.
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of November 1, 1999, among Conseco Finance Securitizations
Corp. (the "Seller"), Conseco Finance Corp. (the "Originator") 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
Home Equity Loan Trust 1999-H, 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 and each
Subsequent Transfer Instrument (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 Cut-off Date, or
Subsequent Cut-off Date with respect to Subsequent Loans), (ii) all rights of
the Seller under the Transfer Agreement, (iii) 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, (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 related
Loan Files, (viii) amounts in the Certificate Account, any Pre-Funding Account,
and any Capitalized Interest Account (including all proceeds of investments) 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
shall have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of __________, 1999.
CONSECO FINANCE SECURITIZATIONS CORP.
By
-----------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
D-2
<PAGE>
EXHIBIT E-1
FORM OF CERTIFICATE OF OFFICER
CONSECO FINANCE CORP.
The undersigned certifies that he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company in
connection with the Pooling and Servicing Agreement dated as of November 1, 1999
(the "Pooling and Servicing Agreement") among the Company, 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 Pooling and Servicing Agreement), and further certifies that:
(i) attached hereto as Exhibit I is a true and correct copy of
the Certificate of Incorporation of the Company, together with all
amendments thereto as in effect on the date thereof;
(ii) attached hereto as Exhibit II is a true and correct copy
of the Restated Bylaws of the Company, as amended, as in effect on the
date hereof;
(iii) the representations and warranties of the Company
contained in Sections 3.02, 3.04 and 3.05 of the Pooling and Servicing
Agreement are true and correct on and as of the date hereof;
(iv) no event with respect to the Company 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 Pooling and Servicing Agreement;
(v) each of the agreements and conditions of the Company to be
performed on or before the date hereof pursuant to the Pooling and
Servicing Agreement and the Underwriting Agreement and related
agreements have been performed in all material respects;
(vi) attached hereto as Exhibit III are true and correct
copies of certain resolutions, duly adopted by the Board of Directors
of the Company on or prior to the date hereof, such resolutions (i)
constitute the only resolutions adopted by the Board of Directors or
any committee thereof relating to the subject matter thereof, (ii) have
not been amended, modified, annulled or revoked, and (iii) are in full
force and effect; and the instruments referred to in said resolutions
were executed pursuant thereto and in compliance therewith; and
E-1-1
<PAGE>
(vii) each person who, as an officer of the Company, signed
any of the Pooling and Servicing Agreement, Underwriting Agreement or
any other document delivered prior hereto or on the date hereof in
connection with the transactions contemplated thereby was, at the
respective times of such signing and delivery, and is now duly elected
or appointed, qualified and acting as such officer, and the signatures
of such persons appearing on such documents are their genuine
signatures.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
_______ day of _____________, 1999.
--------------------------------
[Name]
[Title]
E-1-2
<PAGE>
EXHIBIT E-2
FORM OF CERTIFICATE OF OFFICER
CONSECO FINANCE SECURITIZATIONS CORP.
The undersigned certifies that he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
he is duly authorized to execute and deliver this certificate on behalf of the
Company in connection with the Pooling and Servicing Agreement dated as of
November 1, 1999 (the "Pooling and Servicing Agreement") among Conseco Finance
Corp., the Company, and U.S. Bank Trust National Association as Trustee (all
capitalized terms used herein without definition having the respective meanings
specified in the Pooling and Servicing Agreement), and further certifies that:
(i) attached hereto as Exhibit I is a true and correct copy of
the Articles of Incorporation of the Company, together with all
amendments thereto as in effect on the date hereof;
(ii) attached hereto as Exhibit II is a true and correct copy
of the Bylaws of the Company, as amended, as in effect on the date
hereof;
(iii) the representations and warranties of the Company
contained in Section 3.01 of the Pooling and Servicing Agreement are
true and correct on and as of the date hereof and, to the best of his
knowledge, the representations and warranties of the Company contained
in Section 3.03 of the Pooling and Servicing Agreement are true and
correct on and as of the date hereof;
(iv) no event with respect to the Company 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 Pooling and Servicing Agreement;
(v) each of the agreements and conditions of the Company to be
performed on or before the date hereof pursuant to the Pooling and
Servicing Agreement and the Underwriting Agreement and related
agreements have been performed in all material respects.
(vi) attached hereto as Exhibit III are true and correct
copies of certain resolutions, duly adopted by the Board of Directors
of the Company on or prior to the date hereof, such resolutions (i)
constitute the only resolutions adopted by the Board of Directors or
any committee thereof relating to the subject matter thereof, (ii) have
not been amended, modified, annulled or revoked, and (iii) are in full
force and effect; and the instruments referred to in said resolutions
were executed pursuant thereto and in compliance therewith; and
E-2-1
<PAGE>
(vii) each person who, as an officer of the Company, signed
any of the Pooling and Servicing Agreement, Underwriting Agreement or
any other document delivered prior hereto or on the date hereof in
connection with the transactions contemplated thereby was, at the
respective times of such signing and delivery, and is now duly elected
or appointed, qualified and acting as such officer, and the signatures
of such persons appearing on such documents are their genuine
signatures.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
________ day of ________________, 1999.
------------------------------
[Name]
[Title]
E-2-2
<PAGE>
EXHIBIT F
FORM OF OPINION OF COUNSEL
The opinion of Briggs and Morgan, Professional Association shall be to
the effect that (capitalized terms have the meanings set forth in the Pooling
and Servicing Agreement):
1. The Originator is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power to execute, deliver and perform its obligations under the Pooling and
Servicing Agreement, the Transfer Agreement and the Underwriting Agreement
(collectively, the "Transaction Documents") (including the Class B-2 Limited
Guaranty contained in the Pooling and Servicing Agreement). The Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Minnesota, with corporate power to execute, deliver and
perform in its obligations under the Transaction Documents.
2. The Transaction Documents (including the Class B-2 Limited Guaranty
contained in the Pooling and Servicing Agreement) have been duly authorized by
all requisite corporate action, duly executed and delivered by the Originator
and the Seller, and constitute the valid and binding obligations of the
Originator and the Seller enforceable in accordance with their terms. The
Certificates have been duly authorized by all requisite corporate action and,
when duly and validly executed by the Trustee in accordance with the Pooling and
Servicing Agreement, will be validly issued and outstanding and entitled to the
benefits of the Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator or the Seller for the consummation of the transactions contemplated
by the Transaction Documents, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriters pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Loans by the Originator to the Seller,
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 Certificates, nor the execution and delivery of the Transaction
Documents, nor the consummation of any other of the transactions contemplated in
the Transaction Documents nor the fulfillment of the terms of the Certificates,
the Class C Certificates or the Transaction Documents by the Originator will
conflict with, or result in a breach, violation or acceleration of, or
constitute a default under, any term or provision of the Certificate of
Incorporation or Bylaws of the Originator or of any indenture or other agreement
or instrument known to us to which the Originator is a party or by
F-1
<PAGE>
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. Neither the transfer of the Loans by the Seller to the Trustee
acting on behalf of the Trust, nor the assignment of the Seller'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 Certificates, nor the execution and
delivery of the Transaction Documents, nor the consummation of any other of the
transactions contemplated in the Transaction Documents, nor the fulfillment of
the terms of the Certificates, the Class C Certificates or the Transaction
Documents by the Seller will conflict with, or result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of the
Articles of Incorporation or Bylaws of the Seller or of any indenture or other
agreement or instrument known to us to which the Seller is a party or by which
it is bound, or result in a violation of, or contravene the terms of any
statute, order or regulation, applicable to the Seller, of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it.
7. There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Originator or the Seller before any court, administrative agency or other
tribunal (A) asserting the invalidity of the Transaction Documents, the
Certificates, the Class C Certificates, 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 Certificates
or the consummation of any of the transactions contemplated by the Transaction
Documents, (C) which is likely materially and adversely to affect the
performance by the Originator or the Seller of its obligations under, or the
validity or enforceability of, the Transaction Documents, the Certificates or
the Class C Certificates, or (D) seeking adversely to affect the federal income
tax attributes of the Certificates or the Class C Certificates described in the
Prospectus and the Prospectus Supplement under the heading "Federal Income Tax
Consequences."
8. 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.
9. Pursuant to the Transfer Agreement the Originator has transferred to
the Seller 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 Seller in and to such Loans, and has delivered the Loan
Files to the Trustee (as the Seller's designee) or its custodian. No filing or
other action, other than the filing of a financing statement on Form UCC-1 with
the Secretary of State of the State of Minnesota identifying the Loans as
collateral and naming the Originator as debtor and the Seller as secured party,
and the filing of continuation statements as required by the Transfer Agreement,
is necessary to perfect as against third parties the assignment of the Loans by
the Originator to the Seller. We have separately provided you with our opinion
concerning whether
F-2
<PAGE>
such assignment could be recharacterized as a pledge rather than a sale in the
event the Originator became a debtor under the United States Bankruptcy Code.
However, in the event such assignment were recharacterized as a pledge securing
a loan from the Seller to the Originator, it is our opinion that the Seller
would be deemed to have a valid and perfected security interest in the 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
Seller'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 Seller 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.
10. Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the Seller's
right, title and interest in the 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 Seller as debtor and the Trustee 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 Seller to the Trustee. We have
separately provided you with our opinion concerning whether such assignment
could be recharacterized as a pledge rather than a sale in the event the Seller
became a debtor under the United States Bankruptcy Code. However, in the event
such assignment were recharacterized as a pledge securing a loan from the
Certificateholders to the Seller, it is our opinion that the Trustee would be
deemed to have a valid and perfected security interest in the 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.
F-3
<PAGE>
11. In reliance upon certain representations and warranties set forth
in the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing on behalf of each of the Master REMIC and Subsidiary REMIC
of a proper election to be taxed as a REMIC, as of the date hereof the Master
REMIC and Subsidiary REMIC created pursuant to the Pooling and Servicing
Agreement will each qualify as a REMIC. Further, the Certificates will evidence
ownership of the "regular interests" in the Master REMIC and the Class C Master
Certificates and Class C Subsidiary Certificates will evidence ownership of the
single class of "residual interest" in the Master REMIC and Subsidiary REMIC
respectively. For Minnesota income and franchise tax purposes, and subject to
the foregoing assumptions, and the provisions of Minnesota law as of the date
hereof, the Trust (excluding the Capitalized Interest Account and the
Pre-Funding Account) will not be subject to tax and the income of the Trust will
be taxable to the holders of interests therein, all in accordance with the
provisions of the Code concerning REMICs. Moreover, ownership of Certificates
will not be a factor in determining whether such owner is subject to Minnesota
income and franchise taxes. Therefore, if the owner of Certificates is not
otherwise subject to Minnesota income or franchise taxes in the State of
Minnesota, such owner will not become subject to such Minnesota taxes solely by
virtue of owning Certificates.
12. The transfer of the Loans and the proceeds thereof by the
Originator to the Seller on the date hereof pursuant to the Transfer Agreement
would not be avoidable as a fraudulent transfer under the Uniform Fraudulent
Transfer Act as in effect in Minnesota on the date hereof (Minn. Stat. ss.ss.
513.41 through 513.51), nor, should the Originator become a debtor under the
United States Bankruptcy Code, as a fraudulent transfer under Section 548 of the
United States Bankruptcy Code (11 U.S.C. ss. 548) as in effect on the date
hereof.
13. The transfer of the Loans and the proceeds thereof by the Seller to
the Trustee on the date hereof pursuant to the Pooling and Servicing Agreement
would not be avoidable as a fraudulent transfer under the Uniform Fraudulent
Transfer Act as in effect in Minnesota on the date hereof (Minn. Stat. ss.ss.
513.41 through 513.51), nor, should the Seller become a debtor under the United
States Bankruptcy Code, as a fraudulent transfer under Section 548 of the United
States Bankruptcy Code (11 U.S.C. ss. 548) as in effect on the date hereof.
F-4
<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 Home Equity Loan Trust 1999-H (the "Trust") created pursuant to the Pooling
and Servicing Agreement dated as of November 1, 1999 among Conseco Finance Corp.
(the "Originator"), 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 "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 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 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 related Loan Files, [(viii) 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), (ix) the Class B-2
Limited Guaranty,] and (x) [all rights of the Seller under the Subsequent
Transfer Agreement dated _________, between the Originator and the Seller] [and]
[(xi)] 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 Certificates.
[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 attached exception list, each Loan File contains
(a) an original promissory note duly endorsed in blank or in the name of the
Trustee, (b) an original or a copy of the mortgage, deed of trust or similar
evidence of a lien on the related improved real estate securing the Loan, (c) an
assignment of the Loan, and the mortgage, deed of trust or similar evidence of a
lien, from the originator (if other than the Originator) to the Originator, (d)
an assignment of the mortgage, deed of trust or similar evidence of a lien, to
the Trustee or in blank, and (e) any extension, modification or waiver
agreement(s). The [Trustee] [Custodian] has not otherwise reviewed the Loans and
Loan Files for compliance with the terms of the Agreement.
G-1
<PAGE>
[If Acknowledgment from Custodian: Undefined capitalized terms used in
this Acknowledgment have the meanings given them in the Pooling and Servicing
Agreement.]
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 _____________, 1999.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By
-----------------------------
[Name]
[Title]
G-2
<PAGE>
EXHIBIT H
FORM OF CERTIFICATE OF SERVICING OFFICER
CONSECO FINANCE CORP.
The undersigned certifies that he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of November 1, 1999 among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Home Equity Loan Trust 1999-H (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 ________________, 1999.
CONSECO FINANCE CORP.
By:
-----------------------
[Name]
[Title]
H-1
<PAGE>
EXHIBIT I
FORM OF CLASS C CERTIFICATE
[MASTER] [SUBSIDIARY]
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES, THE CLASS
B-1 CERTIFICATES AND THE CLASS B-2 CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
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, 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
I-1
<PAGE>
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.
Class C [Master] [Subsidiary] No.
(Subordinate)
Cut-off Date: Percentage Interest:
As defined in the Pooling
and Servicing Agreement
dated November 1, 1999
First Payment Date:
December 15, 1999
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 1999-H
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 Home Equity Loan Trust 1999-H (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 or the Subsequent Cut-off Date). The
Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of November 1, 1999, 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 Class C [Master]
[Subsidiary] Certificate is described in the Agreement and is issued pursuant
and subject to the Agreement. By acceptance of this Class C [Master]
[Subsidiary] Certificate the holder assents to and becomes bound by the
Agreement. To the extent not defined herein, all capitalized terms have the
meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
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 December
1999, so long as the Agreement has not been
I-2
<PAGE>
terminated, by check to the registered Class C [Master] [Subsidiary]
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 A
Distribution Amount, (ii) the Class MF-1 and Class MV-1 Distribution Amounts,
(iii) the Class MF-2 and Class MV-2 Distribution Amounts, (iv) the Class BF-1
Distribution Amount, (v) the Class B-2 Distribution Amount, (vi) the Monthly
Servicing Fee with respect to the Loans, (vii) any Extra Principal Distribution
Amount and any Additional Principal Distribution Amount, (viii) amounts to
reimburse the Class C Certificateholders for reimbursable expenses incurred by
them, (ix) amounts to reimburse the Servicer or the Trustee, as applicable, for
prior Advances with respect to the Loans, (x) amounts necessary to reimburse the
Originator for any previous unreimbursed Class B-2 Guaranty Payments, (xi) the
Class B-2 Guaranty Fee, and (xii) any Class P Distribution Amount. The final
scheduled Payment Date of this Class C [Master] [Subsidiary] Certificate is
November 15, 2029 or the next succeeding Business Day if such November 15 is not
a Business Day.
The Class C [Master] [Subsidiary] Certificateholder, by its acceptance
of this Certificate, agrees that it will look solely to the funds in the
Certificate Account to the extent available for distribution to the Class C
[Master] [Subsidiary] Certificateholder as provided in the Agreement for payment
hereunder and that the Trustee in its individual capacity is not personally
liable to the Class C [Master] [Subsidiary] Certificateholder for any amounts
payable under this Certificate or the Agreement or, except as expressly provided
in the Agreement, subject to any liability under the Agreement. By acceptance of
this Certificate, the Class C [Master] [Subsidiary] 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 Class C [Master] [Subsidiary] Certificate does not purport to
summarize the Agreement and reference is made to the Agreement for information
with respect to the interests,
I-3
<PAGE>
rights, benefits, obligations, proceeds and duties evidenced hereby and the
rights, duties and immunities of the Trustee. Copies of the Agreement and all
amendments thereto will be provided to any Class C [Master] [Subsidiary]
Certificateholders 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 [Master] [Subsidiary] Certificate is
registrable in the Certificate Register of the Certificate Registrar upon
surrender of this Class C [Master] [Subsidiary] 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 [Master] [Subsidiary] Certificate evidencing the same Class C
[Master] [Subsidiary] Certificate will be issued to the designated transferee or
transferees.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Class C [Master] [Subsidiary] 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 [Master] [Subsidiary] Certificate, by
acceptance hereof, agrees that, in accordance with the requirements of Section
860D(b)(1) of the Code, the federal tax return of the Trust for its first
taxable year shall provide that the 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 [Master] [Subsidiary] Certificate shall be the
"residual interest" in the REMIC. In addition, the holder of this Class C
[Master] [Subsidiary] Certificate, by acceptance hereof, (i) agrees to file tax
returns consistent with and in accordance with any elections, decisions or other
reports made or filed with regard to federal, state or local taxes on behalf of
the 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.
I-4
<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: HOME EQUITY LOAN TRUST 1999-H
------------------
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 1999-H, 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.
The undersigned certifies that [s]he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Originator"), and that as such [s]he is duly
authorized to execute and deliver this certificate on behalf of the Originator
pursuant to Sections 3.06 and 8.05 of the Pooling and Servicing Agreement (the
"Agreement") dated as of November 1, 1999 among the Originator, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Home Equity Loan Trust 1999-H (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
Originator 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
Originator.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _______________, ____.
CONSECO FINANCE CORP.
By:
--------------------------
[Name]
[Title]
J-1-1
<PAGE>
EXHIBIT J-2
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
CONSECO FINANCE CORP.
The undersigned certifies that [s]he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Originator"), and that as such [s]he is duly
authorized to execute and deliver this certificate on behalf of the Originator
pursuant to Sections 3.06(b) and 8.05 of the Pooling and Servicing Agreement
(the "Agreement") dated as of November 1, 1999 among the Originator, Conseco
Finance Securitizations Corp. and U.S. Bank Trust National Association, as
Trustee of Home Equity Loan Trust 1999-H (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 requirements of Section 3.06(b) of the Agreement have been met
with respect to each such Eligible Substitute Loan.
[5. There has been deposited in the Certificate Account the amounts
listed on the schedule attached hereto as the amount by which the Scheduled
Principal Balance of each Replaced Loan exceeds the Scheduled Principal Balance
of each Loan being substituted therefor.]
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of ______________ , ____.
CONSECO FINANCE CORP.
By:
--------------------------
[Name]
[Title]
J-2-1
<PAGE>
EXHIBIT J-3
FORM OF CERTIFICATE REGARDING SUBSTITUTION FOR PREPAID LOANS
CONSECO FINANCE SECURITIZATIONS CORP.
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Seller"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Seller pursuant to Section 2.06 of the Pooling and Servicing Agreement (the
"Agreement") dated as of November 1, 1999 among the Seller, Conseco Finance
Corp. and U.S. Bank Trust National Association, as Trustee of Home Equity Loan
Trust 1999-H (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 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 _____________, 1999.
CONSECO FINANCE SECURITIZATIONS 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 1999-H, 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.
K-1
<PAGE>
3. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The Purchaser has reviewed
the Prospectus Supplement dated November 17, 1999, to the Prospectus dated
November 17, 1999 (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-1
LIST OF INITIAL AND ADDITIONAL FIXED RATE LOANS
[To Be Supplied]
L-1-1
<PAGE>
EXHIBIT L-2
LIST OF INITIAL AND ADDITIONAL GROUP I ADJUSTABLE RATE LOANS
[To Be Supplied]
L-2-1
<PAGE>
EXHIBIT L-3
LIST OF INITIAL AND ADDITIONAL GROUP II ADJUSTABLE RATE LOANS
[To Be Supplied]
L-3-1
<PAGE>
NEW
EXHIBIT M
FORM OF MONTHLY REPORT
CERTIFICATES FOR HOME EQUITY LOANS, SERIES 1999-H
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 Fixed Rate Amount, if any
(Post-Funding Payment Date) _______
(g) minus Group I ARM Formula Principal
Distribution Amount and Group II ARM Formula
Principal Distribution Amount _______
3. Group I ARM Formula Principal
Distribution Amount _______
(a) Scheduled principal _______
(b) Principal Prepayments _______
(c) Liquidated Loans _______
(d) Repurchases _______
(e) Pre-Funded Group I ARM Amount, if any
(Post-Funding Payment Date) _______
4. Group II ARM Formula Principal
Distribution Amount _______
(a) Scheduled principal _______
(b) Principal Prepayments _______
(c) Liquidated Loans _______
M-1
<PAGE>
(d) Repurchases _______
(e) Pre-Funded Group II ARM Amount, if any
(Post-Funding Payment Date) _______
(f) minus Group I ARM Formula Principal
Distribution Amount _______
5. LIBOR _______
6. Available Funds Pass-Through Rate _______
7. Class A-IO Notional Principal Amount _______
Class A Certificates
- --------------------
Interest
8. Aggregate current interest
(a) Class AV-1 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR
plus 0.32%, or (b) the Available Funds
Pass-Through Rate, but in nocase more than
14.0%) _______
(b) Class AV-1 Interest _______
(c) Class AV-2 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR
plus 0.39%, or (b) the Available Funds
Pass-Through Rate, but in no
case more than 14.0%) _______
(d) Class AV-2 Interest _______
(e) Class AF-1 Pass-Through Rate (6.45%) _______
(f) Class AF-l Interest _______
(g) Class AF-2 Pass-Through Rate (6.84%) _______
(h) Class AF-2 Interest _______
(i) Class AF-3 Pass-Through Rate (7.03%) _______
(j) Class AF-3 Interest _______
(k) Class AF-4 Pass-Through Rate (7.32%) _______
(l) Class AF-4 Interest _______
(m) Class AF-5 Pass-Through Rate (7.60% or 8.10%) _______
(n) Class AF-5 Interest _______
(o) Class AF-6 Pass-Through Rate (7.21%) _______
(p) Class AF-6 Interest _______
(q) Class A-IO Pass-Through Rate (7.00%) _______
(r) Class A-IO Interest _______
M-2
<PAGE>
9. Amount applied to Unpaid Class A Interest Shortfall _______
(a) Class AV-1 _______
(b) Class AV-2 _______
(c) Class AF-l _______
(d) Class AF-2 _______
(e) Class AF-3 _______
(f) Class AF-4 _______
(g) Class AF-5 _______
(h) Class AF-6 _______
(i) Class A-IO _______
10. Remaining Unpaid Class A Interest Shortfall _______
(a) Class AV-1 _______
(b) Class AV-2 _______
(c) Class AF-l _______
(d) Class AF-2 _______
(e) Class AF-3 _______
(f) Class AF-4 _______
(g) Class AF-5 _______
(h) Class AF-6 _______
(i) Class A-IO _______
Class M-1 Certificates
- ----------------------
11. Amount Available less all preceding
distributions and less Prepayment Charges _______
Interest on Class M-1 Adjusted Principal Balance
12. (a) Class MF-1 Adjusted Principal Balance _______
(b) Class MV-1 Adjusted Principal Balance _______
13. Current Interest
(a) Class MF-1 Pass-Through Rate (8.10%) _______
(b) Class MF-1 Interest _______
(c) Class MV-1 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR
plus 0.69%, or (b) the Available Funds
Pass-Through Rate, but in no
case more than 14.0%) _______
(d) Class MV-1 Interest
14. (a) Amount applied to Unpaid Class MF-1
Interest Shortfall _______
(b) Amount applied to Unpaid Class MV-1
M-3
<PAGE>
Interest Shortfall _______
15. (a) Remaining Unpaid Class MF-1
Interest Shortfall _______
(b) Remaining Unpaid Class MV-1
Interest Shortfall _______
Class M-2 Certificates
- ----------------------
16. Amount Available less all preceding
distributions and less Prepayment Charges _______
Interest on Class M-2 Adjusted Principal Balance
17. (a) Class MF-2 Adjusted Principal Balance _______
(b) Class MV-2 Adjusted Principal Balance _______
18. Current Interest
(a) Class MF-2 Pass-Through Rate (floating rate
equal to the Adjusted Weighted Average Loan
Rate, but in no event greater than 9.29%) _______
(b) Class MF-2 Interest _______
(c) Class MV-2 Pass-Through Rate (floating rate
equal to the Adjusted Weighted Average Loan
Rate, but in no event greater than 1.40%) _______
(d) Class MV-2 Interest _______
19. (a) Amount applied to Unpaid Class MF-2
Interest Shortfall _______
(b) Amount applied to Unpaid Class MV-2
Interest Shortfall _______
20. (a) Remaining Unpaid Class MF-2
Interest Shortfall _______
(b) Remaining Unpaid Class MV-2
Interest Shortfall _______
Class B-1 Certificates
- ----------------------
21. Amount Available less all preceding
distributions and less Prepayment Charges _______
Interest on Class B-1 Adjusted Principal Balance
M-4
<PAGE>
22. (a) Class BF-1 Adjusted Principal Balance _______
(b) Class BV-1 Adjusted Principal Balance _______
23. Current Interest
(a) Class BF-1 Pass-Through Rate (floating rate
equal to the Adjusted Weighted Average Loan
Rate, but in no event greater than 10.00%)
(b) Class B-1 Interest _______
(c) Class BV-1 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR
plus 3.00%, or (b) the Available Funds
Pass-Through Rate, but in no
case more than 14.0%) _______
24. (a) Amount applied to Unpaid Class BF-1
Interest Shortfall _______
(b) Amount applied to Unpaid Class BV-1
Interest Shortfall _______
25. (a) Remaining Unpaid Class BF-1
Interest Shortfall _______
(b) Remaining Unpaid Class BV-1
Interest Shortfall _______
Class P Certificates
26. 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
27. Trigger Event: Fixed Rate Certificates
(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 35% of the
Senior Enhancement Percentage
for the Fixed Rate Loans) _______
M-5
<PAGE>
(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 Fixed
Rate Loans may not exceed 3.80%
from December 1, 2002 to November 30,
1003, 4.51% from December 1, 2003 to
November 20, 2004, 4.75% from
December 1, 2004 to November 30,
1006, and 5.25% thereafter) _______
28. Senior Enhancement Percentage: Fixed Rate Certificates
(a fraction, expressed as a percentage: _______
(a) the numerator of which is the sum of (i) the
Class MF-1, MF-2 and Class BF-1 Adjusted
Principal Balances, (ii) the sum of the Class
B-2 Principal Balance multiplied by a percentage
obtained by dividing the aggregate Scheduled
Principal Balances of the Fixed Rate Loans by
the Pool Scheduled Principal Balance, and
(iii) the Over-Collateralization Amount for
the Fixed Rate Certificates _______
(b) the denominator of which is the aggregate
Scheduled Principal Balances of the Fixed Rate
Loans on such Payment Date) _______
29. Trigger Event: Adjustable Rate Certificates
(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 35% of the
Senior Enhancement Percentage for the
Adjustable Rate Loans) _______
(b) Cumulative Realized Losses Test
(i) Cumulative Realized Losses for
current Payment Date _______
(ii) Cumulative Realized Losses Ratio
M-6
<PAGE>
(Losses as a percentage of Cut-off
Date Principal Balances of Adjustable
Rate Loans may not exceed 4.40% from
December 1, 2002 to November 30, 2003,
5.23% from December 1, 2003 to
November 30, 2004, 5.50% from
December 1, 2004 to November 30, 2006,
and 6.00% thereafter) _______
30. Senior Enhancement Percentage: Adjustable Rate
Certificates (a fraction, expressed as a percentage: _______
(a) the numerator of which is the sum of (i) the
Class MV-1, Class MV-2 and Class BV-1 Adjusted
Principal Balances, (ii) the sum of the Class
B-2 Principal Balance multiplied by a percentage
obtained by dividing the aggregate Scheduled
Principal Balances of the Adjustable Rate
Loans by the Pool Scheduled Principal Balance,
and (iii) the Over-Collateralization Amount
for the Adjustable Rate Certificates _______
(b) the denominator of which is the aggregate
Scheduled Principal Balances of the Adjustable
Rate Loans on such Payment Date) _______
Class A Certificates
31. Amount Available less all preceding
distributions _______
32. Class A principal distribution:/1/
(a) Class AV-1: Class AV-1 Formula Principal
Distribution Amount _______
- --------
/1/ If a Class A Principal Deficiency Amount exists, the remaining Amount
Available is to be distributed pro rata to each Class of Class A Certificates
(other than the Class A-IO Certificates) based on the Class Principal Balance of
each such Class. If no Class A Principal Deficiency Amount exists, but the
remaining Amount Available is less than the Class A Formula Principal
Distribution Amount, then such remaining Amount Available is to be distributed
pro rata to each Class of Class A Certificates (other than the Class A-IO
Certificates) based on the amount distributable had such remaining Amount
Available not been less than the Class A Formula Principal Distribution Amount.
Otherwise, the Class AV-1 Formula Principal Distribution Amount, the Class AV-2
Formula Principal Distribution Amount and the Class AF Formula Principal
Distribution Amount are to be distributed as described in this item 32.
M-7
<PAGE>
(b) Class AV-2: Class AV-2 Formula Principal
Distribution Amount _______
(c) Class AF Formula Principal
Distribution Amount:
(i) Class AF-6
* Class AF-6 Lockout Percentage _______
* Class AF-6 Lockout Principal
Distribution Amount _______
(ii) Class AF-1 _______
(iii) Class AF-2 _______
(iv) Class AF-3 _______
(v) Class AF-4 _______
(vi) Class AF-5 _______
(vii) Class AF-6 _______
33. (a) Class AV-1 Principal Balance _______
(b) Class AV-2 Principal Balance _______
(c) Class AF-1 Principal Balance _______
(d) Class AF-2 Principal Balance _______
(e) Class AF-3 Principal Balance _______
(f) Class AF-4 Principal Balance _______
(g) Class AF-5 Principal Balance _______
(h) Class AF-6 Principal Balance _______
(i) Class A-IO Notional Principal Amount _______
34. (a) Amount, if any, by which Class AV-1 Formula
Principal Distribution Amount exceeds Class
AV-1 Principal Distribution Amount _______
(b) Amount, if any, by which Class AV-2 Formula
Principal Distribution Amount exceeds Class
AV-2 Principal Distribution Amount _______
(c) Amount, if any, by which Class AF-[ ] Formula
Principal Distribution Amount exceeds Class
AF-[ ] Principal Distribution Amount _______
Class M-1 Certificates
- ----------------------
35. Amount Available less all preceding
distributions _______
Principal
36. (a) Class MF-1 principal distribution _______
(b) Class MV-1 principal distribution _______
M-8
<PAGE>
37. (a) Class MF-1 Principal Balance _______
(b) Class MV-1 Principal Balance _______
38. (a) Amount, if any, by which Class MF-1 Formula
Principal Distribution Amount exceeds Class
MF-1 Principal Distribution Amount _______
(b) Amount, if any, by which Class MV-1 Formula
Principal Distribution Amount exceeds Class
MV-1 Principal Distribution Amount _______
Class M-2 Certificates
- ----------------------
39. Amount Available less all preceding
distributions _______
Principal
40. (a) Class MF-2 principal distribution _______
(b) Class MV-2 principal distribution _______
41. (a) Class MF-2 Principal Balance _______
(b) Class MV-2 Principal Balance _______
42. (a) Amount, if any, by which Class MF-2 Formula
Principal Distribution Amount exceeds Class
MF-2 Principal Distribution Amount _______
(b) Amount, if any, by which the Class MV-2
Formula Principal Distribution Amount exceeds
the Class MV-2 Principal Distribution Amount _______
Class B-1 Certificates
- ----------------------
43. Amount Available less all preceding
distributions _______
Principal
44. (a) Class BF-1 principal distribution _______
(b) Class BV-1 principal distribution _______
45. (a) Class BF-1 Principal Balance _______
(b) Class BV-1 Principal Balance _______
46. (a) Amount, if any, by which Class BF-1 Formula Principal
M-9
<PAGE>
Distribution Amount exceeds Class BF-1
Principal Distribution Amount _______
(b) Amount, if any, by which Class BV-1 Formula
Principal Distribution Amount exceeds Class
BV-1 Principal Distribution Amount _______
Class M-1 Certificates
- ----------------------
47. Amount Available less all preceding
distributions _______
Liquidation Loss Interest
48. Amount applied to Class M-1 Liquidation Loss Interest
Amount
(a) Class MF-1 _______
(b) Class MV-1 _______
49. Class M-1 Liquidation Loss Interest Shortfall
(a) Class MF-1 _______
(b) Class MV-1 _______
50. Amount applied to Unpaid Class M-1 Liquidation Loss
Interest Shortfall
(a) Class MF-1 _______
(b) Class MV-1 _______
51. Remaining Unpaid Class M-1 Liquidation Loss
Interest Shortfall
(a) Class MF-1 _______
(b) Class MV-1 _______
Class M-2 Certificates
- ----------------------
52. Amount Available less all preceding
distributions _______
Liquidation Loss Interest
53. Amount applied to Class M-2 Liquidation Loss Interest
Amount
(a) Class MF-2 _______
(b) Class MV-2 _______
54. Class M-2 Liquidation Loss Interest Shortfall
M-10
<PAGE>
(a) Class MF-2 _______
(b) Class MV-2 _______
55. Amount applied to Unpaid Class M-2 Liquidation Loss
Interest Shortfall
(a) Class MF-2 _______
(b) Class MV-2 _______
56. Remaining Unpaid Class M-2 Liquidation Loss
Interest Shortfall
(a) Class MF-2 _______
(b) Class MV-2 _______
Class B-1 Certificates
- ----------------------
57. Amount Available less all preceding
distributions _______
Liquidation Loss Interest
58. Amount applied to Class B-1 Liquidation Loss Interest
Amount
(a) Class BF-1 _______
(b) Class BV-1 _______
59. Class B-1 Liquidation Loss Interest Shortfall
(a) Class BF-1 _______
(b) Class BV-1 _______
60. Amount applied to Unpaid Class B-1 Liquidation Loss
Interest Shortfall
(a) Class BF-1 _______
(b) Class BV-1 Interest Shortfall _______
61. Remaining Unpaid Class B-1 Liquidation Loss
Interest Shortfall
(a) Class BF-1 _______
(b) Class BV-1 _______
Class B-2 Certificates
- ----------------------
62. Amount Available less all preceding
distributions _______
M-11
<PAGE>
Interest
63. Current interest
(a) Class B-2 Pass-Through Rate (floating rate
equal to the Adjusted Weighted Average Loan
Rate, but in no event greater than 10.00%) _______
(b) Class B-2 Interest _______
64. Amount applied to Unpaid Class
B-2 Interest Shortfall _______
65. Remaining Unpaid Class B-2
Interest Shortfall _______
Principal
66. Class B-2 principal distribution _______
67. Amount, if any, by which Class B-2
Formula Distribution Amount plus Class B-2
Liquidation Loss Principal Amount exceeds
Class B-2 Distribution Amount _______
68. Class B-2 Guaranty Payment _______
69. Class B-2 Principal Balance _______
Class AV-1 Certificates
- -----------------------
70. Amount Available less all preceding
distributions _______
Available Funds Cap Carryover Amount
71. (a) Class AV-1 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class AV-1
Available Funds Cap Carryover Amount _______
(c) Class AV-1 Available Funds Cap Carryover Amount
remaining unpaid _______
Class AV-2 Certificates
- -----------------------
72. Amount Available less all preceding
M-12
<PAGE>
distributions _______
Available Funds Cap Carryover Amount
73. (a) Class AV-2 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class AV-2 Available Funds
Cap Carryover Amount _______
(c) Class AV-2 Available Funds Cap Carryover
Amount remaining unpaid _______
Class MV-1 Certificates
- -----------------------
74. Amount Available less all preceding distributions _______
Available Funds Cap Carryover Amount
75. (a) Class MV-1 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class MV-1 Available Funds
Cap Carryover Amount _______
(c) Class MV-1 Available Funds Cap Carryover
Amount remaining unpaid _______
Class MV-2 Certificates
- -----------------------
76. Amount Available less all preceding distributions _______
Available Funds Cap Carryover Amount
77. (a) Class MV-2 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class MV-2 Available Funds
Cap Carryover Amount _______
(c) Class MV-2 Available Funds Cap Carryover
Amount remaining unpaid _______
Class BV-1 Certificates
- -----------------------
78. Amount Available less all preceding distributions
Available Funds Cap Carryover Amount
79. (a) Class BV-1 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class BV-1 Available Funds Cap
Carryover Amount _______
(c) Class BV-1 Available Funds Cap Carryover
M-13
<PAGE>
Amount remaining unpaid _______
80. Servicer
(a) Monthly Servicing Fee (if Originator or
affiliate is Servicer) _______
(b) Reimbursement for unreimbursed Advances _______
Extra Principal Distribution Amount
81. (a) (i) Class AV-1 _______
(ii) Class AV-2 _______
(iii) Class AF-[ ] _______
(b) (i) Class MF-1 _______
(ii) Class MV-1 _______
(c) (i) Class MF-2 _______
(ii) Class MV-2 _______
(d) (i) Class BF-1 _______
(ii) Class BV-1 _______
(e) Class B-2 _______
(f) Class P __________
82. Additional Principal Distribution Amount
(a) Class AF-6 Certificates until paid in full _________
(b) Class AF Certificates and Class AV Certificates,
pro rata based on the Class Principal Balance
of each Class of Class AF and Class AV
Certificates until paid in full _______
(c) Class M-1, Class M-2, Class B-1 and Class B-2
Certificates, pro rata based on the Class
Principal Balance of each Class until paid
in full _______
Class A, Class M and Class B Certificates
- ------------------------------------------
83. Pool Scheduled Principal Balance _______
(a) Fixed Rate Loans _______
(b) Group I Adjustable Rate Loans _______
(c) Group II Adjustable Rate Loans _______
84. Pool Factor _______
85. Loans Delinquent:
30 - 59 days
M-14
<PAGE>
Fixed Rate __________
Group I Adjustable Rate __________
Group II Adjustable Rate __________
60 or more days
Fixed Rate __________
Group I Adjustable Rate __________
Group II Adjustable Rate __________
86. Principal Balance of Defaulted Loans
Fixed Rate __________
Group I Adjustable Rate __________
Group II Adjustable Rate __________
87. Number of Liquidated Loans and
Net Liquidation Loss __________
Fixed Rate __________
Group I Adjustable Rate __________
Group II Adjustable Rate __________
88. Number of Loans Remaining
Fixed Rate __________
Group I Adjustable Rate __________
Group II Adjustable Rate __________
89. Pre-Funded Group I ARM Amount __________
90. Pre-Funded Group II ARM Amount __________
91. Pre-Funded Fixed Rate Amount __________
92. Reimbursement of Class C Certificateholder expenses __________
Guarantor
93. Class B-2 Guaranty Fee __________
Class P Certificates
- --------------------
94. Class P Principal Distribution __________
M-15
<PAGE>
95. Class P Principal Balance __________
Class C Master Certificates
- ---------------------------
96. Class C Master 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-16
<PAGE>
Exhibit M-1 Appendix
Principal Distribution Amount Definitions
"Class AF Formula Principal Distribution Amount" means, for any Payment
Date, the lesser of:
(a) the Class AF Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a
Trigger Event exists, the Formula Principal Distribution Amount; and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the Class AF
Principal Balance over (B) the lesser of (x) 62.76% of the aggregate
Scheduled Principal Balances of the Fixed Rate Loans or (y) the
aggregate Scheduled Principal Balances of the Fixed Rate Loans minus
$9,000,000.
"Class AV-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class AV-1 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a
Trigger Event exists, the Group I ARM Formula Principal Distribution
Amount; and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the lesser of (A) the Group I ARM
Formula Principal Distribution Amount and (B) the Class AV Formula
Principal Distribution Amount.
"Class AV-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class AV-2 Principal Balance and
(b) (i) if the Payment Date is before the Stepdown Date or a
Trigger Event exists, the Group II ARM Formula Principal Distribution
Amount; and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the lesser of (A) the Group II ARM
Formula Principal Distribution Amount and (B) the Class AV Formula
Principal Distribution Amount minus the Class AV-1 Formula Principal
Distribution Amount.
"Class MF-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of
M-17
<PAGE>
(a) the Class MF-1 Principal Balance and
(b) (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 on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the sum of the
Class AF and Class MF-1 Principal Balances over (B) the lesser of (x)
73.66% of the aggregate Scheduled Principal Balances of the Fixed Rate
Loans or (y) the aggregate Scheduled Principal Balances of the Fixed
Rate Loans minus $9,000,000.
"Class MV-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MV-1 Principal Balance and
(b) (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 sum
of the Group I ARM Formula Principal Distribution Amount and the Group
II ARM Formula Principal Distribution Amount less the Class AV Formula
Principal Distribution Amount on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the sum of the
Class AV and Class MV-1 Principal Balances over (B) the lesser of (x)
70.26% of the aggregate Scheduled Principal Balances of the Adjustable
Rate Loans or (y) the aggregate Scheduled Principal Balances of the
Adjustable Rate Loans minus $4,500,000.
"Class MF-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MF-2 Principal Balance and
(b) (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 and Class MF-1
Formula Principal Distribution Amounts on such Payment Date; and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the sum of the
Class AF, Class MF-1 and Class MF-2 Principal Balances over (B) the
lesser of (x) 83.76% of the aggregate Scheduled Principal Balances of
the Fixed Rate Loans or (y) the aggregate Scheduled Principal Balances
of the Fixed Rate Loans minus $9,000,000.
M-18
<PAGE>
"Class MV-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class MV-2 Principal Balance and
(b) (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 sum
of the Group I ARM Formula Principal Distribution Amount and the Group
II ARM Formula Principal Distribution Amount less the Class AV and
Class MV-1 Formula Principal Distribution Amounts on such Payment Date;
and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the sum of the
Class AV, Class MV-1 and Class MV-2 Principal Balances over (B) the
lesser of (x) 81.72% of the aggregate Scheduled Principal Balances of
the Adjustable Rate Loans or (y) the aggregate Scheduled Principal
Balances of the Adjustable Rate Loans minus $4,500,000.
"Class BF-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class BF-1 Principal Balance and
(b) (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 any Class AF, Class MF-1 and
Class MF-2 Formula Principal Distribution Amounts on such Payment Date;
and
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the sum of the
Class AF, Class MF-1, Class MF-2 and Class BF-1 Principal Balances over
(B) the lesser of (x) 90.22% of the aggregate Scheduled Principal
Balances of the Fixed Rate Loans or (y) the aggregate Scheduled
Principal Balances of the Fixed Rate Loans minus $9,000,000.
"Class BV-1 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(a) the Class BV-1 Principal Balance and
(b) (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 sum
of the Group I ARM Formula Principal Distribution Amount and the Group
II ARM Formula Principal Distribution Amount less the Class AV, Class
MV-1 and Class MV-2 Formula Principal Distribution Amounts on such
Payment Date; and
M-19
<PAGE>
(ii) if the Payment Date is on or after the Stepdown
Date and no Trigger Event exists, the excess of (A) the sum of the
Class AV, Class MV-1, Class MV-2 and Class BV-1 Principal Balances over
(B) the lesser of (x) 90.22% of the aggregate Scheduled Principal
Balances of the Adjustable Rate Loans or (y) the aggregate Scheduled
Principal Balances of the Adjustable Rate Loans minus $4,500,000.
"Class B-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of
(a) the Class B-2 Principal Balance and
(b) (i) if the Payment Date is before the Additional Principal
Entitlement Date, the excess of (A) the sum of the Group I ARM and
Group II ARM Formula Principal Distribution Amounts and the Formula
Principal Distribution Amount over (B) the sum of the Class A, Class
M-1, Class M-2, and Class B-1 Formula Principal Distribution Amounts on
such Payment Date; and
(ii) if the Payment Date is on or after the
Additional Principal Entitlement Date, the excess of (A) the sum of the
Class A, Class M-1, Class M-2 and Class B Principal Balances over (B)
the lesser of (x) 97% of the aggregate Scheduled Principal Balances of
all Loans or (y) the Scheduled Principal Balances of all Loans minus
$13,500,000.
"Stepdown Date" means:
(a) with respect to the Fixed Rate Certificates, the
earlier to occur of:
(i) the later to occur of (A) the Payment Date in
December 2002 and (B) the first Payment Date on which the
Class AF Principal Balance is less than or equal to 62.76% of
the aggregate Scheduled Principal Balances of the Fixed Rate
Loans and
(ii) the Payment Date on which the Class AF Principal
Balance is reduced to zero; and
(b) with respect to the Adjustable Rate Certificates, the
earlier to occur of
(i) the later to occur of (A) the Payment Date in
December 2002 and (B) the first Payment Date on which the
Class AV Principal Balance is less than or equal to 56.42% of
the aggregate Scheduled Principal Balances of the Adjustable
Rate Loans and
(ii) the Payment Date on which the Class AV Principal
Balance is reduced to zero.
M-20
<PAGE>
EXHIBIT N
FORM OF ADDITION NOTICE
___________, 1999
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
November 1, 1999, 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 1999-H
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:
Fixed Rate: $
---------
Group I Adjustable Rate: $
---------
Group II Adjustable Rate: $
---------
N-1
<PAGE>
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:
cc: Standard & Poor's Ratings Services
Fitch IBCA Inc.
Duff & Phelps Credit Rating Co.
N-2
<PAGE>
EXHIBIT O
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement") dated as of November 1, 1999, among Conseco Finance
Corp. (the "Originator"), Conseco Finance Securitizations Corp. (the "Seller")
and U.S. Bank Trust National Association as Trustee (the "Trustee"), the Seller
does hereby transfer, assign, set over and otherwise convey, without recourse,
to Home Equity Loan Trust 1999-H, created by the Pooling and Servicing
Agreement, to be held in trust as provided in the Pooling and Servicing
Agreement, (i) all right, title and interest in the home equity loans identified
in the List of Loans attached hereto as Exhibit A (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 on or 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, (vii) all rights of the Seller
under the Subsequent Transfer Agreement dated __________ between the Seller and
the Originator, and (viii) all proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the Seller contained in Section 2.03 and Article III
of the Pooling and Servicing Agreement and no others. All undefined capitalized
terms used in this Assignment have the meanings given them in the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer
Instrument to be duly executed this ________ day of ___________, 1999.
CONSECO FINANCE SECURITIZATIONS CORP.
By:
---------------------------------
Name:
Title:
O-1
<PAGE>
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
CONSECO FINANCE SECURITIZATIONS CORP.
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Seller"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Seller in connection with the Pooling and Servicing Agreement dated as of
November 1, 1999 (the "Agreement") among the Seller, Conseco Finance 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 of the Agreement are true and correct and all
representations and warranties in Section 3.03 of the Agreement are true to the
best of [his][her] knowledge.
3. All conditions precedent to the sale of the Subsequent Loans to the
Trust under Section 2.03 of the Pooling and Servicing Agreement have been
satisfied.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of _______________, 1999.
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.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS NOVEMBER 30, 1999. BASED
ON THE OID REGULATIONS AND ASSUMING (SOLELY FOR THE PURPOSES OF APPLYING THE OID
RULES TO THIS CERTIFICATE) THAT THE FIXED RATE LOANS PREPAY AT THE 125%
PREPAYMENT ASSUMPTION DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATING TO THE
CERTIFICATES ISSUED UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN
AND THAT THE ADJUSTABLE RATE LOANS PREPAY AT THE 30% CPR PREPAYMENT ASSUMPTION
DESCRIBED IN THE PROSPECTUS SUPPLEMENT RELATING TO THE CERTIFICATES ISSUED UNDER
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$_______________ OF OID PER $100 OF ORIGINAL AMOUNT, THE YIELD TO MATURITY IS
_____% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO
MORE THAN $____________ PER $100 OF ORIGINAL PRINCIPAL AMOUNT, COMPUTED UNDER
THE EXACT METHOD. NO REPRESENTATION IS MADE THAT THE FIXED RATE LOANS OR
ADJUSTABLE RATE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION
OR AT ANY OTHER RATE.
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
Q-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.
Class P No. R-1
Cut-off Date: Denomination: $100.00
as defined in the Pooling and
Servicing Agreement dated
November 1, 1999
First Payment Date: Aggregate Denomination
December 15, 1999 of all Class P Certificates: $100.00
Servicer:
Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 1999-H, 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 1999-H,
Class P, issued by Home Equity Loan Trust 1999-H (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
Q-2
<PAGE>
applicable Cut-off Date or Subsequent Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
November 1, 1999, 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 December
1999, 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 November 15, 2029 or the next succeeding Business Day if
such November 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
Q-3
<PAGE>
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.
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<PAGE>
IN WITNESS WHEREOF, Home Equity Loan Trust 1999-H has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: November 30, 1999 HOME EQUITY LOAN TRUST 1999-H
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------
Authorized Officer
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<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________________ the within Certificate for Home Equity Loans,
Series 1999-H, 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-6
<PAGE>
EXHIBIT 4.2
TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
CONSECO FINANCE CORP.
Seller
dated as of
November 1, 1999
<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 .......................................3
SECTION 2.1. Conveyance of the Initial Loans and the Initial Other
Conveyed Property ..................................3
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 Transfer of Loans ......................................9
SECTION 4.2. Costs and Expenses ....................................10
SECTION 4.3. Indemnification .......................................10
ARTICLE V - REPURCHASES ......................................................10
SECTION 5.1. Repurchase of Loans Upon Breach of Warranty ...........10
SECTION 5.2. Reassignment of Purchased Loans .......................11
SECTION 5.3. Waivers ...............................................11
ARTICLE VI - MISCELLANEOUS ...................................................12
SECTION 6.1. Liability of CFC ......................................12
SECTION 6.2. Merger or Consolidation of CFC or CFSC ................12
SECTION 6.3. Limitation on Liability of CFC and Others .............12
SECTION 6.4. Amendment .............................................13
SECTION 6.5. Notices ...............................................13
SECTION 6.6. Merger and Integration ................................14
SECTION 6.7. Severability of Provisions ............................14
SECTION 6.8. Intention of the Parties ..............................14
SECTION 6.9. Governing Law .........................................14
SECTION 6.10. Counterparts ..........................................14
SECTION 6.11. Conveyance of the Initial Loans and the Initial
Other Conveyed Property to the Trust ..............15
SECTION 6.12. Nonpetition Covenant ..................................15
i
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SCHEDULES
Schedule A -- Schedule of Initial and Additional Loans
EXHIBITS
Exhibit A -- Form of Subsequent Transfer Agreement
ii
<PAGE>
TRANSFER AGREEMENT
------------------
THIS TRANSFER AGREEMENT, dated as of November 1, 1999, 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 home equity loans specified in the
Schedule of Initial and Additional Loans attached hereto as Schedule A (the
"Initial 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 February 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 IDEFINITIONS
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 November 1, 1999,
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 November 30, 1999.
"Initial Other Conveyed Property" means all monies at any time paid or
payable on the Initial 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
<PAGE>
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 Loans, any and all other documents or
electronic records that CFC keeps on file in accordance with its customary
procedures relating to the Initial 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 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 November 1, 1999, 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 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.
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"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, and any successor trustee
appointed and acting pursuant to the Pooling and Servicing Agreement.
"Trust Fund" 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.
ARTICLE II
CONVEYANCE OF THE INITIAL LOANS
AND THE INITIAL OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Initial 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 Loans and the Initial Other Conveyed Property. It
is the intention of CFC and CFSC that the transfer and assignment
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<PAGE>
contemplated by this Agreement shall constitute a sale of the Initial Loans
and the Initial Other Conveyed Property from CFC to CFSC, conveying good
title thereto free and clear of any liens, and the Initial 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 Loans. Simultaneously with the
conveyance of the Initial 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
$_____________ by wire transfer of immediately available funds (representing the
proceeds to CFSC from the sale of the Initial Loans after (i) deducting expenses
of $_________ 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:
(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;
4
<PAGE>
(iv) as of each Subsequent Transfer Date, as evidenced by delivery of
the Subsequent Transfer Agreement, neither CFC nor CFSC shall be insolvent
nor shall they have been made insolvent by such transfer nor shall they be
aware of any pending insolvency;
(v) such transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC and the Subsidiary
REMIC) or the Certificateholders or Class C Certificateholders;
(vi) the Pre-Funding Period shall not have ended; and
(viii) No Subsequent Loan will have a Combined LTV greater than 100%.
(c) CFC covenants to transfer to CFSC pursuant to paragraph (a) above
Subsequent Loans with aggregate Scheduled Principal Balances of approximately
equal to $-0-; 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
Loans and the Initial Other Conveyed Property and in transferring the Initial
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 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 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
Loans and the Initial Other Conveyed Property transferred to CFSC.
(c) Due Qualification. CFC is duly qualified to do business as a
foreign corporation and is in good standing, and has obtained all necessary
licenses and
5
<PAGE>
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 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 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 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
6
<PAGE>
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 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 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 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 at all relevant times, and has,
full power, authority and legal right to acquire and own the Initial Loans
and the Initial Other Conveyed Property and to transfer the Initial Loans
and the Initial Other Conveyed Property to the Trust pursuant to the
Pooling 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 Loans or the Initial Other Conveyed Property, (ii) the validity or
enforceability of the Initial 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 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.
7
<PAGE>
(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 Pooling and Servicing Agreement), or violate any law,
order, rule or regulation, applicable to CFSC or its properties, of any
federal or state regulatory body or any court, administrative agency, or
other governmental instrumentality having jurisdiction over CFSC or any of
its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before any
court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the consummation of any of the
transactions 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 Loans and the
Initial Other Conveyed Property hereunder or the transfer of the Initial
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)
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<PAGE>
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.
(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, Fitch (if rated by Fitch)
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,
Fitch 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.
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<PAGE>
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 4.3 shall not terminate upon a Service
Transfer pursuant to Article VII of the Pooling and Servicing Agreement, except
that the obligation of CFC under this Section 4.3 shall not relate to the
actions of any subsequent Servicer after a Service Transfer.
(b) No obligation or liability to any Obligor under any of the 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.
(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
10
<PAGE>
Servicing Agreement or any Subsequent Transfer Agreement to the contrary, the
obligation of CFC under this Section 5.1 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 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.
11
<PAGE>
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, shall execute an agreement of
assumption to perform every obligation of CFC or CFSC, as the case may be, under
this Agreement and each Subsequent Transfer Agreement and, whether or not such
assumption agreement is executed, shall be the successor to CFC or CFSC, as the
case may be, hereunder and under each such Subsequent Transfer Agreement
(without relieving CFC or CFSC of its responsibilities hereunder, if it survives
such merger or consolidation) without the execution or filing of any document or
any further act by any of the parties to this Agreement or each Subsequent
Transfer Agreement. CFC or CFSC shall promptly inform the other party and the
Trustee of such merger, consolidation or purchase and assumption.
Notwithstanding the foregoing, as a condition to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above, (x) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Sections 3.1 and 3.2 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 6.2 and that all conditions precedent, if any, provided for in this
Agreement, or in each Subsequent Transfer Agreement, relating to such
transaction have been complied with, and (z) CFC or CFSC, as applicable, shall
have delivered to the Trustee an Opinion of Counsel, stating that, in the
opinion of such counsel, either (A) all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary to preserve and protect the interest of the Trustee in the Trust Fund
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.
12
<PAGE>
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 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 6.4 without the
consent of 100% of the Certificateholders and the Class C Certificateholders if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
(d) Concurrently with the solicitation of any consent pursuant to this
Section 6.4, CFSC shall furnish written notification to S&P, Fitch 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, Fitch and Duff & Phelps, each Certificateholder and the
Class C Certificateholders.
(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 6.4 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
13
<PAGE>
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 the 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, 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 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 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 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
14
<PAGE>
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 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 Loans and the Initial
Other Conveyed Property, together with its rights under this Agreement, to the
Trustee on the date hereof. CFC acknowledges and consents to such conveyance and
waives any further notice thereof and covenants and agrees that the
representations and warranties of CFC contained in this Agreement and the rights
of CFSC hereunder are intended to benefit the Trustee 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 and the Certificateholders and that,
notwithstanding anything to the contrary in this Agreement, CFC shall be
directly liable to the Trustee (notwithstanding any failure by the Servicer or
CFSC to perform its duties and obligations hereunder or under the Pooling and
Servicing Agreement) and that the Trustee may enforce the duties and obligations
of CFC under this Agreement against CFC for the benefit of the
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).
15
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Transfer Agreement to be
duly executed by their respective officers as of the day and year first above
written.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By_____________________________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
CONSECO FINANCE CORP., as Seller
By_____________________________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
16
<PAGE>
SCHEDULE A
SCHEDULE OF INITIAL AND ADDITIONAL LOANS
[Included as Exhibits L-1, L-2 and L-3 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
--------, -----
<PAGE>
SUBSEQUENT TRANSFER AGREEMENT, dated as of ________, _____, between Conseco
Finance Securitizations Corp., a Minnesota corporation, as purchaser ("CFSC"),
and Conseco Finance Corp., a Delaware corporation, as seller ("CFC"), pursuant
to the Transfer Agreement, dated as of November 1, 1999, 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
November 1, 1999 (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 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 Cut-off Date" shall mean, with respect to the Subsequent Loans
conveyed hereby, ________, _____.
"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.
"Subsequent Loans" means, for purposes of this Agreement, the Loans listed
in the Schedule of Subsequent Loans.
Ex. A-1
<PAGE>
"Subsequent Transfer Date" means the date hereof.
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 Trustee
under the Subsequent Transfer Instrument. 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 Trustee under the Subsequent Transfer Instrument. CFC and CFSC agree
that CFSC will assign to the Trustee all of CFSC's rights under this Agreement,
and that the Trustee will thereafter be entitled to enforce this Agreement
against CFC in the Trustee's own name.
(a) Schedule of Representations. The representations and warranties
set forth in Sections 3.02, 3.04 and 3.05 of the Pooling and Servicing
Agreement are true and correct.
(b) Organization and Good Standing. CFC has been duly organized and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is currently conducted, and had at all relevant times, and now
has, power, authority and legal right to acquire, own and sell the
Subsequent Loans and the Subsequent Other Conveyed Property transferred to
CFSC.
Ex. A-2
<PAGE>
(c) Due Qualification. CFC is duly qualified to do business as a
foreign corporation and is in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property or the conduct of its business requires such
qualification.
(d) Power and Authority. CFC has the power and authority to execute
and deliver this Agreement and to carry out its terms; CFC has full power
and authority to sell and assign the Subsequent 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 have been duly authorized by CFC by all necessary corporate
action.
(e) Valid Sale; Binding Obligations. This Agreement has been duly
executed and delivered, shall effect a valid sale, transfer and assignment
of the Subsequent 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 fulfillment of the terms of this Agreement shall not
conflict with, result in any breach of any of the terms and provisions of
or constitute (with or without notice, lapse of time or both) a default
under, the certificate of incorporation or bylaws of CFC, or any indenture,
agreement, mortgage, deed of trust or other instrument to which CFC is a
party or by which it is bound, or result in the creation or imposition of
any lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or regulation
applicable to CFC of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over CFC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations pending
or, to CFC's knowledge, threatened against CFC, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over CFC or its properties (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement,
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by CFC of its obligations under, or the
validity or enforceability of, this Agreement, or (iv) seeking to affect
adversely the federal income tax or other federal, state or local tax
attributes of, or seeking to impose any excise, franchise, transfer
Ex. A-3
<PAGE>
or similar tax upon, the transfer and acquisition of the Subsequent Loans
and the Subsequent Other Conveyed Property hereunder.
(h) Insolvency. As of the Subsequent Cut-off Date and the Subsequent
Transfer Date, neither CFC nor CFSC is insolvent nor will either of them
have been made insolvent 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
Trustee 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.
(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.
Ex. A-4
<PAGE>
(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 Instrument, 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.
(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
Ex. A-5
<PAGE>
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 is true and correct 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 has been
satisfied.
(c) Additional Information. CFC has delivered to CFSC such information
as was reasonably requested by CFSC to satisfy itself as to (i) the
accuracy of the representations and warranties set forth in Section 4 of
this Agreement and in Section 3.1 of the Transfer Agreement and (ii) the
satisfaction of the conditions set forth in this Section 6.
7. Ratification of Transfer Agreement. As supplemented by this Agreement,
the Transfer Agreement is in all respects ratified and confirmed and the
Transfer Agreement as so supplemented by this Agreement shall be read, taken and
construed as one and the same instrument.
8. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Minnesota without regard to the principles of conflicts of
laws thereof, and the obligations, rights and remedies of the parties under this
Agreement shall be determined in accordance with such laws.
9. Counterparts. For the purposes of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
10. Conveyance of the Subsequent 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
Ex. A-6
<PAGE>
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,
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 (notwithstanding any failure by CFSC to perform its duties and
obligations hereunder or under the Pooling and Servicing Agreement or the
Transfer Agreement) and that the Trustee may enforce the duties and obligations
of CFC under this Agreement and the Transfer Agreement against CFC for the
benefit of the 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: Phyllis A. Knight
Title: Senior Vice President and Treasurer
CONSECO FINANCE CORP., as Seller
By__________________________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
Ex. A-8
<PAGE>
EXHIBIT 8.1
November 30, 1999
Banc of America Securities LLC Prudential Securities Incorporated
100 North Tyron Street One New York Plaza
10th Floor New York, New York 10292
Charlotte, North Carolina 28255
Fitch IBCA, Inc.
Credit Suisse First Boston Corporation One State Street Plaza
11 Madison Avenue, 6th Floor New York, New York 10004
New York, New York 10010-3629
Standard & Poor's Ratings Services
Lehman Brothers Inc. 55 Water Street
Three World Financial Center New York, New York 10041
New York, New York 10285
Duff & Phelps Credit Rating Co.
Merrill Lynch, Pierce, Fenner 17 State Street
& Smith Incorporated New York, New York 10004
North Tower
World Financial Center U.S. Bank Trust National Association
New York, New York 10281 180 East Fifth Street
Saint Paul, Minnesota 55101
Re: Conseco Finance Corp./Conseco Finance Securitizations Corp.
Certificates for Home Equity Loans, Series 1999-H
Gentlemen:
We have acted as counsel for Conseco Finance Corp. ("Conseco") and Conseco
Finance Securitizations Corp. ("CFSC") in connection with their execution of (a)
a Pooling and Servicing Agreement, dated as of November 1, 1999 (the "Pooling
and Servicing Agreement"), among Conseco, CFSC and U.S. Bank Trust National
Association, as Trustee (the "Trustee"), and CFSC's establishment, pursuant
thereto, of Home Equity Loan Trust 1999-H (the "Trust") and (b) a Transfer
Agreement, dated as of November 1, 1999, between Conseco and CFSC. All undefined
capitalized terms used in this opinion have the meanings given them in the
Pooling and Servicing Agreement.
<PAGE>
Banc of America Securities LLC
Credit Suisse First Boston Corporation
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Prudential Securities Incorporated
Fitch IBCA, Inc.
Standard & Poor's Ratings Services
Duff & Phelps Credit Rating Co.
U.S. Bank Trust National Association
November 30, 1999
Page 2
Pursuant to the Pooling and Servicing Agreement, CFSC will transfer to the
Trust the Loans and certain related property and Conseco will act as Servicer of
the Loans and provide a Class B-2 Limited Guaranty in respect of the Class B-2
Certificates against losses on the Loans.
Conseco and CFSC have requested that we provide to you our opinion whether
the Master REMIC and Subsidiary REMIC will each be treated as a real estate
mortgage investment conduit ("REMIC") under the Internal Revenue Code of 1986,
as amended through the date hereof (the "Code"), under certain Treasury
Regulations concerning REMICs promulgated by the Treasury Department on December
23, 1992 (the "REMIC Regulations"), and under Minnesota law.
In rendering our opinion, we have examined the Pooling and Servicing
Agreement and such additional related documents, and we have reviewed such
questions of law, as we have considered necessary and appropriate for the
purposes of the opinion expressed herein.
Our opinion is based upon existing law and currently applicable Treasury
Department regulations, current published administrative positions of the
Internal Revenue Service contained in revenue rulings and revenue procedures,
and judicial decisions, all of which are subject to change, either prospectively
or retroactively, and to possibly differing interpretations, and is also based
on the representations and warranties set forth in the Pooling and Servicing
Agreement and the assumptions that CFSC and the Trustee will at all times comply
with the requirements of the Pooling and Servicing Agreement, including, without
limitation, the requirement that a proper election to be taxed as a REMIC is
made for each of the Master REMIC and Subsidiary REMIC in accordance with the
Pooling and Servicing Agreement and the Code, and that the certificates
representing interests in the Trust will be issued as described in the
Prospectus Supplement relating to the Certificates.
Based upon the foregoing, as of the date hereof it is our opinion that:
<PAGE>
Banc of America Securities LLC
Credit Suisse First Boston Corporation
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
Prudential Securities Incorporated
Fitch IBCA, Inc.
Standard & Poor's Ratings Services
Duff & Phelps Credit Rating Co.
U.S. Bank Trust National Association
November 30, 1999
Page 3
1. The Master REMIC and Subsidiary REMIC created pursuant to the Pooling
and Servicing Agreement will each qualify as a REMIC under the Code and under
the REMIC Regulations. The Certificates will evidence ownership of the "regular
interests" in the Master REMIC. The Class C Master Certificate will evidence
ownership of the single class of "residual interests" in the Master REMIC. The
Subsidiary REMIC Regular Interests will evidence ownership of the "regular
interests" in the Subsidiary REMIC. The Class C Subsidiary Certificate will
evidence ownership of the single class of "residual interests" in the Subsidiary
REMIC.
2. For Minnesota income and franchise tax purposes, the Trust (excluding
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 as amended through December 31, 1998.
3. Ownership of a Certificate will not be a factor in determining whether
the owner is subject to Minnesota income or franchise taxes. Therefore, if the
owner of a Certificate 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 a Certificate.
We express no opinion as to the laws of any jurisdiction other than the
federal laws of the United States of America and the laws of the State of
Minnesota. This opinion is being delivered to you at the request of Conseco and
CFSC only for your use. It may not be circulated or republished to or relied
upon by any other person without our prior written consent.
Very truly yours,
