<PAGE>
EXHIBIT 4.1
Certificates for Home Equity Loans
Series 2000-C
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
and
CONSECO FINANCE CORP.
as Originator and Servicer
and
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
of
CONSECO FINANCE HOME EQUITY LOAN TRUST 2000-C
Dated as of June 1, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS....................................................1-1
SECTION 1.01. General....................................................1-1
SECTION 1.02. Specific Terms.............................................1-1
SECTION 1.03. Calculation of Interest on the Certificates...............1-28
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF LOANS......................2-1
SECTION 2.01. Closing....................................................2-1
SECTION 2.02. Conditions to the Closing..................................2-1
SECTION 2.03. Conveyance of the Subsequent Loans.........................2-3
SECTION 2.04. Acceptance by Trustee......................................2-5
SECTION 2.05. REMIC Provisions...........................................2-5
SECTION 2.06. Seller Option to Substitute for Prepaid Loans..............2-7
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................3-1
SECTION 3.01. Representations and Warranties Regarding the Seller........3-1
SECTION 3.02. Representations and Warranties Regarding Each Loan.........3-2
SECTION 3.03. Additional Representations and Warranties..................3-5
SECTION 3.04. Representations and Warranties Regarding the Loans in
the Aggregate..............................................3-5
SECTION 3.05. Representations and Warranties Regarding the Loan Files....3-7
SECTION 3.06. Repurchases of Loans for Breach of Representations and
Warranties.................................................3-8
SECTION 3.07. No Repurchase Under Certain Circumstances..................3-9
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY
INTERESTS .....................................................4-1
SECTION 4.01. Transfer of Loans..........................................4-1
SECTION 4.02. Costs and Expenses.........................................4-1
ARTICLE V SERVICING OF LOANS.............................................5-2
SECTION 5.01. Responsibility for Loan Administration.....................5-2
SECTION 5.02. Standard of Care...........................................5-2
SECTION 5.03. Records....................................................5-2
SECTION 5.04. Inspection.................................................5-2
SECTION 5.05. Certificate Account........................................5-3
SECTION 5.06. Enforcement................................................5-5
SECTION 5.07. Trustee to Cooperate.......................................5-6
SECTION 5.08. Costs and Expenses.........................................5-7
SECTION 5.09. Maintenance of Insurance...................................5-7
SECTION 5.10. Merger or Consolidation of Servicer........................5-8
i
<PAGE>
ARTICLE VI REPORTS AND TAX MATTERS........................................6-1
SECTION 6.01. Monthly Reports............................................6-1
SECTION 6.02. Officer's Certificate......................................6-1
SECTION 6.03. Other Data.................................................6-1
SECTION 6.04. Annual Report of Accountants...............................6-1
SECTION 6.05. Statements to Certificateholders and the Class C
Certificateholder..........................................6-1
SECTION 6.06. Payment of Taxes...........................................6-7
ARTICLE VII SERVICE TRANSFER...............................................7-1
SECTION 7.01. Events of Termination......................................7-1
SECTION 7.02. Transfer...................................................7-1
SECTION 7.03. Trustee to Act; Appointment of Successor...................7-2
SECTION 7.04. Notification to Certificateholders and Class C
Certificateholder..........................................7-2
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. [Reserved].................................................8-2
SECTION 8.04. Permitted Withdrawals from the Certificate Account;
Payments...................................................8-2
SECTION 8.05. Reassignment of Repurchased and Replaced Loans.............8-5
SECTION 8.06. Class C Certificateholder's Purchase Option or Auction
Sale; Additional Principal Distribution Amount.............8-5
SECTION 8.07. Capitalized Interest Account...............................8-8
SECTION 8.08. Pre-Funding Account........................................8-9
SECTION 8.09. Available Funds Cap Carryover Reserve Account..............8-9
ARTICLE IX THE CERTIFICATES AND THE CLASS C CERTIFICATE...................9-1
SECTION 9.01. The Certificates and the Class C Certificate...............9-1
SECTION 9.02. Registration of Transfer and Exchange of Certificates
and the Class C Certificate................................9-1
SECTION 9.03. No Charge; Disposition of Void Certificates or Class C
Certificate................................................9-5
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or
Class C Certificate........................................9-5
SECTION 9.05. Persons Deemed Owners......................................9-5
SECTION 9.06. Access to List of Certificateholders' and Class C
Certificateholder Names and Addresses......................9-5
SECTION 9.07. Authenticating Agents......................................9-6
ii
<PAGE>
ARTICLE X INDEMNITIES..................................................10-1
SECTION 10.01. Real Estate.............................................10-1
SECTION 10.02. Liabilities to Obligors.................................10-1
SECTION 10.03. Tax Indemnification.....................................10-1
SECTION 10.04. Servicer's Indemnities..................................10-1
SECTION 10.05. Operation of Indemnities................................10-1
SECTION 10.06. REMIC Tax Matters.......................................10-2
ARTICLE XI THE TRUSTEE..................................................11-1
SECTION 11.01. Duties of Trustee.......................................11-1
SECTION 11.02. Certain Matters Affecting the Trustee...................11-2
SECTION 11.03. Trustee Not Liable for Certificates, Class C
Certificate or Loans....................................11-3
SECTION 11.04. Trustee May Own Certificates............................11-3
SECTION 11.05. Rights of Certificateholders to Direct Trustee and
to Waive Events of Termination..........................11-3
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses.........11-4
SECTION 11.07. Eligibility Requirements for Trustee....................11-4
SECTION 11.08. Resignation or Removal of Trustee.......................11-5
SECTION 11.09. Successor Trustee.......................................11-5
SECTION 11.10. Merger or Consolidation of Trustee......................11-6
SECTION 11.11. Tax Returns.............................................11-6
SECTION 11.12. Obligor Claims..........................................11-6
SECTION 11.13. Appointment of Co-Trustee or Separate Trustee...........11-7
SECTION 11.14. Trustee and U.S. Bancorp................................11-8
SECTION 11.15. Trustee Advances........................................11-8
ARTICLE XII MISCELLANEOUS................................................12-1
SECTION 12.01. Servicer Not to Resign; Delegation of Servicing Duties..12-1
SECTION 12.02. Conseco Finance Corp. and Seller Not to Engage in
Certain Transactions with Respect to the Trust..........12-1
SECTION 12.03. Maintenance of Office or Agency.........................12-1
SECTION 12.04. Termination.............................................12-1
SECTION 12.05. Acts of Certificateholders and Class C
Certificateholder.......................................12-3
SECTION 12.06. Calculations............................................12-4
SECTION 12.07. Assignment or Delegation by Company.....................12-4
SECTION 12.08. Amendment...............................................12-5
SECTION 12.09. Notices.................................................12-6
SECTION 12.10. Merger and Integration..................................12-8
SECTION 12.11. Headings................................................12-8
SECTION 12.12. Governing Law...........................................12-8
iii
<PAGE>
Exhibit A - Form of Class A Certificate
Exhibit B - Form of Class M-[1][2] Certificate
Exhibit C - Form of Class B-[1][2] Certificate
Exhibit D - Form of Assignment
Exhibit E - Form of Certificate of Officer
Exhibit F - Form of Opinion of Counsel for the Originator
Exhibit G - Form of Trustee's Acknowledgment
Exhibit H - Form of Certificate of Servicing Officer
Exhibit I - Form of Class C Certificate
Exhibit J-1 - Form of Certificate Regarding Repurchased Loans
Exhibit J-2 - Form of Certificate Regarding Repurchased Loans
Exhibit J-3 - Form of Certificate Regarding Substitution for Prepaid Loans
Exhibit K - Form of Representation Letter
Exhibit L - List of Initial Loans
Exhibit M - Form of Monthly Report
Exhibit N - Form of Addition Notice
Exhibit O - Form of Subsequent Transfer Instrument
Exhibit P - Form of Officer's Certificate (Subsequent Transfer)
Exhibit Q - Form of Class P Certificate
iv
<PAGE>
AGREEMENT, dated as of June 1, 2000, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware, as
originator of the home equity loans described herein (the "Originator"), as
Servicer (the "Servicer"), and U.S. Bank Trust National Association, a national
banking association organized and existing under the laws of the United States,
not in its individual capacity but solely as Trustee (the "Trustee") of Conseco
Finance Home Equity Loan Trust 2000-C (the "Trust").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
purchases, originates and services home equity loans, which loans provide for
installment payments by or on behalf of the borrowers and grant mortgages, deeds
of trust or security deeds on certain real estate securing such loans;
WHEREAS, the Seller, in the ordinary course of its business, acquires
pools of home equity loans and other receivables from Conseco Finance Corp. and
arranges the securitization of those receivables;
WHEREAS, the Seller, the Originator, the Servicer and the Trustee wish
to set forth the terms and conditions on which the Trustee, on behalf of the
Certificateholders (as defined herein) and Class C Certificateholder (as defined
herein) will acquire the Loans (as defined herein) and the Servicer will service
the Loans;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as provided herein:
<PAGE>
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. General. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article include the plural as well as the singular, the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular article, section or other
subdivision, and Section references refer to Sections of this Agreement.
SECTION 1.02. Specific Terms.
"Addition Notice" means, with respect to the transfer of Subsequent
Loans to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit N, which shall be given not later than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Loans, as applicable, to be sold to the Trust and the
aggregate Cut-off Date Principal Balances of such Subsequent Loans.
"Additional Loan" means a Loan identified as such on the List of Loans
attached hereto as Exhibit L.
"Additional Principal Distribution Amount" means, for any Payment Date,
the Amount Available remaining after payment of the amounts described in clauses
(1) through (16) of Section 8.04(b).
"Additional Principal Entitlement Date" means the Payment Date
occurring in the month following the Determination Date specified in Section
8.06(d) if the Class C Certificateholder has not delivered to the Trustee the
notice described in Section 8.06(b) of its purchase option.
"Advance" means, with respect to any Payment Date, the amounts, if any,
deposited by the Servicer or the Trustee, as applicable, in the Certificate
Account for such Payment Date pursuant to Section 8.02.
"Advance Payment" means any payment by an Obligor in advance of the Due
Period in which it would be due under such Loan and which payment is not a
Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Certificate Principal Balance" means the sum of the Class A,
Class M-1, Class M-2, Class B-1, Class B-2 and Class P Principal Balances.
1-1
<PAGE>
"Aggregate Liquidation Loss Principal Amount" means, for any Payment
Date, the excess, if any, of (a) the Aggregate Certificate Principal Balance
(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),
(iii) any amounts on deposit in the Certificate Account as of
the close of business on the last day of the related Due Period
representing collections in respect of Principal Prepayments in Full
(other than any amounts referred to in Section 2.06(vii)) on Loans for
which a substitution has been made in accordance with Section 2.06, and
(iv) any Prepayment Charges.
"Amount Held for Future Distribution" means, for any Payment Date, the
total of the amounts held in the Certificate Account in respect of the Loans on
the last day of the preceding Due Period on account of Advance Payments in
respect of such Due Period.
"Applicants" has the meaning assigned in Section 9.06.
"Authenticating Agent" means any authenticating agent appointed
pursuant to Section 9.07.
1-2
<PAGE>
"Available Funds Cap Carryover Amount" means, for any Payment Date, the
sum of the Class A Available Funds Cap Carryover Amount, the Class M-1 Available
Funds Cap Carryover Amount, the Class M-2 Available Funds Cap Carryover Amount,
the Class B-1 Available Funds Cap Carryover Amount and the Class B-2 Available
Funds Cap Carryover Amount.
"Available Funds Cap Carryover Reserve Account" means a separate trust
account created and maintained pursuant to Section 8.09 in the name of the Trust
in an Eligible Institution.
"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 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 Ratio for such Payment Date and for the two immediately preceding
Payment Dates is less than or equal to 40% of the Senior Enhancement Percentage.
"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 2000-C,
Class A, Class M-1, Class M-2, Class B-1, Class B-2 or Class P, executed and
delivered by the Trustee substantially in the form of Exhibit A, B, C or Q, as
applicable, but does not include the Class C Certificate.
"Certificate Account" means a separate trust account created and
maintained pursuant to Section 5.05 in the name of the Trust in an Eligible
Institution.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate or, if Definitive Certificates have been issued,
Certificateholders.
"Certificate Register" means the register maintained pursuant to
Section 9.02.
1-3
<PAGE>
"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 a Class C Certificate
which the Trustee knows to be so owned shall be so disregarded.
"Class A," "Class M," "Class B," "Class P," or "Class C" means
pertaining to Class A Certificates, Class M Certificates, Class B Certificates,
the Class P Certificate and/or the Class C Certificate, as the case may be.
"Class A Available Funds Cap Carryover Amount" means, for any Payment
Date, an amount equal to the sum of (1) the excess, if any, of (a) interest from
and including the immediately preceding Payment Date to but excluding the
current Payment Date (or, as to the first Payment Date, interest from and
including the Closing Date to but excluding July 17, 2000) at the Class A Pass-
Through Rate (determined without respect to any limitation imposed by the
Available Funds Pass- Through Rate but in no event greater than 14%) on the
Class A Principal Balance over (b) the amount specified in clause (a) of the
definition of the term "Class A Formula Distribution Amount" and (2) the amount
of any Class A 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 A Pass-Through Rate
for such Payment Date.
"Class A Certificate" means the Class A Certificate executed and
delivered by the Trustee and authenticated by the Certificate Registrar
substantially in the form set forth in Exhibit A and evidencing an interest
designated as a "regular interest" in the assets of the Trust comprising a REMIC
for purposes of the REMIC Provisions.
"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) interest from and including the immediately
preceding Payment Date to but excluding the current Payment Date (or, as to the
first Payment Date, interest from and including the Closing Date to but
excluding July 17, 2000) at the Class A Pass-Through Rate on the Class A
Principal Balance, (b) the aggregate of the Unpaid Class A Interest Shortfalls,
if any, 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).
1-4
<PAGE>
"Class A Formula Interest Distribution Amount" means the sum of the
amounts specified in clauses (a) and (b) of the definition of the term "Class A
Formula Distribution Amount."
"Class A Formula Principal Distribution Amount" means, for any Payment
Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount (but in no event more than the Class A
Principal Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess of (A) the Class A Principal
Balance over (B) the lesser of (x) 55.40% of the Pool Scheduled
Principal Balance or (y) the Pool Scheduled Principal Balance minus
$6,000,000.
"Class A Interest Shortfall" means 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 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 A Principal Balance" means, for any Payment Date, the Original
Class A Principal Balance less all amounts previously distributed to Holders of
Class A Certificates in respect of principal.
"Class A Principal Distribution Amount" means, for any Payment Date,
that portion of the Class A Distribution Amount to be distributed to the Class A
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 Adjusted Principal Balance" means, for any Payment Date, the
Class B-1 Principal Balance minus the Class B-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class B-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) interest from
and including the immediately preceding Payment Date to but excluding the
current Payment Date (or, as to the first Payment Date, interest from and
including the Closing Date to but excluding July 17, 2000) at the Class B-1
Pass- Through Rate (determined without respect to any limitation imposed by the
Available Funds Pass- Through Rate but in no event greater than 14%) on the
Class B-1 Principal Balance over (b) the
1-5
<PAGE>
amount specified in clause (a) of the definition of the term "Class B-1 Formula
Distribution Amount" and (2) the amount of any Class B-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 B-1 Pass Through Rate for such Payment Date.
"Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit C and evidencing an
interest designated as a "regular interest" in the assets of the Trust
comprising a REMIC for purposes of the REMIC Provisions.
"Class B-1 Distribution Amount" means, for any Payment Date, the lesser
of (a) the Class B-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 B-1 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) interest from and including the immediately
preceding Payment Date to but excluding the current Payment Date (or, as to the
first Payment Date, interest from and including the Closing Date to but
excluding July 17, 2000) at the Class B-1 Pass-Through Rate on the Class B-1
Adjusted Principal Balance immediately prior to such Payment Date, (b) the
aggregate of the Unpaid Class B-1 Interest Shortfalls, if any, with respect to
the Class B-1 Certificates, (c) the Class B-1 Formula Principal Distribution
Amount and (d) the Class B-1 Formula Liquidation Loss Interest Distribution
Amount, if any, with respect to the Class B-1 Certificates.
"Class B-1 Formula Interest Distribution Amount" means the sum of the
amounts specified in clauses (a) and (b) of the definition of the term "Class
B-1 Formula Distribution Amount".
"Class B-1 Formula Liquidation Loss Interest Distribution Amount"
means, for any Payment Date, the sum of (a) the Class B-1 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall, if any, for the immediately preceding Payment Date.
"Class B-1 Formula Principal Distribution Amount" means, for any
Payment Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the sum of the Class A Formula
Principal Distribution Amount, the Class M-1 Formula Principal
Distribution Amount and the Class M-2 Formula Principal Distribution
Amount (but in no event more than the Class B-1 Principal Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class B-1 Principal Balance) of
(A) (1) the sum of the Class A Principal Balance, the Class
M-1 Adjusted Principal Balance, the Class M-2 Adjusted Principal
Balance and the Class B-1 Adjusted
1-6
<PAGE>
Principal Balance, minus (2) the amount actually distributed on such
Payment Date in respect of principal on the Class A, Class M-1 and
Class M-2 Certificates, over
(B) the lesser of (x) 85.40% of the Pool Scheduled Principal
Balance or (y) the Pool Scheduled Principal Balance minus $6,000,000.
"Class B-1 Interest Shortfall" means, 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)(5).
"Class B-1 Liquidation Loss Interest Amount" means, for any Payment
Date, an amount equal to interest from and including the immediately preceding
Payment Date to but excluding the current Payment Date at the Class B-1
Pass-Through Rate on the Class B-1 Liquidation Loss Principal Amount (if any)
for the immediately preceding Payment Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class B-1 Formula Liquidation Loss
Interest Distribution Amount exceeds (b) any amount distributed to Holders of
such Class on such Payment Date pursuant to Section 8.04(b)(12).
"Class B-1 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (A) the Class B-1 Principal Balance (after giving effect to
all distributions of principal on the Class B-1 Certificates on such Payment
Date) and (B) the Aggregate Liquidation Loss Principal Amount (if any) minus the
Class B-2 Liquidation Loss Principal Amount (if any) for such Payment Date.
"Class B-1 Principal Balance" means, for any Payment Date, the Original
Class B-1 Principal Balance less all amounts previously distributed to Holders
of Class B-1 Certificates in respect of principal.
"Class B-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class B-1 Distribution Amount to be distributed to the Class
B-1 Certificateholders pursuant to Section 8.04(b)(9).
"Class B-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) interest from
and including the immediately preceding Payment Date to but excluding the
current Payment Date (or, as to the first Payment Date, interest from and
including the Closing Date to but excluding July 17, 2000) at the Class B-2
Pass- Through Rate (determined without respect to any limitation imposed by the
Available Funds Pass- Through Rate but in no event greater than 14%) on the
Class B-2 Principal Balance over (b) the amount specified in clause (a) of the
definition of the term "Class B-2 Formula Distribution Amount" and (2) the
amount of any Class B-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 B-2
Pass-Through Rate for such Payment Date.
1-7
<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 assets of the Trust
comprising a 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) interest from and including the immediately
preceding Payment Date to but excluding the current Payment Date (or, as to the
first Payment Date, interest from and including the Closing Date to but
excluding July 17, 2000) at the Class B-2 Pass-Through Rate on the Class B-2
Principal Balance to be calculated immediately prior to such Payment Date, (b)
the aggregate of the Unpaid Class B-2 Interest Shortfalls, if any, with respect
to the Class B-2 Certificates and (c) the Class B-2 Formula Principal
Distribution Amount.
"Class B-2 Formula Interest Distribution Amount" means 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:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the sum of the Class A Formula
Principal Distribution Amount, the Class M-1 Formula Principal
Distribution Amount, the Class M-2 Formula Principal Distribution
Amount and the Class B-1 Formula Principal Distribution Amount (but in
no event more than the Class B-2 Principal Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class B-2 Principal Balance) of
(A) (1) the sum of the Class A Principal Balance, the Class
M-1 Adjusted Principal Balance, the Class M-2 Adjusted
Principal Balance, the Class B-1 Adjusted Principal Balance
and the Class B-2 Principal Balance, minus (2) the amount
actually distributed on such Payment Date in respect of
principal on the Class A, Class M-1, Class M-2 and Class B-1
Certificates, over
(B) the lesser of (x) 97.00% of the Pool Scheduled Principal
Balance or (y) the Pool Scheduled Principal Balance minus
$6,000,000.
"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 clause (i) of Section 8.04(b)(13).
1-8
<PAGE>
"Class B-2 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (A) the Original Class B-2 Principal Balance less all
amounts previously distributed to Holders of Class B-2 Certificates in respect
of principal and (B) the Aggregate Liquidation Loss Principal Amount for such
Payment Date.
"Class B-2 Principal Balance" means, for any Payment Date, the Original
Class B-2 Principal Balance less the sum of all amounts previously distributed
to Holders of Class B-2 Certificates in respect of principal and any Class B-2
Liquidation Loss Principal Amount.
"Class B-2 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class B-2 Distribution Amount to be distributed to the Class
B-2 Certificateholders pursuant to Section 8.04(b)(13).
"Class C Certificate" means a Certificate for Home Equity Loans, Series
2000-C, bearing the designation Class C, executed and delivered by the Trustee
substantially in the form of Exhibit I, and evidencing an interest designated as
a "residual interest" in the REMIC for purposes of the REMIC Provisions.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Distribution Amount" means, for any Payment Date, the amount,
if any, distributable in respect of the Class C Certificate pursuant to Section
8.04(b).
"Class M Certificates" means the Class M-1 and Class M-2 Certificates,
collectively.
"Class M-1 Adjusted Principal Balance" means, for any Payment Date, the
Class M-1 Principal Balance minus the Class M-1 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class M-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) interest from
and including the immediately preceding Payment Date to but excluding the
current Payment Date (or, as to the first Payment Date, interest from and
including the Closing Date to but excluding July 17, 2000) at the Class M-1
Pass- Through Rate (determined without respect to any limitation imposed by the
Available Funds Pass- Through Rate but in no event greater than 14%) on the
Class M-1 Principal Balance over (b) the amount specified in clause (a) of the
definition of the term "Class M-1 Formula Distribution Amount" and (2) the
amount of any Class M-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 M-1 Pass
Through Rate for such Payment Date.
"Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in
1-9
<PAGE>
Exhibit B and evidencing an interest designated as a "regular interest" in the
assets of the Trust comprising a REMIC for purposes of the REMIC Provisions.
"Class M-1 Distribution Amount" means, for any Payment Date, the lesser
of (a) the Class M-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 M-1 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) interest from and including the immediately
preceding Payment Date to but excluding the current Payment Date (or, as to the
first Payment Date, interest from and including the Closing Date to but
excluding July 17, 2000) at the Class M-1 Pass-Through Rate on the Class M-1
Adjusted Principal Balance 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 the Class M-1 Certificates, (c) the Class M-1 Formula Principal
Distribution Amount and (d) the Class M-1 Formula Liquidation Loss Interest
Distribution Amount, if any, with respect to the Class M-1 Certificates.
"Class M-1 Formula Interest Distribution Amount" means, for any Payment
Date, the sum of the amounts specified in clauses (a) and (b) of the definition
of the term "Class M-1 Formula Distribution Amount".
"Class M-1 Formula Liquidation Loss Interest Distribution Amount"
means, for any Payment Date, the sum of (a) the Class M-1 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall, if any, for the immediately preceding Payment Date.
"Class M-1 Formula Principal Distribution Amount" means, for any
Payment Date:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the Class A Formula Principal
Distribution Amount (but in no event more than the Class M-1 Principal
Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class M-1 Principal Balance) of
(A) (1) the sum of the Class A Principal Balance and the Class
M-1 Adjusted Principal Balance, minus (2) the amount actually
distributed on such Payment Date in respect of principal on
the Class A Certificates, over
(B) the lesser of (x) 68.10% of the Pool Scheduled Principal
Balance or (y) the Pool Scheduled Principal Balance minus
$6,000,000.
1-10
<PAGE>
"Class M-1 Interest Shortfall" means, for 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 Amount" means, for any Payment
Date, an amount equal to interest from and including the immediately preceding
Payment Date to but excluding the current Payment Date at the Class M-1
Pass-Through Rate on the Class M-1 Liquidation Loss Principal Amount (if any)
for the immediately preceding Payment Date.
"Class M-1 Liquidation Loss Interest Shortfall" means, for 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 Liquidation Loss Principal Amount" means, for any Payment
Date, the lesser of (A) the Class M-1 Principal Balance (after giving effect to
all distributions of principal on the Class M-1 Certificates on such Payment
Date) and (B) the excess, if any, of the Aggregate Liquidation Loss Principal
Amount over the aggregate of the Class B-2 Liquidation Loss Principal Amount,
the Class B-1 Liquidation Loss Principal Amount and the Class M-2 Liquidation
Loss Principal Amount for such Payment Date.
"Class M-1 Principal Balance" means, for any Payment Date, the Original
Class M-1 Principal Balance less all amounts previously distributed to Holders
of Class M-1 Certificates in respect of principal.
"Class M-1 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class M-1 Distribution Amount to be distributed to the Class
M-1 Certificateholders pursuant to Section 8.04(b)(7).
"Class M-2 Adjusted Principal Balance" means, for any Payment Date, the
Class M-2 Principal Balance minus the Class M-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class M-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) interest from
and including the immediately preceding Payment Date to but excluding the
current Payment Date (or, as to the first Payment Date, interest from and
including the Closing Date to but excluding July 17, 2000) at the Class M-2
Pass- Through Rate (determined without respect to any limitation imposed by the
Available Funds Pass- Through Rate but in no event greater than 14%) on the
Class M-2 Principal Balance over (b) the amount specified in clause (a) of the
definition of the term "Class M-2 Formula Distribution Amount" and (2) the
amount of any Class M-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 M-2 Pass
Through Rate for such Payment Date.
1-11
<PAGE>
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit B and evidencing an
interest designated as a "regular interest" in the assets of the Trust
comprising a REMIC for purposes of the REMIC Provisions.
"Class M-2 Distribution Amount" means, for any Payment Date, the lesser
of (a) the Class M-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 M-2 Formula Distribution Amount" means, for any Payment Date, an
amount equal to the sum of (a) interest from and including the immediately
preceding Payment Date to but excluding the current Payment Date (or, as to the
first Payment Date, interest from and including the Closing Date to but
excluding July 17, 2000) at the Class M-2 Pass-Through Rate on the Class M-2
Adjusted Principal Balance 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 the Class M-2 Certificates, (c) the Class M-2 Formula Principal
Distribution Amount and (d) the Class M-2 Formula Liquidation Loss Interest
Distribution Amount, if any, with respect to the Class M-2 Certificates.
"Class M-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 M-2 Formula Distribution Amount".
"Class M-2 Formula Liquidation Loss Interest Distribution Amount"
means, for any Payment Date, the sum of (a) the Class M-2 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall, if any, for the immediately preceding Payment Date.
"Class M-2 Formula Principal Distribution Amount" means, for any
Payment Date, the lesser of:
(i) if the Payment Date is (A) before the Stepdown Date or (B)
on or after the Stepdown Date and a Trigger Event exists, the Formula
Principal Distribution Amount less the sum of the Class A Formula
Principal Distribution Amount and the Class M-1 Formula Principal
Distribution Amount (but in no event more than the Class M-2 Principal
Balance); or
(ii) if the Payment Date is on or after the Stepdown Date and
no Trigger Event exists, the excess (but in no event more than the
Class M-2 Principal Balance) of
(A) (1) the sum of the Class A Principal Balance, the Class
M-1 Adjusted Principal Balance and the Class M-2 Adjusted
Principal Balance, minus (2) the amount actually distributed
on such Payment Date in respect of principal on the Class A
and Class M-1 Certificates, over
1-12
<PAGE>
(B) the lesser of (x) 80.30% of the Pool Scheduled Principal
Balance or (y) the Pool Scheduled Principal Balance minus
$6,000,000.
"Class M-2 Interest Shortfall" means, for 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, for any Payment Date, an amount equal to interest from
and including the immediately preceding Payment Date to but excluding the
current Payment Date at the Class M-2 Pass-Through Rate on the Class M-2
Liquidation Loss Principal Amount (if any) for the immediately preceding Payment
Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, for 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 aggregate of the Class B-2 Liquidation Loss Principal Amount and
the Class B-1 Liquidation Loss Principal Amount for such Payment Date.
"Class M-2 Principal Balance" means, for any Payment Date, the Original
Class M-2 Principal Balance less all amounts previously distributed to Holders
of Class M-2 Certificates in respect of principal.
"Class M-2 Principal Distribution Amount" means, for any Payment Date,
that portion of the Class M-2 Distribution Amount to be distributed to the Class
M-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 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 A, Class M-1, Class
M-2, Class B-1, Class B-2 or Class P Principal Balances.
1-13
<PAGE>
"Closing Date" means June 9, 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"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
fraction, expressed as a percentage, the numerator of which is the Cumulative
Realized Losses for the Loans for that Payment Date and the denominator of which
is the sum of the Cut-off Date Principal Balances of all the Loans plus the
amount on deposit in the Pre-Funding Account immediately prior to the Post-
Funding Payment Date.
"Cumulative Realized Losses" means, for any Payment Date, the sum of
the Realized Losses for the 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 such Payment
Date is less than or equal to the percentage set forth below:
Payment Date Percentage
------------ ----------
July 2003 - June 2004 4.20%
July 2004 - June 2005 5.00%
July 2005 - June 2007 5.25%
July 2007 and thereafter 5.75%
"Custodian" means at any time an Eligible Institution, or a financial
institution organized under the laws of the United States or any State, which is
not an Affiliate of the Originator, which is subject to supervision and
examination by Federal or State authorities and whose commercial paper or
unsecured long-term debt (or, in the case of a member of a bank holding company
system, the commercial paper or unsecured long-term debt of such bank holding
company) has been rated A-1+ by S&P, P-1 by Moody's and F-1 by Fitch in the case
of commercial paper, or BBB+ or higher
1-14
<PAGE>
by each of S&P, Moody's and Fitch in the case of unsecured long-term debt, as is
acting at such time as Custodian of the Loan Files pursuant to Section 4.01.
"Cut-off Date" means, with respect to each Initial Loan, April 30, 2000
(or the date of origination, if later) and, with respect to each Additional
Loan, June 30, 2000.
"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) the
Class A Certificate evidencing $310,800,000 in Original Class A Principal
Balance, (ii) one Class M-1 Certificate evidencing $25,400,000 in Original Class
M-1 Principal Balance, (iii) one Class M-2 Certificate evidencing $24,400,000 in
Original Class M-2 Principal Balance, (iv) one Class B-1 Certificate evidencing
$10,200,000 in Original Class B-1 Principal Balance, (v) one Class B-2
Certificate evidencing $23,200,000 in Original Class B-2 Principal Balance, and
any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(5) of the Uniform Commercial
Code of the State of New York.
"Depository Participant" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date" means the second Business Day preceding each
Payment Date during the term of this Agreement.
1-15
<PAGE>
"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 May and June.
"Electronic Ledger" means the electronic master record of promissory
notes of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following: (i) an account maintained with an Eligible Institution; (ii) an
account or accounts the deposits in which are fully insured by either the Bank
Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation; (iii) a trust account (which shall be a "segregated trust
account") maintained with the corporate trust department of a federal or state
chartered depository institution or trust company with trust powers and acting
in its fiduciary capacity for the benefit of the Trustee hereunder, which
depository institution or trust company shall have capital and surplus of not
less than $50,000,000; or (iv) an account that will not cause any of the Rating
Agencies to downgrade or withdraw its then-current rating assigned to the
Certificates, as evidenced in writing by each of the Rating Agencies.
"Eligible Institution" means any depository institution (which may be
the Trustee or an Affiliate of the Trustee) organized under the laws of the
United States or any State, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or State authorities and whose
short-term deposits have been rated A-1+ by S&P, P-1 by Moody's (if rated by
Moody's) and F-1+ by Fitch (if rated by Fitch) or whose unsecured long-term debt
has been rated in one of the two highest rating categories by S&P and Moody's
(if rated by Moody's) and Fitch (if rated by Fitch).
"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, so long as such 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
1-16
<PAGE>
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
as the Replaced Loan or Prepaid Loan, as the case may be, (f) 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 maximum
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 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 loan to value ratio of
such Loan is not more than 100 basis points higher than the loan to value ratio
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, 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.
"Expense Adjusted Loan Rate" means, with respect to any Loan, the then
applicable mortgage rate thereon, minus the Expense Fee Rate.
"Expense Fee Rate" means 0.50%.
"Federal Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
"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, 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 one such NRSRO is then rating
any Class of the Certificates, to such NRSRO as may be designated by the
Servicer),
1-17
<PAGE>
and references herein to ratings by or requirements of Fitch shall be deemed to
have the equivalent meanings with respect to ratings by or requirements of such
NRSRO.
"Formula Principal Distribution Amount" means, 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)(v); plus.
(e) any amount described in clauses (a) through (d) above that
was not previously distributed because of an insufficient amount of
funds available in the Certificate Account; plus
(f) on the Post-Funding Payment Date, any amount withdrawn
from the Pre-Funding Account and deposited in the Certificate Account.
"GNMA" means the Government National Mortgage Association, or any
successor thereto.
"Home Equity Loan Trust 2000-C" means the Trust.
"HUD" means the United States Department of Housing and Urban
Development, or any successor thereto.
"Initial Loan" means a Loan identified as such on the List of Loans
attached hereto, the aggregate Cut-off Date Principal Balance of which Loans is
$216,042,370.50.
"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.
1-18
<PAGE>
"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:
(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
1-19
<PAGE>
to Due Periods beginning on or after May 2029, a Liquidated Loan also means any
Loan as to which the Servicer has commenced foreclosure proceedings, or made a
sale of the Loan to a third party for foreclosure or enforcement.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any Defaulted Loan, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.
"Liquidation Proceeds" means cash (including insurance proceeds)
received in connection with the liquidation of Defaulted Loans, whether through
repossession, foreclosure sale or otherwise.
"List of Loans" means the lists identifying each Loan constituting part
of the Trust Fund and attached either to this Agreement as Exhibit L or to a
Subsequent Transfer Instrument, as such lists may be amended from time to time
pursuant to Section 2.06 or Section 3.06(b) to add Eligible Substitute Loans and
delete Replaced Loans or Prepaid Loans, as the case may be. Each List of Loans
shall set forth as to each Loan identified on it (i) the Cut-off Date Principal
Balance, (ii) the amount of monthly payments due from the Obligor, (iii) the
Loan Interest Rate and (iv) the maturity date.
"Loan" means each closed-end home equity loan identified as such in the
List of Loans, which Loan is to be assigned and conveyed by the 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 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.
"Loan Interest Rate" means, as to any Loan, the annual rate of interest
specified in the Loan.
"Minimum Loan Rate" means as to any Loan, the minimum Loan Interest
Rate set forth in such Loan.
"Monthly Report" has the meaning assigned in Section 6.01.
1-20
<PAGE>
"Monthly Servicing Fee" means, for any Payment Date, with respect to
the Loans, one- twelfth of the product of 0.50% and the Pool Scheduled Principal
Balance for the preceding Payment Date (or, in the case of the first Payment
Date, the Cut-off Date).
"Moody's" means Moody's Investors Service, Inc., or any successor
thereto; provided that, if Moody's no longer has a rating outstanding on any
Class of Certificates, then references herein to "Moody's" shall be deemed to
refer to the NRSRO then rating any Class of the Certificates (or, if more than
one such NRSRO is then rating any Class of the Certificates, to such NRSRO as
may be designated by the Servicer), and references herein to ratings by or
requirements of Moody's shall be deemed to have the equivalent meanings with
respect to ratings by or requirements of such NRSRO.
"Net Liquidation Loss" means, as to a Liquidated Loan, the difference
between (a) the Repurchase Price of such Loan, and (b) the Net Liquidation
Proceeds with respect to such Liquidated Loan, where such difference is a
positive number.
"Net Liquidation Proceeds" means, as to a Liquidated Loan, the proceeds
received, or, for Loans which become Liquidated Loans pursuant to the last
proviso in the definition of "Liquidated Loan," the estimated proceeds to be
received, as of the last day of the Due Period in which such Loan became a
Liquidated Loan, from the Obligor, from a third party purchaser of the Loan,
under insurance, or otherwise, net of Liquidation Expenses.
"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 $394,000,100.
"Original Class Principal Balance" means as to each Class of
Certificates, the amount set forth with respect to such Class in Section
2.05(b).
"Original Pre-Funded Amount" means the amount deposited in the
Pre-Funding Account pursuant to Section 2.02(l).
"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).
1-21
<PAGE>
"Pass-Through Rate" means, with respect to each Class of Certificates,
the rate set forth for such Class in Section 2.05(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Payment Date" means the fifteenth day of each calendar month during
the term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing in July 2000.
"Percentage Interest" means, as to any Certificate or the Class C
Certificate, the percentage interest evidenced thereby in distributions made on
the related Class, such percentage interest being equal to: (i) as to any
Certificate, the percentage (carried to eight places) obtained from dividing the
denomination of such Certificate by the Original Class Principal Balance of the
related Class and (ii) as to any Class C Certificate, the percentage specified
on the face of such Certificate. The aggregate Percentage Interests for each
Class of Certificates and the Class C Certificate shall equal 100%,
respectively.
"Permitted Transferee" means, in the case of a transfer of the Class C
Certificate, a Person that is not a Plan or a Disqualified Organization, except
as permitted by Sections 9.02(b)(2) and (3), respectively.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Pool Factor" means, at any time, the percentage derived from a
fraction, the numerator of which is the Aggregate Certificate Principal Balance
at such time and the denominator of which is the Original Aggregate Certificate
Principal Balance.
"Pool Scheduled Principal Balance" means, for any Payment Date, the
aggregate Scheduled Principal Balance for such Payment Date of all Loans that
were outstanding during the immediately preceding Due Period.
"Post-Funding Payment Date" means the Payment Date on, or the first
Payment Date after, the last day of the Pre-Funding Period.
"Pre-Funded Amount" means, with respect to any date of determination,
the amount then on deposit in the Pre-Funding Account, after giving effect to
any sale of Subsequent Loans to the Trust on such date.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.08.
1-22
<PAGE>
"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
August 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 August 15, 2005, 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, Moody's and Fitch.
"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.
"REO" means Loans as to which the real estate collateral has been
foreclosed upon and is owned by the Trust.
"Replaced Loan" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Loan to be repurchased
pursuant to Section 3.06 or which becomes a Liquidated Loan, an amount equal to
(a) the remaining principal amount
1-23
<PAGE>
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
fraction, expressed as a percentage,
(x) the numerator of which is the excess of (A) the Pool
Scheduled Principal Balance over (B) the Principal Balance of the most
senior Class of Certificates outstanding, and
(y) the denominator of which is the Pool Scheduled Principal
Balance.
1-24
<PAGE>
"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.
"Servicer Termination Trigger Event" will be deemed to have occurred on
any Payment Date on which (i) Cumulative Realized Losses exceed 10% of the
Cut-off Date Pool Principal Balance or (ii) the aggregate unpaid principal
balance of Loans that were delinquent 60 days or more as of the end of the prior
Due Period (including the unpaid principal balance of Loans in foreclosure and
REO) exceeds 18% of the Cut-off Date Pool Principal Balance.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Loans whose name appears on
a list of servicing officers appearing in an Officer's Certificate furnished to
the Trustee by the Servicer, as the same may be amended from time to time.
"Sixty-Day Delinquency Ratio" means, for any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Loans that were delinquent 60 days or more as of the
end of the prior Due Period (including the unpaid principal balance of Loans in
foreclosure and REO), and the denominator of which is the Pool Scheduled
Principal Balance of the Loans for such Payment Date.
"Stepdown Date" means the later of (A) the Payment Date in July 2003
and (B) the first Payment Date on which the Class A Principal Balance is less
than or equal to 55.40% of the Pool Scheduled Principal Balance.
"Subsequent Cut-off Date" means, with respect to a Subsequent Loan, the
last day of the month in which the Subsequent Transfer Date occurs.
"Subsequent Loan" means a Loan sold by the Seller to the Trust pursuant
to Section 2.03, such Loan being identified as such in the Subsequent Transfer
Instrument.
"Subsequent Transfer Date" means, with respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Loans are sold to
the Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument dated as of a Subsequent Transfer Date executed by the Seller
substantially in the form of Exhibit O, by which the Seller sells Subsequent
Loans to the Trust.
"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).
1-25
<PAGE>
"Transfer Agreement" means that Transfer Agreement between Conseco
Finance Securitizations Corp., as purchaser, and Conseco Finance Corp., as
seller, dated as of June 1, 2000.
"Trigger Event" exists for any Payment Date if (i) the Average
Sixty-Day Delinquency Ratio Test for the Loans is not satisfied or (ii) the
Cumulative Realized Losses Test for the Loans is not satisfied.
"Trust" means Conseco Finance Home Equity Loan Trust 2000-C.
"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
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) amounts in the Certificate Account, the Capitalized Interest
Account, the Pre-Funding Account and the Available Funds Cap Carryover Reserve
Account (including all proceeds of investments of funds in the Certificate
Account) and (ix) all proceeds and products of the foregoing.
"Trustee Advance" has the meaning assigned in Section 11.15.
"Underwriter" means Lehman Brothers Inc.
"Underwriting Agreement" means the Underwriting Agreement and related
Terms Agreement, each dated June 6, 2000, among the Originator, the Seller and
the Underwriter.
"Unpaid Class A Interest Shortfall" means, as to the 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 interest
from and including the immediately preceding Payment Date to but excluding the
current Payment Date thereon (to the extent payment thereof is legally
permissible) at the Class A Pass-Through Rate.
"Unpaid Class B-1 Interest Shortfall" means, with respect to the Class
B-1 Certificates and any Payment Date, the amount, if any, of the Class B-1
Interest Shortfall for the prior Payment Date, plus interest from and including
the immediately preceding Payment Date to but excluding the current Payment Date
thereon (to the extent payment thereof is legally permissible) at the Class B-1
Pass-Through Rate.
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, with
respect to the Class B-1 Certificates and any Payment Date, the amount, if any,
of the Class B-1 Liquidation Loss Interest Shortfall for the prior Payment Date,
plus interest from and including the immediately preceding Payment Date to but
excluding the current Payment Date thereon (to the extent payment thereof is
legally permissible) at the Class B-1 Pass-Through Rate.
1-26
<PAGE>
"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 interest from and including
the immediately preceding Payment Date to but excluding the current Payment Date
(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 the Class
M-1 Certificates and any Payment Date, the amount, if any, of the Class M-1
Interest Shortfall for the prior Payment Date, plus interest from and including
the immediately preceding Payment Date to but excluding the current Payment Date
thereon (to the extent payment thereof is legally permissible) at the Class M-1
Pass-Through Rate.
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, with
respect to the Class M-1 Certificates and any Payment Date, the amount, if any,
of the Class M-1 Liquidation Loss Interest Shortfall for the prior Payment Date,
plus interest from and including the immediately preceding Payment Date to but
excluding the current Payment Date thereon (to the extent payment thereof is
legally permissible) at the Class M-1 Pass-Through Rate.
"Unpaid Class M-2 Interest Shortfall" means, with respect to the Class
M-2 Certificates and any Payment Date, the amount, if any, of the Class M-2
Interest Shortfall for the prior Payment Date, plus interest from and including
the immediately preceding Payment Date to but excluding the current Payment Date
(to the extent payment thereof is legally permissible) at the Class M-2 Pass-
Through Rate.
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, with
respect to the Class M-2 Certificates and any Payment Date, the amount, if any,
of the Class M-2 Liquidation Loss Interest Shortfall for the prior Payment Date,
plus interest from and including the immediately preceding Payment Date to but
excluding the current Payment Date thereon (to the extent payment thereof is
legally permissible) at the Class M-2 Pass-Through Rate.
"Weighted Average Debt Consolidation Percentage" means the weighted
average, by Scheduled Principal Balance, of Loans, the proceeds of which were
used by the related Obligors for the purpose of debt consolidation.
"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 A, Class M-1, Class
M-2, Class B-1 and Class B-2 Pass-Through Rates, weighted on the basis of the
respective Class A, Class M-1, Class M-2, Class B-1 and Class B-2 Principal
Balances immediately prior to such Payment Date.
1-27
<PAGE>
SECTION 1.03. Calculation of Interest on the Certificates. Interest on
the Certificates shall be computed on the basis of actual days elapsed in a year
of 360 days.
1-28
<PAGE>
ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF LOANS
-----------------------------------------
SECTION 2.01. Closing.
a. There is hereby created, by the Seller as settlor, a separate trust
which shall be known as Conseco Finance Home Equity Loan Trust 2000-C. The Trust
shall be administered pursuant to the provisions of this Agreement for the
benefit of the Certificateholders and the Class C Certificateholder.
b. The Seller hereby transfers, assigns, sets over and otherwise
conveys to the Trustee on behalf of the Trust, by execution and delivery of an
assignment substantially in the form of Exhibit D hereto, all the right, title
and interest of the Seller in and to the 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. Each such transfer and assignment is intended by the
Seller to be a sale of such assets for all purposes, including, without
limitation, the Federal Bankruptcy Code, to the end that all such assets will
hereafter cease to be the property of the Seller and would not be includable in
the estate of the Seller or the Originator for purposes of Section 541 of the
Federal Bankruptcy Code.
c. Although the parties intend that each conveyance pursuant to this
Agreement of the Seller's right, title and interest in and to the Loans
(including the Subsequent Loans) shall constitute a purchase and sale and not a
loan, if such conveyances are deemed to be loans, the parties intend that the
rights and obligations of the parties to such loans shall be established
pursuant to the terms of this Agreement. If the conveyances are deemed to be
loans, the parties further intend and agree that the Originator and the Seller
shall be deemed to have granted to the Trustee and the Originator and the Seller
do hereby grant to the Trustee, a perfected first-priority security interest in
the Trust Fund and that this Agreement shall constitute a security agreement
under applicable law. If the trust created by this Agreement terminates prior to
the satisfaction of the claims of any Person under any Certificate or Class C
Certificate, the security interest created hereby shall continue in full force
and effect and the Trustee shall be deemed to be the collateral agent for the
benefit of such Person.
SECTION 2.02. Conditions to the Closing. On or before the Closing Date,
the Seller shall deliver or cause to be delivered the following documents to the
Trustee:
a. The List of Loans attached to this Agreement as Exhibit L, certified
by the Chairman of the Board, President or any Vice President of the Seller.
b. A certificate of an officer of the Originator substantially in the
form of Exhibit E hereto on behalf of the Seller and the Originator.
c. An Opinion of Counsel for the Seller substantially in the form of
Exhibit F hereto.
2-1
<PAGE>
d. A letter, acceptable to the Underwriter, from PricewaterhouseCoopers
LLP or another nationally recognized accounting firm, stating that such firm has
reviewed the Initial Loans on a statistical sampling basis and setting forth the
results of such review.
e. Copies of resolutions of the board of directors of the Seller or of
the executive committee of the board of directors of the Seller approving the
execution, delivery and performance of this Agreement and the transactions
contemplated hereunder, certified in each case by the secretary or an assistant
secretary of the Seller.
f. Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota.
g. An Officer's Certificate listing the Servicer's Servicing Officers.
h. Evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy.
i. Evidence of deposit in the Certificate Account of all funds received
with respect to the Loans from the Cut-off Date to the Closing Date, other than
principal due on or before the Cut- off Date, together with an Officer's
Certificate to the effect that such amount is correct.
j. The Loan Files for the Initial 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 executed copy of the Transfer Agreement.
l. Evidence of the deposit of $33,995,134.05 in the Pre-Funding
Account.
m. Evidence of the deposit of $0 in the Capitalized Interest Account.
n. Evidence of the deposit of $10,000 in the Available Funds Cap
Carryover Reserve Account.
o. Letters from each of the Rating Agencies evidencing the following
ratings for the Certificates:
2-2
<PAGE>
Moody's Fitch
Class S&P Rating Rating Rating
------------- ---------- ------ ------
A............ AAA Aaa AAA
M-1.......... AA Aa2 AA
M-2.......... A A2 A
B-1.......... BBB+ Baa1 BBB+
SECTION 2.03. Conveyance of the Subsequent Loans.
a. Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Loans identified on the List of Loans
attached to the Subsequent Transfer Instrument, including all rights to receive
payments on or with respect to the Subsequent Loans due after the related
Subsequent Cut-off Date, and all items with respect to such Subsequent Loans in
the related Loan Files. The transfer to the Trustee by the Seller of the
Subsequent Loans shall be absolute and is intended by the Seller, the Trustee,
the Certificateholders and the Class C Certificateholder to constitute and to be
treated as a sale of the Subsequent Loans by the Seller or the Originator to the
Trust. Such transfer and assignment is intended by the Seller to be a sale of
such assets for all purposes including, without limitation, the Federal
Bankruptcy Code, to the end that all such assets will hereafter cease to be
property of the Seller and would not be includable in the estate of the Seller
for purposes of Section 541 of the Federal Bankruptcy Code.
The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Loans. The purchase price of Subsequent Loans shall be paid solely with amounts
in the Pre-Funding Account. This Agreement shall constitute a fixed price
contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.
b. The Seller shall transfer to the Trustee the Subsequent Loans, and
the Trustee shall release funds from the Pre-Funding Account only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee with an
Addition Notice at least five Business Days prior to the Subsequent
Transfer Date and shall have provided any information reasonably
requested by the Trustee with respect to the Subsequent Loans;
(ii) the Seller shall have delivered the related Loan File for
each Subsequent Loan to the Trustee at least two Business Days prior to
the Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument substantially in the form of
Exhibit O, which shall include a List of Loans identifying the related
Subsequent Loans;
2-3
<PAGE>
(iv) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the Seller shall not be
insolvent nor shall it have been made insolvent by such transfer nor
shall it be aware of any pending insolvency;
(v) such sale and transfer shall not result in a material
adverse tax consequence to the Trust (including the REMIC) or the
Certificateholders or Class C Certificateholder;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an
Officer's Certificate, substantially in the form attached hereto as
Exhibit P, confirming the satisfaction of each condition precedent and
the representations specified in this Section 2.03 and in Sections
3.01, 3.02, 3.03, 3.04 and 3.05;
(viii) the Seller and the Originator shall have delivered to
the Trustee Opinions of Counsel addressed to S&P, Moody's, Fitch 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 loan to value ratio
greater than 100%, and;
(x) The Seller shall have delivered to the Trustee an executed
copy of a Subsequent Transfer Agreement between the Originator and the
Seller.
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 S&P, Moody's, Fitch, the Underwriter and the
Trustee) that is in form, substance and methodology the same as
delivered under Section 2.02(d) of this Agreement, except that it shall
address the Subsequent Loans and their conformity in all material
respects to the characteristics described in Sections 2.03 (b)(ix) and
3.04(b) of this Agreement.
(ii) Evidence that, as a result of the purchase by the Trust
of the Subsequent Loans, none of the ratings assigned to the Class A
Certificates as of the Closing Date by S&P, Moody's or Fitch will be
reduced, withdrawn or qualified.
(iii) Evidence that the aggregate Cut-off Date Principal
Balances of the Subsequent Loans, not specifically identified as
Subsequent Loans as of the Closing Date, do not exceed 25% of the
Original Aggregate Certificate Principal Balance.
2-4
<PAGE>
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.
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 an election for the Trust (exclusive of the
Pre-Funding Account, the Capitalized Interest Account and the Available Funds
Cap Carryover Reserve Account to be treated as a REMIC under the Code for such
taxable year and all subsequent taxable years, and the Trustee shall sign such
return. In furtherance of the foregoing, the Trustee (at the direction of the
Originator, the Seller or the Servicer), the Originator, the Seller and the
Servicer shall take, or refrain from taking, all such action as is necessary to
maintain the status of the Trust as a REMIC under the REMIC Provisions of the
Code, including, but not limited to, the taking of such action as is necessary
to cure any inadvertent termination of REMIC status. For purposes of the REMIC
election (i) the Certificates shall be designated as the "regular interests" in
the REMIC and (ii) the Class C Certificate shall be designated as the sole class
of "residual interests" in the REMIC. The Trustee shall not permit the creation
of any "interests" in the REMIC (within the meaning of the REMIC Provisions)
other than the Certificates and the Class C Certificate.
b. The Certificates are being issued in six classes. The following
terms of the Certificates are irrevocably established as of the Closing Date:
2-5
<PAGE>
Original Class
Class Pass-Through Rate Per Annum Principal Balance
------------ ----------------------------------------- ------------------
Class A a floating rate per annum equal to the $ 310,800,000
lesser of (a) one-month LIBOR plus
0.37%, or (b) the Available Funds
Pass-Through Rate, but in no case
more than 14.0%.
Class M-1 a floating rate per annum equal to the $ 25,400,000
lesser of (a) one-month LIBOR plus
0.75%, or (b) the Available Funds
Pass-Through Rate, but in no case
more than 14.0%.
Class M-2 a floating rate per annum equal to the $ 24,400,000
lesser of (a) one-month LIBOR plus
1.60%, or (b) the Available Funds
Pass-Through Rate, but in no case
more than 14.0%.
Class B-1 a floating rate per annum equal to the $ 10,200,000
lesser of (a) one-month LIBOR plus
2.05%, or (b) the Available Funds
Pass-Through Rate, but in no case
more than 14.0%.
Class B-2 a floating rate per annum equal to the $ 23,200,000
lesser of (a) one-month LIBOR plus
2.05%, or (b) the Available Funds
Pass-Through Rate, but in no case
more than 14.0%.
Class P None $ 100
c. The Closing Date, which is the day on which the Trust will issue all
of its regular and residual interests, is hereby designated as the "startup day"
of the REMIC within the meaning of Section 860G(a)(9) of the Code.
d. After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall (i) accept any contribution of assets to the
Trust, (ii) dispose of any portion of the Trust other than as provided in
Sections 3.06, 3.07 and 8.06, (iii) engage in any transaction that would result
in the imposition of tax on "prohibited transactions," as defined in Section
860F(a)(1) of the Code, (iv) accept any contribution after the Closing Date that
is subject to the tax imposed by Section 860G(d) of the Code or (v) engage in
any activity or enter into any agreement that would result in the receipt by the
Trust of any "net income from foreclosure property" as defined in Section
860G(c)(2) of the Code, unless, prior to any such action set forth in clauses
(i), (ii), (iii), (iv) or (v),
2-6
<PAGE>
the Trustee shall have received an unqualified Opinion of Counsel, which opinion
shall not be an expense of the Trust, stating that such action will not,
directly or indirectly, (A) adversely affect the status of the Trust as a REMIC
or the status of the Certificates and Class C Certificate as "regular interests"
and the sole class of "residual interests," respectively, therein, in each case
for federal income tax purposes, (B) affect the distributions payable hereunder
to the Certificateholders or the Class C Certificateholders or (C) result in the
imposition of any lien, charge or encumbrance upon the Trust.
e. Upon the acquisition of any real property (including interests in
real property), or any personal property incident thereto, in connection with
the default of a Loan, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Trust of such property subsequent to the period then permitted by the Code will
not result in the imposition of any taxes on "prohibited transactions" of the
Trust, as defined in Section 860F of the Code, or cause the Trust to fail to
qualify as a REMIC at any time that the Certificates or Class C 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 Trust of any income
attributable to any asset which is neither a qualified mortgage nor a permitted
investment within the meaning of the REMIC Provisions.
SECTION 2.06. Seller Option to Substitute for Prepaid Loans. The Seller
may, at its option, substitute new loans for Loans as to which a Principal
Prepayment in Full has been received by the Servicer prior to September 7, 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 Officer's Certificate, substantially in the
form of Exhibit J-3 hereto, to the Trustee certifying that such Loan is
an Eligible Substitute Loan;
(iii) the Seller shall have delivered to the Trustee evidence
of filing of a UCC-1 financing statement executed by the Seller as
debtor, naming the Trustee as secured party and filed in Minnesota,
listing such Loan to be substituted as collateral;
(iv) the Seller shall have delivered to the Trustee an
executed assignment to the Trustee on behalf of the Trust in recordable
form for the mortgage securing such Loan to be substituted;
2-7
<PAGE>
(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 September 7, 2000;
(vi) the Seller shall have delivered to the Trustee an Opinion
of Counsel (a) to the effect that the substitution of such Loan for
such Prepaid Loan will not cause the Trust to fail to qualify as a
REMIC at any time under then applicable REMIC Provisions or cause any
"prohibited transaction" that will result in the imposition of a tax
under such REMIC Provisions and (b) to the effect of paragraph 9 of
Exhibit F hereto; and
(vii) if the Principal Prepayment received in respect of such
Prepaid Loan is greater than the Scheduled Principal Balance of the
Loan to be substituted, such excess shall be distributed to
Certificateholders on the related Payment Date as a prepayment of
principal. Upon satisfaction of such conditions, the Trustee shall add
such Loan to be substituted to the List of Loans. Any substitutions
pursuant to this Section 2.06 may be accomplished on a loan-by-loan
basis or on an aggregate basis as to all Prepaid Loans with respect to
a given calendar month.
2-8
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
The Seller and the Originator make the following representations and
warranties. The Trustee will rely on the representations and warranties in
accepting the Loans in trust and issuing the Certificates and the Class C
Certificate on behalf of the Trust. The repurchase or substitution and
indemnification obligations of the Originator set forth in Section 3.06
constitute the sole remedies available to the Trust, the Certificateholders or
the Class C Certificateholder for a breach of a representation or warranty of
the Originator set forth in Sections 2.03, 3.02, 3.03, 3.04 or 3.05 of this
Agreement, or in the Officer's Certificates delivered pursuant to Sections
2.02(j) or 2.03(b)(vii) of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Seller. The
Seller represents and warrants to the Certificateholders and the Class C
Certificateholder, effective on the Closing Date and each Subsequent Transfer
Date, that:
a. Organization and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Seller is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Seller.
b. Authorization; Binding Obligations. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and to create the Trust and
cause it to make, execute, deliver and perform its obligations under this
Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and to cause the Trust to
be created. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Seller enforceable in accordance with
its terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.
c. No Consent Required. The Seller is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.
d. No Violations. The execution, delivery and performance of this
Agreement by the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court or the Certificate of
Incorporation or Bylaws of the 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.
3-1
<PAGE>
e. Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its properties
or with respect to this Agreement, the Certificates or the Class C Certificate
which, if adversely determined, would in the opinion of the Seller have a
material adverse effect on the transactions contemplated by this Agreement.
f. Licensing. The Seller is duly licensed in each state in which Loans
were originated to the extent the Seller is required to be licensed by
applicable law in connection with the origination and servicing of the Loans.
SECTION 3.02. Representations and Warranties Regarding Each Loan. The
Originator has made the following representations and warranties to the Seller
in the Transfer Agreement, which representations and warranties the Seller has
assigned to the Trustee for the benefit of the Certificateholders and the Class
C Certificateholder, as of the Closing Date with respect to each Loan identified
on the List of Loans attached to this Agreement as Exhibit L and as of each
Subsequent Transfer Date with respect to each Subsequent Loan identified on the
List of Loans attached to the related Subsequent Transfer Instrument:
a. List of Loans. The information set forth in the List of Loans is
true and correct as of its date.
b. Payments. No scheduled payment due under the Loan was delinquent
over 59 days as of the Cut-off Date if an Initial Loan or 30 days as of the
related Cut-off Date or Subsequent Cut-off Date, if an Additional Loan or a
Subsequent Loan.
c. Costs Paid and No Waivers. The terms of the Loan have not been
waived, altered or modified in any respect, except by instruments or documents
identified in the Loan File. All costs, fees and expenses incurred in making,
closing and perfecting the lien of the Loan have been paid. The subject real
property has not been released from the lien of such Loan.
d. Binding Obligation. The Loan is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally.
e. No Defenses. The Loan is not subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Loan or the exercise of any right
thereunder will not render the Loan unenforceable in whole or in part or subject
to any right of rescission, setoff, counterclaim or defense, including the
defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
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
3-2
<PAGE>
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. LTV. The loan to value ratio 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
Certificate unlawful or render the Loan unenforceable. The Originator has duly
executed a valid blanket assignment of the Loans transferred to the Seller, and
has transferred all its right, title and interest in such Loans, including all
rights the Originator may have against the originating lender with respect to
Loans originated by a lender other than the Originator, to the Seller. The
blanket assignment, any and all documents executed and delivered by the
Originator pursuant to Sections 2.01(b) and 2.03(b), and this Agreement each
constitutes the legal, valid and binding obligation of the Originator
enforceable in accordance with its respective terms.
i. Compliance with Law. At the date of origination of the Loan, all
requirements of any federal and state laws, rules and regulations applicable to
the Loan, including, without limitation, usury and truth in lending laws, have
been complied with and the Originator shall for at least the period of this
Agreement, maintain in its possession, available for the Trustee's inspection,
and shall deliver to the Trustee upon demand, evidence of compliance with all
such requirements.
j. Loan in Force. The Loan has not been satisfied or subordinated in
whole or in part or rescinded, and the real estate securing such Loan has not
been released from the lien of such Loan in whole or in part.
k. Valid Lien. The Loan has been duly executed and delivered by the
Obligor, and the lien created thereby has been duly recorded, or has been
delivered to the appropriate governmental authority for recording and will be
duly recorded within 180 days, and constitutes a valid and perfected first
priority lien on the real estate described in such Loan.
l. Capacity of Parties. The signature(s) of the Obligor(s) on the Loan
are genuine and all parties to the Loan had full legal capacity to execute the
Loan.
m. Good Title. The Originator is the sole owner of the Loan and has the
authority to sell, transfer and assign such Loan to the Seller under the terms
of the Transfer Agreement. 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.
3-3
<PAGE>
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 provides for monthly payments which
fully amortize the Loan over its term.
p. Enforceability. The 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 the Loan, including the List of Loans, are true and
correct. Any copies of documents provided by the Originator are accurate and
complete (except that, if the Loan 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. The Loan was originated by a home equity lender in the
ordinary course of such lender's business.
t. Underwriting Guidelines. The Loan was 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 the 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. 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
3-4
<PAGE>
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. Title Insurance. The Loan 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 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 Loan have been
timely and appropriately adjusted, if such adjustment is required, and the
respective Obligor timely and appropriately advised.
y. Lien Priority. The Loan is secured by a first priority lien.
z. Prepayment Term. No Prepayment Charges are payable under the Loan
after the 60th month following the origination date of the Loan.
aa. Credit Life. No proceeds of any Loan were used to purchase single
premium credit life insurance.
SECTION 3.03. Additional Representations and Warranties. The Seller
hereby represents and warrants to the Trustee for the benefit of the
Certificateholders and the Class C Certificateholder, as of the Closing Date
with respect to each Loan identified on the List of Loans attached to this
Agreement as Exhibit L and as of each Subsequent Transfer Date with respect to
each Subsequent Loan identified on the List of Loans attached to the related
Subsequent Transfer Instrument:
a. Lawful Assignment. The Loan was not originated in and is not subject
to the laws of any jurisdiction whose laws would make the transfer of the Loan
under this Agreement or pursuant to transfers of the Certificates or Class C
Certificate unlawful or render the Loan unenforceable. The Seller has duly
executed a valid blanket assignment of the Loans transferred to the Trust, and
has transferred all its right, title and interest in such Loans. The blanket
assignment, any and all documents executed and delivered by the Seller pursuant
to Sections 2.01(b) and 2.03(b), and this Agreement each constitutes the legal,
valid and binding obligation of the Seller enforceable in accordance with its
respective terms.
b. Good Title. The Seller is the sole owner of the Loan and has the
authority to sell, transfer and assign such Loan to the Trust under the terms of
this Agreement. There has been no assignment, sale or hypothecation of the Loan
by the Seller. The Seller has good and marketable title to the Loan, free and
clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Loan to the Trust.
SECTION 3.04. Representations and Warranties Regarding the Loans in the
Aggregate. The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders and the Class C
Certificateholder, as of the Closing Date with respect to the Initial
3-5
<PAGE>
Loans and Additional Loans, and as of each Subsequent Transfer Date with respect
to the related Subsequent Loans, that:
a. Amounts. As of the Closing Date, the sum of the Cut-off Date Pool
Principal Balance, plus the Original Pre-Funded Amount, equals at least the
Original Aggregate Certificate Principal Balance. By Cut-off Date Principal
Balance, the Initial Loans and Additional Loans specifically identified as of
the Closing Date represent at least 75% of the Original Aggregate Certificate
Principal Balance.
b. Characteristics. The Loans have the following characteristics: (i)
100% are secured by a mortgage, deed of trust or security deed creating a first
lien on the related real estate; (ii) none has a remaining maturity or original
maturity of more than 360 months; (iii) no Initial Loan has a final scheduled
payment date later than May 2030, no Additional Loan has a final scheduled
payment date later than August 2030 and no Subsequent Loan has a final scheduled
payment date later than September 2030; (iv) the Loan Interest Rate on each is
subject to semiannual adjustment, after an initial period of up to 36 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 on any
adjustment date by more than 6.0% per annum and will not exceed a maximum rate
specified in the related Loan; (v) none has a gross margin of less than 3.0% or
more than 13.0%; (vi) none had a principal balance at origination of more than
$445,000; and (vii) none has a Loan Interest Rate prior to the first adjustment
date of less than 7.80% or a Minimum Loan Rate of less than 4.40 %.
The weighted average (by Scheduled Principal Balance) loan to value
ratio of the Loans as of the Post-Funding Payment Date will not be more than 100
basis points more than such ratio with respect to the Initial Loans.
The weighted average (by Scheduled Principal Balance) of the Loan
Interest Rates of the Loans as of the Post-Funding Payment Date will not be more
than 25 basis points less than the weighted average of the Loan Interest Rates
of the Initial Loans.
The weighted average (by Scheduled Principal Balance) gross margin on
the Loans as of the Post-Funding Payment Date will not be less than 6.0%.
The percentage (by Scheduled Principal Balance) of the Loans as of the
Post-Funding Payment Date which are identified by the Originator under its
standard underwriting criteria as "B," "C," and "D" credits will not be more
than 300 basis points, 200 basis points, and 100 basis points, respectively,
more than the percentage of Initial Loans identified as "B," "C," and "D"
credits.
As of the Post-Funding Payment Date, the percentage (by Scheduled
Principal Balance) of Loans identified by the Originator as debt consolidation
loans will not be greater than 15.00%.
3-6
<PAGE>
The weighted average (by Scheduled Principal Balance) of the
debt-to-income ratio of the Loans as of the Post-Funding Payment Date will not
be more than 42.75%.
The percentage (by Scheduled Principal Balance) of the Loans as of the
Post-Funding Payment Date which are owner-occupied will be at least 99.00%.
The percentage (by Scheduled Principal Balance) of the Loans as of the
Post-Funding Payment Date which are single family will be at least 95.00%.
The percentage (by Scheduled Principal Balance) of Loans as of the
Post-Funding Payment Date that are purchase money loans will not be less than
35%.
c. Geographic Concentrations. By Cut-off Date Principal Balance, 12.54%
of the Initial and Additional Loans are secured by property located in
California, 9.81% in Ohio, 6.81% in Maryland, 5.66% in Colorado, 5.36% in
Georgia, and 5.01% in North Carolina. No other state represents more than 5.00%
of the aggregate Cut-off Date Principal Balances of the Initial and Additional
Loans.
No more than 1% of the Loans by Cut-off Date Principal Balance are
secured by property located in an area with the same five-digit zip code.
d. Marking Records. The Originator has caused the portions of the
Electronic Ledger relating to the Loans to be clearly and unambiguously marked
to indicate that such Loans constitute part of the Trust and are owned by the
Trust in accordance with the terms of the Trust created hereunder.
e. No Adverse Selection. No adverse selection procedures have been
employed in selecting the Loans.
f. Lender Concentration. No more than 5.0% of the Loans, by Cut-off
Date Pool Principal Balance, were originated by any one lender, except that
Decision One Mortgage Corp. originated not more than 8.63% of the Loans.
g. Home Ownership and Equity Protection Act. With respect to any Loan
subject to the Home Ownership and Equity Protection Act of 1994, each such Loan
has been originated and serviced in compliance with the provisions thereof.
SECTION 3.05. Representations and Warranties Regarding the Loan Files.
The Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders and the Class C
Certificateholder that:
a. Possession. On the Closing Date, the Trustee or a Custodian will
have possession of each original Initial Loan and Additional Loan and the
related Loan File. On each Subsequent Transfer Date, the Originator will have
possession of each original Subsequent Loan being
3-7
<PAGE>
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 Certificateholder
interest in such Loan and which breach has not been cured within such time;
provided, however, that (i) in the event that a party other than the Originator
first becomes aware of such breach, such discovering party shall notify the
Originator in writing within 5 Business Days of the date of such discovery and
(ii) with respect to any Loan incorrectly described on the List of Loans with
respect to Cut-off Date Principal Balance, which the Originator would otherwise
be required to repurchase pursuant to this Section, the Originator may, in lieu
of repurchasing such Loan, deliver to the Seller for deposit in the Certificate
Account within 90 days from the date of such discovery cash in an amount
sufficient to cure such deficiency or discrepancy. Any such cash so deposited
shall be distributed to Certificateholders and the Class C Certificateholder on
the immediately following Payment Date as a collection of principal or interest
on such Loan, according to the nature of the deficiency or discrepancy.
Notwithstanding any other provision of this Agreement, the obligation of the
Originator under this Section shall not terminate upon a Service Transfer
pursuant to Article VII.
b. On or prior to the date that is the second anniversary of the
Closing Date, the Originator may, at its election, substitute an Eligible
Substitute Loan for a Loan that it is obligated to repurchase pursuant to
Section 3.06(a) (such Loan being referred to as the "Replaced Loan") upon
satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the Loan
to be substituted for the Replaced Loan and the Loan File related to
such Loan and the Originator shall have marked the Electronic Ledger
indicating that such Loan constitutes part of the Trust;
(ii) the Loan to be substituted is an Eligible Substitute Loan
and the Originator delivers an Officer's Certificate, substantially in
the form of Exhibit J-2 hereto, to the Trustee certifying that such
Loan is an Eligible Substitute Loan;
3-8
<PAGE>
(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
Opinion of Counsel (a) to the effect that the substitution of such Loan
for such Replaced Loan will not cause the Trust to fail to qualify as a
REMIC at any time under then applicable REMIC 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
(v) 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 Officer's Certificate required by clause (ii)
above a certification that such deposit has been made.
Upon satisfaction of such conditions, the Trustee shall add such Loan
to be substituted to, and delete such Replaced Loan from, the List of Loans.
Such substitution shall be effected prior to the first Determination Date that
occurs more than 90 days after the Originator becomes aware, or should have
become aware, or receives written notice from the Trustee, of the breach
referred to in Section 3.06(a). Promptly after any such substitution of a Loan,
the Originator shall give written notice of such substitution to S&P, Moody's
and Fitch.
c. If the Originator is required to repurchase a Loan under Section
3.06(a) or has elected to substitute an Eligible Substitute Loan for a Loan
under Section 3.06(b), and if the reason for such repurchase or substitution is
that the Originator has failed to deliver to the Trustee the Loan File for the
Loan to be repurchased or substituted for (except in the case of a failure to
deliver evidence of the lien on the related improved property and evidence of
due recording of such mortgage, deed of trust or security deed, if available),
then, notwithstanding the time periods set out in Sections 3.06(a) and 3.06(b),
the Originator shall either (i) repurchase such Loan, at its respective
Repurchase Price, within 30 days of the Closing Date, or (ii) substitute an
Eligible Substitute Loan for the Loan within 90 days of the Closing Date.
d. The Originator shall defend and indemnify the Seller, the Trustee,
the Certificateholders, and the Class C Certificateholder against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of any third-party action arising out of any breach of any such
representation and warranty.
SECTION 3.07. No Repurchase Under Certain Circumstances.
Notwithstanding any provision of this Agreement to the contrary, no repurchase
or substitution pursuant to Section 3.06 shall be made unless the Originator (at
its own expense) obtains for the Trustee an Opinion of Counsel addressed to the
Trustee that any such repurchase or substitution would not, under the REMIC
Provisions, (i) cause the Trust to fail to qualify as a REMIC while any regular
interest in such REMIC is outstanding, (ii) result in a tax on prohibited
transactions within the meaning of
3-9
<PAGE>
Section 860F(a)(2) of the Code or (iii) constitute a contribution after the
startup day subject to tax under Section 860G(d) of the Code. The Originator
diligently shall attempt to obtain such Opinion of Counsel. In the case of a
repurchase or deposit pursuant to Section 3.06(a) or (b), the Originator shall,
notwithstanding the absence of such opinion as to the imposition of any tax as
the result of such purchase or deposit, repurchase such Loan or make such
deposit and shall guarantee the payment of such tax by paying to the Trustee the
amount of such tax not later than five Business Days before such tax shall be
due and payable to the extent that amounts previously paid over to and then held
by the Trustee pursuant to Section 6.06 are insufficient to pay such tax and all
other taxes chargeable under Section 6.06. Pursuant to Section 6.06, the
Servicer is hereby directed to withhold, and shall withhold and pay over to the
Trustee, an amount sufficient to pay such tax and any other taxes imposed on
"prohibited transactions" under Section 860F(a)(i) of the Code or imposed on
"contributions after startup date" under Section 860G(d) of the Code from
amounts otherwise distributable to the Class C Certificateholder. The Servicer
shall give notice to the Trustee at the time of such repurchase of the amounts
due from the Originator pursuant to the guarantee of the Originator described
above and give notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant
to this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
In the event any tax that is guaranteed by the Originator pursuant to
this Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
3-10
<PAGE>
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
-----------------------------------------------------------
SECTION 4.01. Transfer of Loans.
a. On or prior to the Closing Date, or the Subsequent Transfer Date in
the case of Subsequent Loans, the Originator shall deliver the Loan Files to the
Trustee. The Trustee shall maintain the Loan Files at its office or with a duly
appointed Custodian, who shall act as the agent of the Trustee on behalf of the
Certificateholders. The Trustee may release a Loan File to the Servicer pursuant
to Section 5.07. The Originator has filed a form UCC-1 financing statement
regarding the sale of the Loans to the Seller, and shall file continuation
statements in respect of such UCC-1 financing statement as if such financing
statement were necessary to perfect the security interest granted pursuant to
Section 2.01. The Originator shall take any other actions necessary to maintain
the perfection of such security interest.
b. If at any time during the term of this Agreement the Originator does
not have a long- term senior debt rating of A- or higher from S&P, A2 or higher
by Moody's (if rated by Moody's) and A- or higher from Fitch (if rated by
Fitch), (i) the Originator shall within 30 days execute and deliver to the
Trustee (if it has not previously done so) endorsements of each Loan and
assignments in recordable form of each mortgage, deed of trust or security deed
securing a Loan, and (ii) the Trustee, at the Originator's expense, shall within
60 days file in the appropriate recording offices the assignments to the Trustee
on behalf of the Trust of each mortgage, deed of trust or security deed securing
a Loan; provided, however, that the recording of such assignments shall not be
required if the Trustee receives written confirmation from S&P, Moody's and
Fitch that the ratings of the Certificates would not be reduced or withdrawn by
the failure to execute and file such assignments; provided further, however,
that the recording of such assignments shall not be required in any state if and
to the extent 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 a Loan secured by
real estate located in such state.
c. The Originator shall, within sixty (60) days after the Closing Date,
submit to the appropriate recording offices the assignment to the Trustee on
behalf of the Trust of each mortgage, deed of trust or security deed securing a
Loan and covering property located in Maryland.
SECTION 4.02. Costs and Expenses. The Servicer agrees to pay all
reasonable costs and disbursements in connection with the vesting (including the
perfection and the maintenance of perfection, as against all third parties) in
the Trust of all right, title and interest in and to the Loans (including,
without limitation, the mortgage or deed of trust on the related real estate
granted thereby).
4-1
<PAGE>
ARTICLE V
SERVICING OF LOANS
------------------
SECTION 5.01. Responsibility for Loan Administration. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Loans and perform or cause to be performed all contractual and customary
undertakings of the holder of the Loans to the Obligor. Conseco Finance Corp.,
if it is the Servicer, may delegate some or all of its servicing duties to a
wholly owned subsidiary of Conseco Finance Corp., for so long as such subsidiary
remains, directly or indirectly, a wholly owned subsidiary of Conseco Finance
Corp. Notwithstanding any such delegation Conseco Finance Corp. shall retain all
of the rights and obligations of the Servicer hereunder. The Trustee, at the
request of a Servicing Officer, shall furnish the Servicer with any powers of
attorney or other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder. Conseco Finance
Corp. is hereby appointed the Servicer until such time as any Service Transfer
shall be effected under Article VII.
The Servicer shall make adjustments to the interest rate and the
payments due on the 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
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
5-2
<PAGE>
conformity to Monthly Reports prepared pursuant to Article VI and compliance
with the standards represented to exist as to each Loan in this Agreement.
b. At all times during the term hereof, the Servicer shall keep
available a copy of the List of Loans at its principal executive office for
inspection by Certificateholders.
c. A Certificateholder holding Certificates representing in the
aggregate at least 5% of the Aggregate Certificate Principal Balance shall have
the rights of inspection afforded to the Trustee pursuant to this Section 5.04.
SECTION 5.05. Certificate Account.
a. On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which shall be an Eligible Account.
The Servicer shall pay into the Certificate Account, as promptly as practicable
(but not later than the next Business Day) following receipt thereof, all
amounts received with respect to the Loans, including Prepayment Charges, other
than extension fees and assumption fees, which fees shall be retained by the
Servicer as compensation for servicing the Loans, and other than Liquidation
Expenses permitted by Section 5.08. The Trustee shall hold all amounts paid into
the Certificate Account under this Agreement in trust for the Trustee, the
Certificateholders and the Class C Certificateholder until payment of any such
amounts is authorized under this Agreement. Only the Trustee may withdraw funds
from the Certificate Account.
b. If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as such,
invest the amounts in the Certificate Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Payment
Date. Any investment of funds in the Certificate Account shall be made in
Eligible Investments held by a financial institution in accordance with the
following requirements: (1) all Eligible Investments shall be held in an account
with such financial institution in the name of the Trustee, and the agreement
governing such account shall be governed by the laws of the State of Minnesota,
(2) with respect to securities held in such account, such securities shall be
certificated securities (as such term is used in N.Y. U.C.C. ss. 8-102(4)(i)),
securities deemed to be certificated securities under applicable regulations of
the United States government, or uncertificated securities issued by an issuer
organized under the laws of the State of New York or the State of Delaware, (ii)
either (A) in the possession of such institution, (B) in the possession of a
clearing corporation (as such term is used in Minn. Stat. ss. 8-102(5)) in the
State of New York, registered in the name of such clearing corporation or its
nominee, not endorsed for collection or surrender or any other purpose not
involving transfer, not containing any evidence of a right or interest
inconsistent with the Trustee's security interest therein, and held by such
clearing corporation in an account of such institution, (C) held in an account
of such institution with the Federal Reserve Bank of New York or the Federal
Reserve Bank of Minneapolis, or (D) in the case of uncertificated securities,
issued in the name of such institution, and (iii) identified, by book entry or
otherwise, as held for the account of, or pledged to, the Trustee on the records
of such institution, and such institution shall have sent the Trustee a
confirmation thereof, and (3) with respect to repurchase obligations held in
such account, such repurchase obligations shall be identified by such
institution, by book entry or
5-3
<PAGE>
otherwise, as held for the account of, or pledged to, the Trustee on the records
of such institution, and the related securities shall be held in accordance with
the requirements of clause (2) above. Once such funds are invested, such
institution shall not change the investment of such funds. All income and gain
from such investments shall be added to the Certificate Account and distributed
on such Payment Date pursuant to Section 8.04(b). An amount equal to any net
loss on such investments shall be deposited in the Certificate Account by the
Seller out of its own funds immediately as realized. The Servicer and the
Trustee shall in no way be liable for losses on amounts invested in accordance
with the provisions hereof. Funds in the Certificate Account not so invested
must be insured to the extent permitted by law by the Federal Deposit Insurance
Corporation. "Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by, or federal funds sold by any
depository institution or trust company (including the Trustee or any
Affiliate of the Trustee, acting in its commercial capacity)
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, the commercial
paper or other short-term debt obligations of such depository
institution or trust company are rated at least A-1+ by S&P, P-1 by
Moody's (if rated by Moody's), and F-1+ by Fitch (if rated by Fitch)
and (B) any other demand or time deposit or certificate of deposit
which is fully insured by the Federal Deposit Insurance Corporation;
(iii) shares of an investment company registered under the
Investment Company Act of 1940, whose shares are registered under the
Securities Act of 1933 and have a rating of AAA by S&P, Aaa by Moody's
and AAA by Fitch, and whose only investments are in securities
described in clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any State thereof which have a credit rating of at least AA
from each of the Rating Agencies that has rated the corporation;
provided, however, that securities issued by any particular corporation
will not be Eligible Investments to the extent that investment therein
will cause the then outstanding principal amount of securities issued
by such corporation and held as part of the corpus of the Trust to
exceed 10% of amounts held in the Certificate Account;
5-4
<PAGE>
(vi) commercial paper having a rating of at least A-1+ from
S&P, at least P-1 from Moody's (if rated by Moody's) and at least F-1+
from Fitch (if rated by Fitch) at the time of such investment;
(vii) money market funds rated AAAm or AAAm-G by S&P and Aaa
or Aa by Moody's; 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. The Servicer acknowledges that to the extent
that regulations of the Comptroller of the Currency or other applicable
regulatory agency grant the Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Servicer specifically
waives receipt of such confirmations.
c. If at any time the Trustee receives notice (from any of the Rating
Agencies, the Servicer or otherwise) that the Certificate Account has ceased to
be an Eligible Account, the Trustee shall, as soon as practicable but in no
event later than five Business Days of the Trustee's receipt of such notice,
transfer the Certificate Account and all funds and Eligible Investments therein
to an Eligible Account. Following any such transfer, the Trustee shall notify
each of the Rating Agencies and the Servicer of the location of the Certificate
Account.
SECTION 5.06. Enforcement.
a. The Servicer shall, consistent with customary servicing procedures,
act with respect to the Loans in such manner as will maximize the receipt of
principal and interest on such Loans and Liquidation Proceeds with respect to
Liquidated Loans.
b. In accordance with the standard of care specified in Section 5.02,
the Servicer may, in its own name, if possible, or as agent for the Trust,
commence proceedings for the foreclosure of any subject real estate, or may take
such other steps that in the Servicer's reasonable judgment will maximize
Liquidation Proceeds with respect to the Loan, including, for example, the sale
of the Loan to a third party for foreclosure or enforcement and, in the case of
any default on a related prior mortgage loan, the advancing of funds to correct
such default and the advancing of funds to pay off a related prior mortgage
loan, which advances are Liquidation Expenses that will be reimbursed to the
Servicer out of related Liquidation Proceeds before the related Net Liquidation
Proceeds are paid to Certificateholders and the Class C Certificateholder. The
Servicer shall also deposit in the
5-5
<PAGE>
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 Certificateholder.
d. The Servicer may grant to the Obligor on any Loan any rebate, refund
or adjustment out of the Certificate Account that the Servicer in good faith
believes is required because of the Principal Prepayment in Full of the Loan.
The Servicer will not permit any rescission or cancellation of any Loan.
e. The Servicer shall enforce any due-on-sale clause in a Loan if such
enforcement is called for under its then current servicing policies for
obligations similar to the Loans, provided that such enforcement is permitted by
applicable law and will not adversely affect any applicable insurance policy. If
an assumption of a Loan is permitted by the Servicer, upon conveyance of the
related property the Servicer shall use its best efforts to obtain an assumption
agreement in connection therewith.
f. Any provision of this Agreement to the contrary notwithstanding, the
Servicer shall not agree to the modification or waiver of any provision of a
Loan at a time when such Loan is not in default or such default is not
reasonably foreseeable, if such modification or waiver would both (i) be treated
as a taxable exchange under Section 1001 of the Code or any proposed, temporary
or final Treasury Regulations promulgated thereunder and (ii) cause the Trust to
fail to qualify as a REMIC or cause the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions.
SECTION 5.07. Trustee to Cooperate.
a. Upon payment in full on any Loan, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the Servicer)
on the next succeeding Payment Date by certification of a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received in connection with such payments which are required to be deposited in
the Certificate Account pursuant to Section 5.05 have been so deposited) and
shall request delivery of the Loan and Loan File to the Servicer. Upon receipt
of such delivery and request, the Trustee shall promptly release or cause to be
released such Loan and Loan File to the Servicer. Upon receipt of such Loan and
Loan File, each of Conseco Finance Corp. (if different from the Servicer) and
the Servicer is authorized to execute an instrument in satisfaction of such Loan
and to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate any lien on the
related real estate. The Servicer shall determine when a
5-6
<PAGE>
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 Certificateholder 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 any Loan, the Servicer shall use
its own funds to satisfy any shortage in the Obligor's remittance so long as
such shortage 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
5-7
<PAGE>
insurance coverage) if such Loan is secured by a first priority mortgage, deed
of trust or security deed or the initial principal balance of such Loan exceeds
$30,000.
SECTION 5.10. Merger or Consolidation of Servicer. Any Person into
which the Servicer may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Servicer shall be a party shall be the successor of
the Servicer hereunder, provided such Person shall be an Eligible Servicer,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Servicer shall promptly notify each of the Rating Agencies in the event it is a
party to any merger, conversion or consolidation.
5-8
<PAGE>
ARTICLE VI
REPORTS AND TAX MATTERS
-----------------------
SECTION 6.01. Monthly Reports. No later than one Business Day following
each Determination Date, the Servicer shall deliver to the Trustee and the
Rating Agencies a Monthly Report, substantially in the form of Exhibit M hereto.
SECTION 6.02. Officer's Certificate. Each Monthly Report pursuant to
Section 6.01 shall be accompanied by a certificate of a Servicing Officer
substantially in the form of Exhibit H, certifying the accuracy of the Monthly
Report and that no Event of Termination or event that with notice or lapse of
time or both would become an Event of Termination has occurred, or if such event
has occurred and is continuing, specifying the event and its status.
SECTION 6.03. Other Data. In addition, the Originator and (if different
from the Originator) the Servicer shall, on request of the Trustee or any of the
Rating Agencies, furnish the Trustee and/or any such Rating Agencies such
underlying data as may be reasonably requested.
SECTION 6.04. Annual Report of Accountants. On or before May 1 of each
year, commencing May 1, 2001, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to issue to the Servicer a report that such firm
has examined selected documents, records and management's assertions relating to
loans serviced by the Servicer and stating that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified in the Mortgage Bankers Association of America's
Uniform Single Attestation Program for Mortgage Bankers, or any successor
uniform program, except for such significant exceptions or errors in records
that, in the opinion of such firm, generally accepted attestation standards
requires it to report.
SECTION 6.05. Statements to Certificateholders and the Class C
Certificateholder.
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class 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;
6-1
<PAGE>
(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 Principal Balance of the Class A Certificate after
giving effect to the distribution of principal on such Payment Date;
(v) the Pool Scheduled Principal Balance for such Payment
Date;
(vi) Senior Enhancement Percentage for the Certificates and
whether or not a Trigger Event exists;
(vii) the Pool Factor;
(viii) the number and aggregate principal balances of Loans
delinquent (a) 30-59 days, (b) 60-89 days and (c) 90 or more days;
(ix) the aggregate principal balance of any Defaulted Loans
(including REO);
(x) the number and aggregate principal balance of Loans that
have been granted extensions to their payment schedules;
(xi) Average Sixty-Day Delinquency Ratio Test for the Loans
(as set forth in Exhibit M hereto);
(xii) Cumulative Realized Losses Test for the Loans (as set
forth in Exhibit M hereto);
(xiii) the number of Liquidated Loans, their aggregate unpaid
principal balance (separately including the unpaid principal balance of
all REO), and the Net Liquidation Loss on such Loans;
(xiv) the Pre-Funded Amount for such Payment Date; and
(xiv) a description of the Servicer Termination Trigger Event,
if one exists.
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.
6-2
<PAGE>
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.
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 M-1 Formula
Distribution Amount for such Payment Date exceeds the Class M-1
Distribution Amount for such Payment Date;
(iv) the Class M-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
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 (xiv) 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 of a
6-3
<PAGE>
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.
e. 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 M-2 Formula
Distribution Amount for such Payment Date exceeds the Class M-2
Distribution Amount for such Payment Date;
(iv) the Class M-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 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 (xiv) 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 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.
6-4
<PAGE>
f. 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 B-1 Formula
Distribution Amount for such Payment Date exceeds the Class B-1
Distribution Amount for such Payment Date;
(iv) the Class B-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
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 (xiv) 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 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 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:
6-5
<PAGE>
(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 Class B-2 Formula
Distribution Amount 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; and
(v) the information set forth in clauses (v) through (xiv) 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.
h. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class P Certificate a copy of the monthly
statements forwarded to the Holders of Class 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
6-6
<PAGE>
Trustee for the Certificateholders shall also be provided to the Rating
Agencies and the Class C Certificateholder.
SECTION 6.06. Payment of Taxes. The Servicer shall be responsible for
and agrees to prepare, make and timely file all federal, state, local or other
tax returns, information statements and other returns and documents of every
kind and nature whatsoever required to be made or filed by or on behalf of the
Trust pursuant to the Code and other applicable tax laws and regulations. Each
such return, statement and document shall, to the extent required by the Code or
other applicable law and at the request of the Servicer, be signed on behalf of
the Trust by the Trustee. The Trustee shall have no responsibility whatsoever
for the accuracy or completeness of any such return, statement or document. The
Servicer agrees to indemnify the Trustee and hold it harmless for, from, against
and in respect to any and all liability, loss, damage and expense which may be
incurred by the Trustee based upon or as a result of the Trustee's execution of
any and all such tax returns, statements and documents. The Servicer, if and for
so long as it is a Class C Certificateholder, shall be designated the "tax
matters person" on behalf of the Trust in the same manner as a partnership may
designate a "tax matters partner," as such term is defined in Section 6231(a)(7)
of the Code. To the extent permitted by the REMIC Provisions, any subsequent
holder of the Class C Certificate, by acceptance thereof, irrevocably designates
and appoints the Servicer as its agent to perform the responsibilities of the
"tax matters person" on behalf of the Trust if, and during such time as, the
Servicer is not the holder of the Class C Certificate. The Servicer may, at its
expense, retain such outside assistance as it deems necessary in the performance
of its obligations under this paragraph. The Servicer shall provide to the
Internal Revenue Service the name, title, address and telephone number of the
person who will serve as the representative of the REMIC.
Each of the Holders of the Certificates or the Class C Certificate, by
acceptance thereof, agrees to file tax returns consistent with and in accordance
with any elections, decisions or other reports made or filed with regard to
federal, state or local taxes on behalf of the Trust. The Servicer, as tax
matters person or as agent for the tax matters person, shall represent the Trust
in connection with all examinations of the Trust's affairs by tax authorities,
including resulting administrative and judicial proceedings. Each of the Holders
of the Certificates and Class C Certificate, by acceptance thereof, agrees to
cooperate with the Servicer in such matters and to do or refrain from doing any
or all things reasonably required by the Servicer to conduct such proceedings,
provided that no such action shall be required by the Servicer of any
Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class C Certificateholder shall pay, on behalf of the Trust, any
foreign, federal, state or local income, property, excise, sales, receipts or
any other similar or related taxes or charges which may be imposed upon the
Trust as a REMIC or otherwise and shall, to the extent provided in Section
10.06, be entitled to be reimbursed out of the Certificate Account or, if such
tax or charge results from a failure by the Trustee, the Originator or any
Servicer to comply with the provisions of Section 2.04 or 3.07, or a failure by
any Servicer to comply with the provisions of this Section 6.06, the Trustee,
the Originator or such Servicer, as the case may be, shall indemnify the Class C
Certificateholder for the payment of any such tax or charge. The Trustee shall
be entitled to withhold from amounts otherwise distributable to the Class C
Certificateholder any taxes or charges payable by the Class C Certificateholder
hereunder.
6-7
<PAGE>
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Originator shall provide to the Internal
Revenue Service and the persons specified in Sections 860(E)(e)(5) and (6) of
the Code all information necessary for the application of Section 860E(e) and
any other applicable provision of the Code with respect to the transfer of the
Class C Certificate to such disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Originator shall, upon the written request of
persons designated in Section 860E(e)(5) of the Code, furnish to such requesting
party and the Internal Revenue Service information sufficient to compute the
present value of anticipated excess inclusions within 60 days of the receipt of
such written request.
6-8
<PAGE>
ARTICLE VII
SERVICE TRANSFER
----------------
SECTION 7.01. Events of Termination. "Event of Termination" means the
occurrence of any of the following:
a. Any failure by the Servicer to make any payment or deposit required
to be made hereunder (including an Advance) and the continuance of such failure
for a period of four Business Days;
b. Failure on the Servicer's part to observe or perform in any material
respect any covenant or agreement in this Agreement (other than a covenant or
agreement which is elsewhere in this Section specifically dealt with) which
continues unremedied for 30 days;
c. Any assignment or delegation by the Servicer of its duties or rights
hereunder except as specifically permitted hereunder, or any attempt to make
such an assignment or delegation;
d. A court having jurisdiction in the premises shall have entered a
decree or order for relief in respect of the Servicer in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Servicer, as the case may be,
or for any substantial liquidation of its affairs;
e. The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing;
f. The failure of the Servicer to be an Eligible Servicer;
g. If Conseco Finance Corp. is the Servicer, Conseco Finance Corp.'s
servicing rights under its master seller-servicer agreement with GNMA are
terminated by GNMA; or
h. A Servicer Termination Trigger Event shall occur.
SECTION 7.02. Transfer. If an Event of Termination has occurred and is
continuing, either the Trustee or Certificateholders, in the aggregate,
representing 25% or more of the Aggregate Certificate Principal Balance, by
notice in writing to the Servicer (and to the Trustee if given by the
Certificateholders) may terminate all (but not less than all) of the Servicer's
management, administrative, servicing and collection functions (such termination
being herein called a "Service
7-1
<PAGE>
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.
SECTION 7.04. Notification to Certificateholders and Class C
Certificateholder.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to S&P, to Moody's,
to Fitch, to the Certificateholders and to the Class C Certificateholder at
their respective addresses appearing on the Certificate Register.
7-2
<PAGE>
b. Within 10 days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to S&P, to Moody's, to Fitch, to the Certificateholders
and to the Class C Certificateholder at their respective addresses appearing on
the Certificate Register.
SECTION 7.05. Effect of Transfer.
a. After the Service Transfer, the Trustee or new Servicer shall notify
Obligors to make payments directly to the new Servicer that are due under the
Loans after the effective date of the Service Transfer.
b. After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Loans and the new Servicer shall have all of such obligations,
except that the replaced Servicer will transmit or cause to be transmitted
directly to the new Servicer for its own account, promptly on receipt and in the
same form in which received, any amounts (properly endorsed where required for
the new Servicer to collect them) received as payments upon or otherwise in
connection with the Loans.
c. A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Originator pursuant to Article X and Sections 3.07, 11.06 and 11.12(f))
other than those relating to the management, administration, servicing or
collection of the Loans after the Service Transfer.
SECTION 7.06. Transfer of Certificate Account. Notwithstanding the
provisions of Section 7.02, if the Certificate Account shall be maintained with
the Servicer and an Event of Termination shall occur and be continuing, the
Servicer shall, after five days' written notice from the Trustee, or in any
event within ten days after the occurrence of the Event of Termination,
establish a new account or accounts in trust for the Certificateholders and the
Class C Certificateholder conforming with the requirements of this Agreement at
the corporate trust department of the Trustee or with an institution other than
the Servicer and promptly cause the Trustee to transfer all funds in the
Certificate Account to such new account, which shall thereafter be deemed the
Certificate Account for the purposes hereof.
7-3
<PAGE>
ARTICLE VIII
PAYMENTS
--------
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a
Certificate or Class C Certificate as of a Record Date shall be paid on the next
succeeding Payment Date by check mailed to such Certificateholder or Class C
Certificateholder at the address for such Certificateholder or Class C
Certificateholder appearing on the Certificate Register (or, if such
Certificateholder holds Certificates of a Class with an aggregate Percentage
Interest of at least 5% of such Class and so requests, by wire transfer pursuant
to instructions delivered to the Trustee at least 10 days prior to such Payment
Date), the sum equal to such Certificateholder's or Class C Certificateholder's
Percentage Interest of the Class A Distribution Amount, the Class M-1
Distribution Amount, the Class M-2 Distribution Amount, the Class B-1
Distribution Amount, the Class B-2 Distribution Amount, any Available Funds Cap
Carryover Amount withdrawn from the Available Funds Cap Carryover Reserve
Account pursuant to Section 8.09, the Class P Distribution Amount and the Class
C Distribution Amount, as applicable. Final payment of any Certificate or the
Class C Certificate shall be made only upon presentation and surrender of such
Certificate or Class C Certificate at the office or agency of the Paying Agent.
b. Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Book-Entry Certificates. Neither the Trustee, the Certificate Registrar, the
Seller nor the Originator shall have any responsibility therefor except as
otherwise provided by applicable law. To the extent applicable and not contrary
to the rules of the Depository, the Trustee shall comply with the provisions of
the form of the Certificates as set forth in Exhibits A through C hereto, and
the Class C Certificate as set forth in Exhibit I hereto.
c. The Trustee shall either act as the paying agent or appoint an
Eligible Institution to be the paying agent (in either such case, the "Paying
Agent") to make the payments to the Certificateholders and the Class C
Certificateholder required hereunder. The Trustee's corporate trust operations
department, with an office at 180 East Fifth Street, Third Floor, St. Paul,
Minnesota 55101, Attention: Tamara Schultz-Fugh, shall initially act as Paying
Agent. The Trustee shall require the Paying Agent (if other than the Trustee) to
agree in writing that all amounts held by the Paying Agent for payment hereunder
will be held in trust for the benefit of the Certificateholders and the Class C
Certificateholder and that it will notify the Trustee of any failure by the
Servicer to make funds available to the Paying Agent for the payment of amounts
due on the Certificates and the Class C Certificate.
8-1
<PAGE>
SECTION 8.02. Advances.
a. Not later than one Business Day following the Determination Date,
the Servicer shall advance all Delinquent Payments for the immediately preceding
Due Period by depositing the aggregate amount of such Delinquent Payments in the
Certificate Account; provided, however, that the Servicer shall be obligated to
advance Delinquent Payments only to the extent that the Servicer, in its sole
discretion, expects to be able to recover such Advances from funds subsequently
available therefor in the Certificate Account in accordance with Section
8.04(b). If the Servicer fails to advance all Delinquent Payments required under
this Section 8.02, the Trustee shall be obligated to advance such Delinquent
Payments pursuant to Section 11.15.
b. The Servicer shall be entitled to reimbursement of an Advance from
subsequent funds available therefor in the Certificate Account in accordance
with Section 8.04(b).
SECTION 8.03. [Reserved].
SECTION 8.04. Permitted Withdrawals from the Certificate Account;
Payments.
a. The Trustee shall, from time to time as provided herein, make
withdrawals from the Certificate Account of amounts deposited in said account
pursuant to Section 5.05 that are attributable to the Loans for the following
purposes:
(i) to make payments in the amounts and in the manner provided
for in Section 8.04(b);
(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.
8-2
<PAGE>
b. On each Payment Date, the Trustee shall apply the Amount Available
for such Payment Date to make payment in the following order of priority,
subject to Section 8.04(c) and the last sentence of this Section 8.04(b):
(1) if neither Conseco Finance Corp. nor a wholly owned
subsidiary of the Originator is the Servicer, to pay the Monthly
Servicing Fee and any other compensation owed to the Servicer pursuant
to Section 7.03;
(2) to pay the Class A Formula Interest Distribution Amount to
the Class A Certificateholders;
(3) after payment of the amounts specified in clauses (1) and
(2) above, to the Class M-1 Certificateholders the Class M-1 Formula
Interest Distribution Amount;
(4) after payment of the amounts specified in clauses (1)
through (3) above, to the Class M-2 Certificateholders the Class M-2
Formula Interest Distribution Amount;
(5) after payment of the amounts specified in clauses (1)
through (4) above, to the Class B-1 Certificateholders the Class B-1
Formula Interest Distribution Amount;
(6) after payment of the amounts specified in clauses (1)
through (5) above, to pay principal in respect of the Class A
Certificates as follows:
(i) if there is a Class A Principal Deficiency Amount
for such Payment Date, the remaining Amount Available to the
Class A Certificates; 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;
(7) after payment of the amounts specified in clauses (1)
through (6) above, to the Class M-1 Certificateholders the Class M-1
Formula Principal Distribution Amount;
(8) after payment of the amounts specified in clauses (1)
through (7) above, to the Class M-2 Certificateholders the Class M-2
Formula Principal Distribution Amount;
(9) after payment of the amounts specified in clauses (1)
through (8) above, to the Class B-1 Certificateholders the Class B-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 (ii) any Unpaid Class M-1 Liquidation Loss Interest
Shortfall;
8-3
<PAGE>
(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
(ii) any Unpaid Class M-2 Liquidation Loss Interest
Shortfall;
(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 (ii) any Unpaid
Class B-1 Liquidation Loss Interest Shortfall;
(13) after payment of the amounts specified in clauses (1)
through (12) above, to the Class B-2 Certificateholders as follows: (i)
the Class B-2 Formula Interest Distribution Amount; and (ii) the Class
B-2 Formula Principal Distribution Amount;
(14) after payment of the amounts specified in clauses (1)
through (13) above, from amounts otherwise payable to the Class C
Certificateholder under clause (20) below, to the Available Funds Cap
Carryover Reserve Account (i) in respect of payments, if any, of the
Available Funds Cap Carryover Amount as described in Section 8.09, and
(ii) the amount needed, if any, to replenish the Available Funds Cap
Carryover Reserve Account so that it maintains a minimum balance of
$10,000;
(15) if Conseco Finance Corp. or a wholly owned subsidiary of
Conseco Finance Corp. is the Servicer, after payment of the amounts
specified in clauses (1) through (14) above, to pay the Servicer the
Monthly Servicing Fee.
(16) after payment of the amounts specified in clauses (1)
through (15) above, to reimburse the Servicer or the Trustee, as
applicable, for any unreimbursed Advances made with respect to the
Loans in respect of current or prior Payment Dates;
(17) if such Payment Date is on or after the Additional
Principal Entitlement Date, then, pursuant to Section 8.06(f), after
payment of the amounts specified in clauses (1) through (16) above, the
Additional Principal Distribution Amount to the Certificates as a
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 A Certificates until paid in
full;
(ii) 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 such Class, until paid in full.
(18) after payment of the amounts specified in clauses (1)
through (17) above, to reimburse the Class C Certificateholder for
expenses incurred by and reimbursable to it pursuant to Section 10.06;
8-4
<PAGE>
(19) after payment of the amounts specified in clauses (1)
through (18) above, if the Payment Date is after the Prepayment Term
and the Class Principal Balance of each Class of Certificates has been
reduced to zero, to the Class P Certificateholders until the Class P
Principal Balance is reduced to zero; and
(20) after payment of the amounts specified in clauses (1)
through (19) above, to pay the remainder, if any, of the Amount
Available to the Class C Certificateholder.
If the Trustee shall not have received the applicable Monthly Report by
any Payment Date, the Trustee shall, in accordance with this Section 8.04(b),
distribute all funds then in the Certificate Account to Certificateholders, to
the extent of such funds, on such Payment Date.
c. Notwithstanding the priorities set forth above, any Pre-Funded
Amount deposited in the Certificate Account shall be applied solely to pay
principal of the Class A Certificates until reduced to zero, then to the Class
M-1, Class M-2 and Class B-1 Certificates in that order of priority, and any
amount withdrawn from the Capitalized Interest Account and deposited in the
Certificate Account shall be applied solely as described in Section 8.07.
d. On each Payment Date, the Trustee will pay to the Class P
Certificateholders all Prepayment Charges included in the Certificate Account
for such Payment Date.
SECTION 8.05. Reassignment of Repurchased and Replaced Loans. Upon
receipt by the Trust, by deposit in the Certificate Account, of the Repurchase
Price under Section 3.06(a), or upon receipt by the Trust of an Eligible
Substitute Loan under Section 3.06(b) and receipt by the Trust, by deposit in
the Certificate Account, of any additional amount under Section 3.06(b)(v), 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)(v), the Servicer shall be deemed to have
released any claims to such Loan as a result of Advances with respect to such
Loan.
SECTION 8.06. Class C Certificateholder's Purchase Option or Auction
Sale; Additional Principal Distribution Amount.
a. The Class C Certificateholder shall, subject to subsection (b)
hereof, have the option to purchase all of the Loans and all property acquired
in respect of any Loan remaining in the Trust at a price (such price being
referred to as the "Minimum Purchase Price") equal to the greater of:
(i) the sum of (x) 100% of the principal balance of each Loan
(other than any Loan as to which title to the underlying property has
been acquired and whose fair market value is included pursuant to
clause (y) below), together with accrued and unpaid interest on each
such Loan at a rate per annum equal to the Weighted Average
Pass-Through Rate, plus
8-5
<PAGE>
(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 A 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 M-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 M-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 B-1 Available Funds Cap Carryover Amount, the Class B-2
Formula Interest Distribution Amount, and the Class B-2 Available Funds
Cap Carryover Amount due on the Payment Date occurring in the calendar
month following such purchase date (less any amounts on deposit in the
Certificate Account on such purchase date and representing payments of
interest in respect of the Loans at a rate per annum equal to the
Weighted Average Pass-Through Rate).
b. The purchase by the Class C Certificateholder of all of the Loans
pursuant to this Section 8.06 shall be conditioned upon:
(i) the Pool Scheduled Principal Balance, at the time of any
such purchase, aggregating not more than 20% of the Cut-off Date Pool
Principal Balance,
(ii) such purchase being made pursuant to a plan of complete
liquidation in accordance with Section 860F of the Code, as provided in
Section 12.04,
(iii) the Class C Certificateholder having provided the
Trustee and the Depository (if any) with at least 30 days' written
notice, and
(iv) the Trustee not having accepted a qualifying bid for the
Loans pursuant to subsection (e) below.
If such option is exercised, the Class C Certificateholder shall provide to the
Trustee (at the Class C Certificateholder's expense) the certification required
by Section 12.04, which certificate shall constitute a plan of complete
liquidation within the meaning of Section 860F of the Code, and the Trustee
shall promptly sign such certification and release to the Class C
Certificateholder the Loan Files pertaining to the Loans being purchased.
c. The Class C Certificateholder may assign its rights under this
Section 8.06, separately from its other rights as Holder of the Class C
Certificate, by giving written notice of such assignment to the Trustee.
Following the Trustee's receipt of such notice of assignment, the Trustee shall
8-6
<PAGE>
recognize only such assignee (or its assignee in turn) as the Person entitled to
exercise the purchase option set forth in Section 8.06(a).
d. The Servicer shall notify the Trustee and the Class C
Certificateholder (whether or not the Class C Certificateholder has then
assigned its rights under this Section 8.06 pursuant to subsection (c)) no later
than two Business Days after the Determination Date relating to the first Due
Period which includes the date on which the Pool Scheduled Principal Balance
first becomes less than 20% of the Cut-off Date Pool Principal Balance, to the
effect that the Pool Scheduled Principal Balance is then less than 20% of the
Cut-off Date Pool Principal Balance.
e. If the Class C Certificateholder (or its assignee) has not delivered
to the Trustee the notice of exercise of its purchase option required by
subsection (b) by the Payment Date occurring in the month following the
Determination Date specified in subsection (d), then promptly after the
following Payment Date the Trustee shall begin a process for soliciting bids in
connection with an auction for the Loans. The Trustee shall provide the Class C
Certificateholder (or its assignee) written notice of such auction at least 10
Business Days prior to the date bids must be received in such auction (the
"Auction Date").
If at least two bids are received, the Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Trustee shall accept the
highest of such remaining bids if it is equal to or in excess of the greater of
(i) the Minimum Purchase Price and (ii) the fair market value of the Loans and
related property (such amount being referred to as the "Minimum Auction Price").
If less than two bids are received or the highest bid after the resolicitation
process is completed is not equal to or in excess of the Minimum Auction Price,
the Trustee shall not consummate such sale. If a bid meeting the Minimum
Purchase Price is received, then the Trustee may, and if so requested by the
Class C Certificateholder shall, consult with a financial advisor, which may be
an underwriter of the Certificates, to determine if the fair market value of the
Loans and related property has been offered.
If the first auction conducted by the Trustee does not produce any bid
at least equal to the Minimum Auction Price, then the Trustee shall, beginning
on the Payment Date occurring approximately three months after the Auction Date
for the failed first auction, commence another auction in accordance with the
requirements of this subsection (e). If such second auction does not produce any
bid at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Payment Date occurring approximately three months after the
Auction Date for the failed second auction, commence another auction in
accordance with the requirements of this subsection (e), and shall continue to
conduct similar auctions approximately every three months thereafter until the
earliest of (i) delivery by the Class C Certificateholder or its assignee of
notice of exercise of its purchase option under subsection (a), (ii) receipt by
the Trustee of a bid meeting the conditions specified in the preceding
paragraph, or (iii) the Payment Date on which the principal balance of all the
Loans is reduced to zero.
If the Trustee receives a bid meeting the conditions specified in this
subsection (e), then the Trustee's written acceptance of such bid shall
constitute a plan of complete liquidation within the
8-7
<PAGE>
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 received from the Seller pursuant to
Section 2.02(m). The Capitalized Interest Account shall be entitled "Capitalized
Interest Account, U.S. Bank Trust National Association as Trustee for the
benefit of holders of Home Equity Loan Certificates, Series 2000-C." On the
Payment Date occurring in each of July 2000 and August 2000, if the Monthly
Report for such Payment Date indicates that the Amount Available (after payment
of the amount specified in clause (1) of Section 8.04(b) and including in the
Amount Available only payments in respect of interest on the Loans) is not
sufficient to pay the Class 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 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 August 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
8-8
<PAGE>
deposited in the Capitalized Interest Account by the Seller out of its own funds
immediately as realized.
SECTION 8.08. Pre-Funding Account.
a. On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible Account,
and shall deposit therein the amount received from the Seller pursuant to
Section 2.02(l). The Pre-Funding Account shall be entitled "Pre- Funding
Account, U.S. Bank Trust National Association as Trustee for the benefit of
holders of Home Equity Loan Certificates, Series 2000-C." Funds deposited in the
Pre-Funding Account shall be held in trust by the Trustee for the Holders of the
Certificates and the Class C Certificate for the uses and purposes set forth
herein.
b. On or before the Closing Date the Originator shall deposit in the
Pre-Funding Account the amount specified in Section 2.02(l). Amounts on deposit
in such account shall be withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre- Funding Account an amount equal to 100% of the
Cut-off Date Principal Balance of each Subsequent Loan transferred and
assigned to the Trustee on such Subsequent Transfer Date and pay such
amount to or upon the order of the Originator upon satisfaction of the
conditions set forth in Section 2.03(b) with respect to such transfer
and assignment.
(ii) On the Business Day immediately preceding the
Post-Funding Payment Date, the Trustee shall deposit into the
Certificate Account any amounts remaining in the Pre- Funding Account,
net of investment earnings. c. The Pre-Funding Account shall be part of
the Trust but not part of the REMIC. The Trustee on behalf of the Trust
shall be the legal owner of the Pre-Funding Account. The Seller shall
be the beneficial owner of the Pre- Funding Account, subject to the
foregoing power of the Trustee to transfer amounts in the Pre-Funding
Account to the Certificate Account. Funds in the Pre-Funding Account
shall, at the direction of the Servicer, be invested in Eligible
Investments of the kind described in clauses (i) and (ii)(A) of the
definition of "Eligible Investments" and that mature no later than the
Business Day prior to the next succeeding Payment Date. All amounts
earned on deposits in the Pre-Funding Account shall be taxable to the
Seller. The Trustee shall release to the Seller all investment earnings
in the Pre-Funding Account on the first Payment Date after the end of
the Pre-Funding Period.
SECTION 8.09. Available Funds Cap Carryover Reserve Account.
a. On or before the Closing Date, the Trustee shall establish the
Available Funds Cap Carryover Reserve Account on behalf of the Trust, which must
be an Eligible Account, and shall deposit therein $10,000 received from the
Seller pursuant to Section 2.02(n). The Available Funds Cap Carryover Reserve
Account shall be entitled "Available Funds Cap Carryover Reserve Account, U.S.
Bank Trust National Association as Trustee for the benefit of holders of Home
Equity Loan Certificates, Series 2000-C." On each Payment Date, if the Monthly
Report for such Payment Date
8-9
<PAGE>
indicates that there is an Available Funds Cap Carryover Amount for such Payment
Date, the Trustee shall withdraw such Available Funds Cap Carryover Amount, or
the amount of funds in the Available Funds Cap Carryover Reserve Account (net of
any investment earnings thereon), if less, and shall use such funds for
distribution on such Payment Date to pay, in the following order of priority:
(i) the Class A Available Funds Cap Carryover Amount, if any;
(ii) the Class M-1 Available Funds Cap Carryover Amount, if any;
(iii) the Class M-2 Available Funds Cap Carryover Amount, if any;
(iv) the Class B-1 Available Funds Cap Carryover Amount, if any; and
(v) the Class B-2 Available Funds Cap Carryover Amount, if any.
b. The Available Funds Cap Carryover Reserve Account shall be part of
the Trust but not part of the REMIC. The Trustee on behalf of the Trust shall be
the legal owner of the Available Funds Cap Carryover Reserve Account. The Seller
shall be the beneficial owner of the Available Funds Cap Carryover Reserve
Account, subject to the foregoing power of the Trustee to withdraw amounts in
the Available Funds Cap Carryover Reserve Account. Funds in the Available Funds
Cap Carryover Reserve Account shall, at the direction of the Class C
Certificateholder, 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 not otherwise needed to pay the Available Funds Cap
Carryover Amount or maintain a minimum balance of $10,000 in the Available Funds
Cap Carryover Reserve Account shall be distributed to the Seller on such Payment
Date. All amounts earned on amounts on deposit in the Available Funds Cap
Carryover Reserve Account shall be taxable to the Class C Certificateholder.
c. Any funds remaining in the Available Funds Cap Carryover Reserve
Account after the Final Payment Date shall be distributed to the Originator. Any
losses on such investments shall be deposited in the Available Funds Cap
Carryover Reserve Account by the Originator out of its own funds immediately as
realized.
8-10
<PAGE>
ARTICLE IX
THE CERTIFICATES AND THE CLASS C CERTIFICATE
--------------------------------------------
SECTION 9.01. The Certificates and the Class C Certificate. The Class
A, the Class M, the Class B, the Class P and the Class C Certificate shall be
substantially in the forms set forth in Exhibits A, B, C, Q and I, as
applicable, and shall, on original issue, be executed by the Trustee on behalf
of the Trust to or upon the order of the Originator. The Class A, the Class M
and the Class B Certificates shall be evidenced by (i) one or more Class A
Certificates evidencing $310,800,000 in Original Class A Principal Balance, (ii)
one or more Class M-1 Certificates evidencing $25,400,000 in Original Class M-1
Principal Balance, (iii) one or more Class M-2 Certificates evidencing
$24,400,000 in Original Class M-2 Principal Balance, (iv) one or more Class B-1
Certificates evidencing $10,200,000 in Original Class B-1 Principal Balance, (v)
one or more Class B-2 Certificates evidencing $23,200,000 in Original Class B-2
Principal Balance, and (vi) one Class P Certificate evidencing $100 in Original
Class P Principal Balance, beneficial ownership of such Classes of Certificates
(other than the Class P Certificate) to be held through Book-Entry Certificates
in minimum dollar denominations of $1,000 and integral multiples of $1.00 in
excess thereof. The Class C Certificate shall be evidenced by a single Class C
Certificate issued on the Closing Date to the Originator and shall represent
100% of the Percentage Interest of the Class C Certificate. The Certificates and
the Class C Certificate shall be executed by manual signature on behalf of the
Trustee by a duly authorized Responsible Officer or authorized signatory.
Certificates or the Class C Certificate bearing the signatures of individuals
who were at any time the proper officers of the Trustee shall bind the Trustee,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the execution and delivery of such Certificate or Class C
Certificate, or did not hold such offices at the date of such Certificates or
Class C Certificate. No Certificate or Class C Certificate shall be entitled to
any benefit under this Agreement, or be valid for any purpose, unless such
Certificate or Class C Certificate has been executed by manual signature in
accordance with this Section, and such signature upon any Certificate or Class C
Certificate shall be conclusive evidence, and the only evidence, that such
Certificates or Class C Certificate has been duly executed and delivered
hereunder. All Certificates and the Class C Certificate shall be dated the date
of their execution, except for those Certificates and the Class C Certificate
executed on the Closing Date, which shall be dated the Closing Date.
SECTION 9.02. Registration of Transfer and Exchange of Certificates and
the Class C Certificate.
a. The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.03 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and the Class C Certificate
and of transfers and exchanges of Certificates and the Class C Certificate as
herein provided. The Trustee initially appoints itself to be the "Certificate
Registrar" and transfer agent for the purpose of registering Certificates and
the Class C Certificate and transfers and exchanges of Certificates and the
Class C Certificate as provided herein. The Trustee will give prompt written
notice to Certificateholders, the Class C Certificateholder and the Servicer of
any change in the Certificate Registrar.
9-1
<PAGE>
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class P
or Class C Certificate shall be made by the Seller or any other Person unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933 (the "Act"), as amended, and any applicable state securities laws or is
made in accordance with the Act and laws. In the event that any such transfer is
to be made, (A) the Originator may require a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Originator that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Act and laws or is being made
pursuant to the Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee or the Originator, and (B) the Trustee shall require the
transferee to execute an investment letter substantially in the form of Exhibit
K attached hereto, which investment letter shall not be an expense of the
Trustee or the Originator. The Class P or Class C Certificateholder desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Originator and the Certificate Registrar against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws.
(2) No transfer of a Class 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 Trustee,
the Originator, the Seller and the Servicer either (i) that such person is
neither a Plan, nor acting on behalf of a Plan, subject to ERISA or to Section
4975 of the Code, or (ii) that the purchase and holding of the Certificate or
Class C Certificate by such Plan will not result in the assets of the Trust
being deemed to be Plan assets and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee, the
Originator or the Servicer to any obligation or liability in addition to those
undertaken in this Agreement.
(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
9-2
<PAGE>
and the proposed transferee shall each deliver to the Trustee an affidavit with
respect to any other information reasonably required by the Trustee pursuant to
the REMIC Provisions, including, without limitation, information regarding the
transfer of noneconomic residual interests and transfers of any residual
interest to or by a foreign person; provided, however, that, upon the delivery
to the Trustee of an Opinion of Counsel, in form and substance satisfactory to
the Trustee and rendered by Independent counsel, to the effect that the
beneficial ownership of a Class C Certificate by any Disqualified Organization
will not result in the imposition of federal income tax upon the Trust or any
Certificateholder or Class C Certificateholder or any other person or otherwise
adversely affect the status of the Trust as a REMIC, the foregoing prohibition
on transfers, sales and other dispositions, as well as the foregoing requirement
to deliver a certificate prior to any registration thereof, shall, with respect
to such Disqualified Organization, terminate. Notwithstanding any transfer, sale
or other disposition of a Class C Certificate, or any interest therein, to a
Disqualified Organization or the registration thereof in the Certificate
Register, such transfer, sale or other disposition and any registration thereof,
unless accompanied by the Opinion of Counsel described in the preceding
sentence, shall be deemed to be void and of no legal force or effect whatsoever
and such Disqualified Organization shall be deemed not to be a Class C
Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on a Class C Certificate, and shall be deemed to have
no interest whatsoever in a Class C Certificate. Each Class C Certificateholder,
by his acceptance thereof, shall be deemed for all purposes to have consented to
the provisions of this Section 9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance with the
provisions of this Section 9.02(b) shall be deemed to be void and of no legal
force or effect whatsoever and such transferee shall be deemed not to be the
Certificateholder or Class C Certificateholder, as applicable, for any purpose
hereunder, including, but not limited to, the receipt of distributions on the
Certificate or Class C Certificate, and shall be deemed to have no interest
whatsoever in the Certificate or Class C Certificate.
(5) The Trustee shall give notice to the Rating Agencies promptly
following any transfer, sale or other disposition of a Class C Certificate.
c. At the option of a Certificateholder or a Class C Certificateholder,
Certificates and the Class C Certificate may be exchanged for other Certificates
or Class C Certificate of authorized denominations of a like aggregate original
denomination, upon surrender of such Certificates or the Class C Certificate to
be exchanged at the Corporate Trust Office. Whenever any Certificates or the
Class C Certificate are so surrendered for exchange, the Trustee shall execute
and deliver the Certificates or Class C Certificate which the Certificateholder
or Class C Certificateholder making the exchange is entitled to receive. Every
Certificate or Class C Certificate presented or surrendered for transfer or
exchange shall be duly endorsed by, or shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the holder thereof or his or her attorney duly
authorized in writing.
d. Except as provided in paragraph (e) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the
9-3
<PAGE>
Depository shall maintain book-entry records with respect to the Certificate
Owners and with respect to ownership and transfers of such Certificates; (iii)
ownership and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of such Certificates for purposes of
exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners. All transfers by
Certificate Owners of Book-Entry Certificates shall be made in accordance with
the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall only
transfer Book-Entry Certificates of Certificate Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
e. If (x)(i) the Seller or the Depository advises the Trustee in
writing that the Depository is no longer willing or able properly to discharge
its responsibilities as Depository and (ii) the Trustee or the Originator is
unable to locate a qualified successor or (y) the Originator at its sole option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Originator nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository one Class A Certificate, one Class M-1 Certificate, one Class M-2
Certificate, one Class B-1 Certificate and one Class B-2 Certificate, each in
registered form registered in the name of the Depository's nominee, Cede & Co.,
the total face amount of which represents 100% of the Original Class Principal
Balance of each Class, respectively. Each such Certificate registered in the
name of the Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the Trustee
or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment is made to
9-4
<PAGE>
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
g. Each of the Certificates and the Class C Certificate shall be a
"security" for purposes of Article 8, Section 102(a)(15)(8) of the Uniform
Commercial Code and shall be governed by such Article 8 as in effect in the
State of Minnesota from time to time.
SECTION 9.03. No Charge; Disposition of Void Certificates or Class C
Certificate. No service charge shall be made to a Certificateholder or Class C
Certificateholder for any transfer or exchange of a Certificate or a Class C
Certificate, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of a Certificate or a Class C
Certificate. All Certificates and Class C Certificate surrendered for transfer
and exchange shall be disposed of in a manner approved by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or
Class C Certificate. If (a) any mutilated Certificate or Class C Certificate is
surrendered to the Certificate Registrar, or the Certificate Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate or Class C Certificate, and (b) there is delivered to the
Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate or Class C
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate or Class C Certificate, a new Certificate
or Class C Certificate of like tenor and original denomination. Upon the
issuance of any new Certificate or Class C Certificate under this Section 9.04,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. Any duplicate Certificate or Class C Certificate
issued pursuant to this Section 9.04 shall constitute complete and indefeasible
evidence of ownership of the Percentage Interest, as if originally issued,
whether or not the mutilated, destroyed, lost or stolen Certificate or Class C
Certificate shall be found at any time.
SECTION 9.05. Persons Deemed Owners. Prior to due presentation of a
Certificate or Class C Certificate for registration of transfer, the Servicer,
the Seller, the Trustee, the Paying Agent and the Certificate Registrar may
treat the person in whose name any Certificate or Class C Certificate is
registered as the owner of such Certificate or Class C Certificate for the
purpose of receiving remittances pursuant to Section 8.01 and for all other
purposes whatsoever, and none of the Servicer, the Seller, the Trustee, the
Certificate Registrar, the Paying Agent or any agent of the Servicer, the
Seller, the Trustee, the Paying Agent or the Certificate Registrar shall be
affected by notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' and Class C
Certificateholder 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,
9-5
<PAGE>
in such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders and the Class C Certificateholder as of the most
recent Record Date. If Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance apply in writing to
the Trustee (hereinafter referred to as "Applicants"), and such application
states that the Applicants desire to communicate with other Certificateholders
or the Class C Certificateholder with respect to their rights under this
Agreement or under the Certificates or the Class C Certificate and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders and the Class C Certificateholder
held by the Trustee. If such list is as of a date more than 90 days prior to the
date of receipt of such Applicants' request, the Trustee shall promptly request
from the Certificate Registrar a current list as provided above, and shall
afford such Applicants access to such list promptly upon receipt. Every
Certificateholder and the Class C Certificateholder, by receiving and holding a
Certificate or a Class C Certificate, agrees with the Certificate Registrar and
the Trustee that none of the Originator, the Certificate Registrar or the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders or the Class
C Certificateholder hereunder, regardless of the source from which such
information was derived.
SECTION 9.07. Authenticating Agents. The Trustee may appoint one or
more Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates or the Class C
Certificate. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class C Certificate by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class C Certificate "by the Trustee."
9-6
<PAGE>
ARTICLE X
INDEMNITIES
-----------
SECTION 10.01. Real Estate. The Seller and Originator will jointly and
severally defend and indemnify the Trust, the Trustee (including the Custodian
and any other agents of the Trustee) and the Certificateholders and the Class C
Certificateholder against any and all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel and expenses
of litigation arising out of or resulting from the use or ownership of any real
estate related to a Loan by the Originator or the Servicer or any Affiliate of
either. Notwithstanding any other provision of this Agreement, the obligation of
the Originator under this Section shall not terminate upon a Service Transfer
pursuant to Article VII, except that the obligation of the Originator under this
Section shall not relate to the actions of any subsequent Servicer after a
Service Transfer.
SECTION 10.02. Liabilities to Obligors. No obligation or liability to
any Obligor under any of the Loans is intended to be assumed by the Trust, the
Certificateholders or the Class C Certificateholder under or as a result of this
Agreement and the transactions contemplated hereby and, to the maximum extent
permitted and valid under mandatory provisions of law, the Trust, the
Certificateholders and the Class C Certificateholder expressly disclaim such
assumption.
SECTION 10.03. Tax Indemnification. The Originator agrees to pay, and
to indemnify, defend and hold harmless the Trust, the Trustee (including the
Custodian and any other agents of the Trustee), the Certificateholders and the
Class C Certificateholder from, any taxes which may at any time be asserted with
respect to, and as of the date of, the transfer of the Loans to the Trust,
including, without limitation, any sales, gross receipts, general corporation,
personal property, privilege or license taxes (but not including any federal,
state or other taxes arising out of the creation of the Trust and the issuance
of the Certificates and the Class C Certificate) and costs, expenses and
reasonable counsel fees in defending against the same, whether arising by reason
of the acts to be performed by the Originator, the Seller, the Servicer or the
Trustee under this Agreement or imposed against the Trust, a Certificateholder,
the Class C Certificateholder or otherwise.
SECTION 10.04. Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian and any other agents
of the Trustee), the Certificateholders and the Class C Certificateholder
against any and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation, in
respect of any action taken or omitted to be taken by the Servicer with respect
to any Loan. This indemnity shall survive any Service Transfer (but the original
Servicer's obligations under this Section 10.04 shall not relate to any actions
of any subsequent Servicer after a Service Transfer) and any payment of the
amount owing under, or any repurchase by the Originator of, any such Loan.
SECTION 10.05. Operation of Indemnities. Indemnification under this
Article shall include, without limitation, reasonable fees and expenses of
counsel and expenses of litigation. If the Originator or the Servicer has made
any indemnity payments to the Trustee pursuant to this Article
10-1
<PAGE>
and the Trustee thereafter collects any of such amounts from others, the Trust
will repay such amounts collected to the Originator or the Servicer, as the case
may be, without interest.
SECTION 10.06. REMIC Tax Matters. If a Class C Certificateholder,
pursuant to Section 6.06, pays any taxes or charges imposed upon the Trust as a
REMIC or otherwise, such taxes or charges, except to the extent set forth in the
following proviso, shall be expenses and costs of the Trust and the Class C
Certificateholder shall be entitled to be reimbursed therefor out of the
Certificate Account as provided in Section 8.04; provided, however, that any
such taxes or charges shall not be expenses or costs of the Trust, nor will the
Class C Certificateholder be entitled to reimbursement therefor out of the
Certificate Account, if and to the extent that such taxes or charges resulted
from a failure (i) by the Originator, the Trustee or any Servicer to comply with
the provisions of Section 2.05, (ii) by any Servicer to comply with the
provisions of Section 6.06, or (iii) by the Trustee to timely execute any tax
returns pursuant to Section 11.11.
10-2
<PAGE>
ARTICLE XI
THE TRUSTEE
-----------
SECTION 11.01. Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Termination and after the curing of all Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If an Event of Termination has
occurred (which has not been cured), the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:
a. Prior to the occurrence of an Event of Termination, and
after the curing of all such Events of Termination which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
c. The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Certificateholders
representing, in the aggregate, 25% or more of the Aggregate
Certificate Principal Balance relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement; and
d. The Trustee shall not be charged with knowledge of any
event referred to in Section 7.01 unless a Responsible Officer of the
Trustee at the Corporate Trust Office obtains actual knowledge of such
event or the Trustee receives written notice of such event
11-1
<PAGE>
from the Servicer or the Certificateholders representing, in the
aggregate, 25% or more of the Aggregate Certificate Principal Balance.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 11.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of a Servicing Officer, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any
counsel for the Originator, the Seller or the Servicer shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted by the Trustee hereunder in good faith and
in accordance with such Opinion of Counsel;
c. The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been cured), to
exercise such of the rights and powers vested in it by this Agreement,
and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
d. Prior to the occurrence of an Event of Termination and
after the curing of all Events of Termination which may have occurred,
the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do
by Certificateholders representing, in the aggregate, 25% or more of
the Aggregate Certificate Principal Balance; provided, however,
11-2
<PAGE>
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 Certificate
or Loans. The Trustee assumes no responsibility for the correctness of the
recitals contained herein, in the Certificates or in the Class C Certificate
(other than the Trustee's execution thereof). The Trustee makes no
representations as to the validity or sufficiency of this Agreement, of the
Certificates or of the Class C Certificate (other than its execution thereof) or
of any Loan, Loan File or related document. The Trustee shall not be accountable
for the use or application by the Servicer, the Originator or the Seller of
funds paid to the Originator or the Seller, as applicable in consideration of
conveyance of the Loans to the Trust by the Originator and the Seller or
deposited in or withdrawn from the Certificate Account by the Servicer.
SECTION 11.04. Trustee May Own Certificates. The Trustee in its
individual or other capacity may become the owner or pledgee of Certificates
representing less than all the beneficial interest in the Trust with the same
rights as it would have if it were not Trustee.
SECTION 11.05. Rights of Certificateholders to Direct Trustee and to
Waive Events of Termination. Holders of Certificates representing, in the
aggregate, 25% or more of the Aggregate Certificate Principal Balance shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee; provided, however, that, subject to Section 11.01, the Trustee
shall have the right to decline to follow any such direction if the Trustee
being advised by counsel determines that the action so directed may not lawfully
be taken, or if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; and provided,
further that nothing in this Agreement shall impair the right of the Trustee to
take any action deemed proper by the Trustee and which is not inconsistent with
such direction by the Certificateholders. Holders of the Certificates
representing, in the aggregate, 51% or more of the Aggregate Certificate
Principal Balance may on behalf of all Certificateholders waive any past Event
of Termination hereunder and its consequences, except a default in respect of a
covenant or provision hereof which under Section 12.08 cannot be modified or
amended without the consent of all Certificateholders, and upon any such waiver,
such Event of Termination shall cease to exist and shall be deemed to have been
cured for every purpose of this Agreement; but no such
11-3
<PAGE>
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 National Association, the
parent company of U.S. Bank Trust National Association) shall at all times have
(a) a long-term deposit rating from S&P of at least BBB or as shall be otherwise
acceptable to S&P, (b) have a long-term deposit rating from Moody's of at least
Baa2 or as shall be otherwise acceptable to Moody's and (c) a long-term deposit
rating from Fitch of at least BBB or as shall be otherwise acceptable to Fitch.
In case at any time the Trustee shall cease to be eligible in accordance with
the
11-4
<PAGE>
provisions of this 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.
11-5
<PAGE>
No successor Trustee shall accept appointment as provided in this
Section 11.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 11.07.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 11.09, the Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to the Rating Agencies and to each
Certificateholder and the Class C Certificateholder at their addresses as shown
in the Certificate Register. If the Servicer fails to mail such notice within
ten days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 11.10. Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such Person shall be eligible under the provisions
of Section 11.07, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Trustee shall promptly notify the Rating Agencies in the
event it is a party to any merger, conversion or consolidation.
SECTION 11.11. Tax Returns. Upon the Servicer's request, the Trustee
will furnish the Servicer with all such information as the Servicer may
reasonably require in connection with preparing all tax returns of the Trust and
the Trustee shall execute such returns.
SECTION 11.12. Obligor Claims. In connection with any offset defenses,
or affirmative claims for recovery, asserted in legal actions brought by
Obligors under one or more Loans based upon provisions therein complying with,
or upon other rights or remedies arising from, any legal requirements applicable
to the Loans, including, without limitation, the Federal Trade Commission's
Trade Regulation Rule Concerning Preservation of Consumers' Claims and Defenses
(16 C.F.R. ss. 433) as amended from time to time:
a. The Trustee is not, and shall not be deemed to be, either
in any individual capacity, as trustee hereunder or otherwise, a
creditor, or a joint venturer with or an Affiliate of, or acting in
concert or cooperation with, any home equity lender, in the
arrangement, origination or making of Loans. The Trustee is the holder
of the Loans only as trustee on behalf of the Certificateholders and
the Class C Certificateholder, and not as a principal or in any
individual or personal capacity;
b. The Trustee shall not be personally liable for or obligated
to pay Obligors any affirmative claims asserted thereby, or responsible
to Certificateholders or the Class C Certificateholder for any offset
defense amounts applied against Loan payments, pursuant to such legal
actions;
11-6
<PAGE>
c. The Trustee will pay, solely from available Trust monies,
affirmative claims for recovery by Obligors only pursuant to final
judicial orders or judgments, or judicially approved settlement
agreements, resulting from such legal actions;
d. The Trustee will comply with judicial orders and judgments
which require its actions or cooperation in connection with Obligors'
legal actions to recover affirmative claims against Certificateholders
and the Class C Certificateholder;
e. The Trustee will cooperate with and assist
Certificateholders and the Class C Certificateholder in their defense
of legal actions by Obligors to recover affirmative claims if such
cooperation and assistance is not contrary to the interests of the
Trustee as a party to such legal actions and if the Trustee is
satisfactorily indemnified for all liability, costs and expenses
arising therefrom; and
f. The Originator hereby agrees to indemnify, hold harmless
and defend the Trustee, Certificateholders and the Class C
Certificateholder from and against any and all liability, loss, costs
and expenses of the Trustee, Certificateholders and the Class C
Certificateholder resulting from any affirmative claims for recovery
asserted or collected by Obligors under the Loans. Notwithstanding any
other provision of this Agreement, the obligation of the Originator
under this Section 11.12(f) shall not terminate upon a Service Transfer
pursuant to Article VII.
SECTION 11.13. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction having authority over the
Trust, the Loans or the Obligors, the Originator and the Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the Trustee to act as co-trustee or co-trustees,
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section 11.13, such powers, duties, obligations, rights and
trusts as the Originator and the Trustee may consider necessary or desirable. If
the Originator shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case an Event of Termination
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.07 hereunder and no notice to Certificateholders or the Class C
Certificateholder of the appointment of co-trustee(s) or separate trustee(s)
shall be required under Section 11.09.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 11.13 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such co-trustee or separate trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust
11-7
<PAGE>
or any portion thereof in any such jurisdiction) shall be exercised and
performed by such co-trustee or separate trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then co-trustees and separate trustees,
as effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.14. Trustee and U.S. Bancorp. In the event the Trustee
ceases to be a direct, wholly owned subsidiary of U.S. Bancorp, the Trustee
shall promptly notify the Rating Agencies.
SECTION 11.15. Trustee Advances.
a. If the Servicer fails to deposit into the Certificate Account
Advances as required by Section 8.02, then the Trustee shall, subject to the
provisions of paragraph (b) below, from its own funds, deposit into the
Certificate Account the amount not so deposited by the Servicer on or before the
Business Day preceding the related Payment Date (a "Trustee Advance").
b. The Trustee shall not be required to make any Trustee Advance if and
to the extent that it determines in good faith that the funds, if advanced,
would not be recoverable by it from subsequent amounts available in the
Certificate Account in accordance with Section 8.04(b).
c. The Trustee shall be entitled to reimbursement of a Trustee Advance
from funds subsequently available therefor in the Certificate Account in
accordance with Section 8.04(b).
11-8
<PAGE>
ARTICLE XII
MISCELLANEOUS
-------------
SECTION 12.01. Servicer Not to Resign; Delegation of Servicing Duties.
The Servicer shall not resign from the obligations and duties hereby imposed on
it except upon determination that the performance of its duties hereunder is no
longer permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel for the
Servicer to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with Section
7.03.
Notwithstanding the foregoing, Conseco Finance Corp., if it is the
Servicer, may delegate some or all of its servicing duties to a wholly owned
subsidiary of the Originator, for so long as said subsidiary remains, directly
or indirectly, a wholly owned subsidiary of Conseco Finance Corp.
Notwithstanding any such delegation, Conseco Finance Corp. shall retain all of
the rights and obligations of the Servicer hereunder.
SECTION 12.02. Conseco Finance Corp. and Seller Not to Engage in
Certain Transactions with Respect to the Trust. Neither Conseco Finance Corp.
nor the Seller shall:
a. Provide credit to any Certificateholder for the purpose of enabling
such Certificateholder to purchase Certificates;
b. Purchase any Certificates in an agency or trustee capacity; or
c. Loan any money to the Trust (other than Advances pursuant to Section
8.02).
SECTION 12.03. Maintenance of Office or Agency. The Trustee will
maintain in Minneapolis or St. Paul, Minnesota, an office or agency where
Certificates or the Class C Certificate may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates, the Class C Certificate and this Agreement may be
served. On the date hereof the Trustee's office for such purposes is located at
180 East 5th Street, Second Floor, St. Paul, Minnesota 55101. The Trustee will
give prompt written notice to the Originator, the Seller, the Servicer, the
Certificateholders and the Class C Certificateholder of any change in the
location of the Certificate Register or any such office or agency.
SECTION 12.04. Termination.
a. The Trust created hereby and the respective obligations and
responsibilities of the Originator, the Seller, the Servicer and the Trustee
created hereby (other than the responsibility of the Trustee to make any final
distributions to Certificateholders and the Class C Certificateholder as set
forth below) shall terminate on the earlier of (a) the Payment Date on which the
principal balance of all of the Loans is reduced to zero; or (b) the Payment
Date occurring in the month following the sale of the Loans pursuant to Section
8.06; provided, that in no event shall the trust
12-1
<PAGE>
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof, and
provided, further, that the Servicer's and the Originator's representations and
warranties and indemnities by the Originator and the Servicer shall survive
termination. Any termination of the Trust must be conducted so as to qualify as
a "qualified liquidation" of the REMIC within the meaning of the REMIC
Provisions.
b. Notice of any termination, specifying the Final Payment Date (which
shall be a date that would otherwise be a Payment Date) upon which all
Certificateholders or the Class C Certificateholder may surrender their
Certificates or the Class C Certificate to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Trustee (upon
direction by the Servicer ten days prior to the date such notice is to be
mailed) by letter to each of the Rating Agencies, the Certificateholders and the
Class C Certificateholder mailed no later than the fifth Business Day of the
month of the Final Payment Date specifying (1) the Final Payment Date upon which
final payment on the Certificates and the Class C Certificate will be made upon
presentation and surrender of Certificates and the Class C Certificate at the
office or agency of the Trustee therein designated; (2) the amount of any such
final payment; and (3) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates and the Class C Certificate at the office or agency of the
Trustee therein specified. Any notice of sale of the Loans pursuant to Section
8.06 shall constitute the adoption by the Trustee on behalf of the
Certificateholders and the Class C Certificateholder of a plan of complete
liquidation within the meaning of Section 860F of the Code on the date such
notice is given when signed by the Trustee. Each such notice shall, to the
extent required by the REMIC Provisions or other applicable law, be signed on
behalf of the Trust by the Trustee. The Trustee shall give such notice to the
Certificate Registrar at the time such notice is given to the Certificateholders
and the Class C Certificateholder. In the event such notice is given in
connection with the sale of the Loans pursuant to Section 8.06, the Class C
Certificateholder or the Trustee, as applicable, shall deposit in the
Certificate Account on the Final Payment Date in immediately available funds an
amount equal to the purchase price specified in Section 8.06 and upon such
deposit the Certificateholders and the Class C Certificateholder will be
entitled to the amount of such purchase price but not amounts in excess thereof,
all as provided herein. Upon such final deposit, the Trustee shall promptly
release to the purchaser of the Loans pursuant to Section 8.06 the Loan Files
for the remaining Loans, and the Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
c. Upon presentation and surrender of the Certificates and the Class C
Certificate, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of priority, to the Certificateholders and the
Class C Certificateholder on the Final Payment Date in proportion to their
respective Percentage Interests: (1) to the extent the Amount Available is
sufficient therefor, and in the order of priority provided for in Section
8.04(b), an amount equal to (i) as to Class A Certificates, the Class A
Principal Balance and, together with any Unpaid Class A Interest Shortfall, any
Class A Available Funds Cap Carryover Amount, and one month's interest at the
Class A Pass- Through Rate on the Class A Principal Balance, (ii) as to the
Class M-1 Certificates, the Class M-1 Principal Balance, together with any
Unpaid Class M-1 Interest Shortfall, any Class M-1 Available Funds Cap Carryover
Amount, any Unpaid Class M-1 Liquidation Loss Interest Shortfall and one
12-2
<PAGE>
month's interest at the Class M-1 Pass-Through Rate on the Class M-1 Principal
Balance, (iii) as to Class M-2 Certificates, the Class M-2 Principal Balance,
together with any Unpaid Class M-2 Interest Shortfall, any Class M-2 Available
Funds Cap Carryover Amount, any Unpaid Class M-2 Liquidation Loss Interest
Shortfall and one month's interest at the Class M-2 Pass-Through Rate on the
Class M-2 Principal Balance, (iv) as to Class B-1 Certificates, the Class B-1
Principal Balance, together with any Unpaid Class B-1 Interest Shortfall, any
Class B-1 Available Funds Cap Carryover Amount, any Unpaid Class B-1 Liquidation
Loss Interest Shortfall and one month's interest at the Class B-1 Pass-Through
Rate on the Class B-1 Principal Balance, (v) as to Class B-2 Certificates, the
Class B-2 Principal Balance, together with any Unpaid Class B-2 Interest
Shortfall, any Class B-2 Available Funds Cap Carryover Amount and one month's
interest at the Class B-2 Pass-Through Rate on the Class B-2 Principal Balance
and (vi) as to the Class P Certificate, the Class P Principal Balance and any
Prepayment Charges, and (2) as to the Class C Certificate, the amount which
remains on deposit in the Certificate Account (other than amounts retained to
meet claims) after application pursuant to clause (1) above. The distribution on
the Final Payment Date pursuant to this Section 12.04 shall be in lieu of the
distribution otherwise required to be made on such Payment Date in respect of
each Class of Certificates and the Class C Certificate.
d. In the event that all of the Certificateholders and the Class C
Certificateholder do not surrender their Certificates and the Class C
Certificate for cancellation within three months after the time specified in the
above-mentioned written notice, the Originator shall give a second written
notice to the remaining Certificateholders and the Class C Certificateholder to
surrender their Certificates and the Class C Certificate for cancellation and
receive the final distribution with respect thereto. If within three months
after the second notice all the Certificates and the Class C Certificate shall
not have been surrendered for cancellation, the Originator shall transfer to
itself all amounts remaining on deposit in the Certificate Account, to hold in
trust for Certificateholders and the Class C Certificateholder who have not
surrendered their Certificates or the Class C Certificate, as the case may be,
for cancellation, together with the final record list of Certificateholders and
the Class C Certificateholder, and the Originator shall take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates and to contact the
Class C Certificateholder concerning its surrender of its Class C Certificate,
and the cost thereof shall be paid out of the funds and other assets which
remain in trust hereunder.
SECTION 12.05. Acts of Certificateholders and Class C
Certificateholder.
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates representing, in the aggregate, 51% or more of the
Aggregate Certificate Principal Balance.
b. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders or the Class C Certificateholder may be embodied in and
evidenced by one or more instruments of substantially
12-3
<PAGE>
similar tenor signed by such Certificateholders or the Class C Certificateholder
in person or by an agent duly appointed in writing; and except as herein
otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where required, to
the Servicer. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 11.01) conclusive in favor of the Trustee, the Servicer
and the Originator if made in the manner provided in this Section.
c. The fact and date of the execution by any Certificateholder or the
Class C Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
d. The ownership of Certificates and the Class C Certificate shall be
proved by the Certificate Register.
e. Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder or the Class C Certificateholder
shall bind every holder of every Certificate or the Class C Certificate, as
applicable, issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done
by the Trustee, the Servicer or the Originator in reliance thereon, whether or
not notation of such action is made upon such Certificates or Class C
Certificate.
f. The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
SECTION 12.06. 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. 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 Certificateholder, to correct manifest error,
to cure any ambiguity, to correct or supplement any provisions herein which may
be inconsistent with any other provisions herein, as the case may be, to make
such changes as are necessary to maintain the status of the Trust as a "real
estate mortgage investment conduit" under the REMIC Provisions of the Code or to
otherwise effectuate the benefits of such
12-4
<PAGE>
status to the Trust, the Certificateholders or the Class C Certificateholder,
including, without limitation, to implement any provision permitted by law that
would enable a REMIC to avoid the imposition of any tax, or to make any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel for
the Servicer, adversely affect in any material respect the interests of any
Certificateholder.
b. This Agreement may also be amended from time to time by the
Servicer, the Originator and the Trustee, with the consent of Holders of
Certificates representing, in the aggregate, 66-2/3% or more of the Aggregate
Certificate Principal Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of such Certificateholders; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, collections of payments on the Loans or distributions which
are required to be made on any Certificate, (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the holders of
all Certificates then outstanding, (c) result in the disqualification of the
Trust as a REMIC under the Code, (d) adversely affect the status of the Trust as
a REMIC or the status of the Certificates as "regular interests" in the REMIC,
or (e) cause any tax (other than any tax imposed on "net income from foreclosure
property" under Section 860G(c)(1) of the Code that would be imposed without
regard to such amendment) to be imposed on the Trust, including, without
limitation, any tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code. This Agreement may not be amended without the
consent of the Class C Certificateholder, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement which would modify in any manner the rights of the Class C
Certificateholder.
c. This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholder if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
d. Concurrently with the solicitation of any consent pursuant to this
Section 12.08, the Trustee shall furnish written notification to S&P, Moody's
and Fitch. Promptly after the execution of any amendment or consent pursuant to
this Section 12.08, the Trustee shall furnish written notification of the
substance of such amendment to S&P, Moody's, Fitch, each Certificateholder and
the Class C Certificateholder.
e. It shall not be necessary for the consent of Certificateholders and
the Class C Certificateholder under this Section 12.08 to approve the particular
form of any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders and
the Class C Certificateholder shall be subject to such reasonable requirements
as the Trustee may prescribe.
f. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
12-5
<PAGE>
g. In connection with any amendment pursuant to this Section, the
Trustee shall be entitled to receive an Opinion of Counsel to the Servicer to
the effect that such amendment is authorized or permitted by this Agreement.
h. Upon the execution of any amendment or consent pursuant to this
Section 12.08, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Certificateholder or the Class C Certificateholder hereunder shall be
bound thereby.
i. In the absence of the consent described in subsection (d) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an unqualified Opinion of Counsel, the expense of which
shall not be an expense of the Trust, stating that any such amendment (i) will
not adversely affect the status of the REMIC as a REMIC or the status of the
Certificates as "regular interests" therein, and (ii) will not cause any tax
(other than any tax imposed on "net income from foreclosure property" under
Section 860G(c)(1) of the Code that would be imposed without regard to such
amendment) to be imposed on the Trust, including, without limitation, any tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code.
SECTION 12.09. Notices. All communications and notices pursuant hereto
to the Seller, the Servicer, the Originator, the Trustee, S&P, Moody's and Fitch
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
12-6
<PAGE>
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
If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
And for the Monthly Report, to Moody's at
"[email protected]"
If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder
or the Class C Certificateholder shall be in writing and delivered or mailed at
the address shown in the Certificate Register.
SECTION 12.10. 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.
12-7
<PAGE>
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 Pooling and
Servicing Agreement to be executed by their respective officers thereunto duly
authorized this ____ day of June, 2000.
CONSECO FINANCE CORP.
By:
-----------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By:
-----------------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By:
-----------------------------------------
Laurie A. Howard
Vice President
12-9
<PAGE>
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this ____ day of
June, 2000, by Phyllis A. Knight, a Senior Vice President and Treasurer of
Conseco Finance Corp., a Delaware corporation, on behalf of the corporation.
-----------------------------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this ____ day of
June, 2000, by Phyllis A. Knight, a Senior Vice President and Treasurer of
Conseco Finance Securitizations Corp., a Minnesota corporation, on behalf of the
corporation.
-----------------------------------------
Notary Public
[SEAL]
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me this ____ day of
June, 2000, by Laurie A. Howard, Vice President, of U.S. Bank Trust National
Association, a national banking association, on behalf of the national banking
association.
-----------------------------------------
Notary Public
12-10
<PAGE>
EXHIBIT A
FORM OF CLASS A CERTIFICATE
---------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
Class A No.
(Senior)
Cut-off Date: Pass-Through Rate: Variable
as defined in the Pooling and Servicing rate equal to Class A
Agreement dated June 1, 2000 Pass-Through Rate
Denomination: $_________
First Payment Date: Aggregate Denomination of
July 17, 2000 all Class A Certificates: $______
Servicer: Final Scheduled Payment Date:
Conseco Finance Corp. October 15, 2031 (or if such day is
not a Business Day, then the next
succeeding Business Day)
CUSIP: ___________
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2000-C, CLASS A (SENIOR)
-------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that ___________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in the Certificates for Home Equity Loans, Series 2000-C, Class A
issued by Conseco Finance Home Equity Loan Trust 2000-C (the "Trust"), which
includes among its assets a pool of closed-end home equity loans (the "Loans")
(including, without limitation, all mortgages, deeds of trust and security deeds
relating to such Loans and any and all rights to receive payments due on the
Loans after the applicable Cut-off Date or Subsequent Cut-off Date). The Trust
has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of June 1, 2000, among Conseco Finance Corp., as
A-1
<PAGE>
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller") and U.S. Bank Trust National Association, as
Trustee of the Trust (the "Trustee"). This Certificate is one of the
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in July
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class A Certificates with an aggregate Percentage
Interest of at least 5% of the Class A 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 Distribution Amount and any Additional
Principal Distribution Amount for such Payment Date. Distributions of interest
and principal on the Class A Certificates will be made primarily from amounts
available in respect of the Loans. The final scheduled Payment Date of this
Certificate is October 15, 2031 or the next succeeding Business Day if such
October 15 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Certificates evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such
A-2
<PAGE>
other name as requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
A-3
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated:___________________ CONSECO FINANCE HOME EQUITY
LOAN TRUST 2000-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------------------
Authorized Officer
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________ the within Certificate for Home Equity Loans, Series
2000-C, and does hereby irrevocably constitute and appoint _________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated:___________________ By:
------------------------------------
Signature
A-4
<PAGE>
EXHIBIT B
FORM OF CLASS M-[1][2] CERTIFICATE
----------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] No.
(Subordinate)
Cut-off Date: Pass-Through Rate: Variable rate
as defined in the Pooling and equal to Class M-[1][2]
Servicing Agreement dated Pass-Through Rate
June 1, 2000
First Payment Date: Denomination: $__________
July 17, 2000
Servicer: Aggregate Denomination of
Conseco Finance Corp. all Class M-[1][2] Certificates:
$___________
Final Scheduled Payment Date:
October 15, 2031 (or if such day is not
a Business Day, then the next succeeding
Business Day)
CUSIP:____________
B-1
<PAGE>
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2000-C, CLASS M-[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 PURCHASE AND HOLDING
OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS NEITHER A
PLAN, NOR ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE
CODE, OR (II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN
WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that_______________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in the Certificates for Home Equity Loans, Series 2000-C, Class
M-[1][2] issued by Conseco Finance Home Equity Loan Trust 2000-C (the "Trust"),
which includes among its assets a pool of closed-end home equity loans (the
"Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date or Subsequent Cut-off Date).
The Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of June 1, 2000, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller") and U.S. Bank Trust National Association, as
Trustee of the Trust (the "Trustee"). This Certificate is one of the
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
B-2
<PAGE>
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 July
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class M-[1][2] Certificates with an aggregate Percentage
Interest of at least 5% of the Class M-[1][2] Certificates and so desires, by
wire transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class M-[1][2] Distribution Amount and any Additional
Principal Distribution Amount for such Payment Date. Distributions of interest
and principal on the Class M-[1][2] Certificates will be made primarily from
amounts available in respect of the Loans. The final scheduled Payment Date of
this Certificate is October 15, 2031 or the next succeeding Business Day if such
October 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.
B-3
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder hereof or his or her attorney duly authorized in writing,
and thereupon one or more new Certificates evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
B-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated:___________________ CONSECO FINANCE HOME EQUITY
LOAN TRUST 2000-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------------------
Authorized Officer
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________ the within Certificate for Home Equity Loans, Series
2000-C, and does hereby irrevocably constitute and appoint __________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated:___________________ By:
------------------------------------
Signature
B-5
<PAGE>
EXHIBIT C
FORM OF CLASS B-[1][2] CERTIFICATE
----------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
THE CLASS M CERTIFICATES [AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
Class B-[1][2] No.
(Subordinate)
Cut-off Date: Pass-Through Rate: Variable
as defined in the Pooling and rate equal to Class B-1
Servicing Agreement dated Pass-Through Rate
June 1, 2000
First Payment Date: Denomination: $_________
July 17, 2000
Servicer: Aggregate Denomination of
Conseco Finance Corp. all Class B-[1][2] Certificates:
$_________________
Final Scheduled Payment Date:
October 15, 2031 (or if such day is not a
Business Day, then the next succeeding
Business Day)
CUSIP:_____________
CERTIFICATES FOR HOME EQUITY LOANS
SERIES 2000-C, CLASS B-[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
C-1
<PAGE>
THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED
TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE ORIGINATOR, THE SELLER
OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN
IN THE AGREEMENT, OR, IF NO SUCH OPINION IS DELIVERED, IS DEEMED TO REPRESENT TO
THE TRUSTEE, THE ORIGINATOR, THE SELLER AND THE SERVICER EITHER (I) THAT THE
PERSON ACQUIRING THE CERTIFICATE IS NEITHER A PLAN, NOR ACTING ON BEHALF OF A
PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR (II) THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF
THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that _____________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in the Certificates for Home Equity Loans, Series 2000-C, Class
B-[1][2], issued by Conseco Finance Home Equity Loan Trust 2000-C (the "Trust"),
which includes among its assets a pool of closed-end home equity loans (the
"Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date or the Subsequent Cut-off
Date). The Trust has been created pursuant to a Pooling and Servicing Agreement
(the "Agreement"), dated as of June 1, 2000, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller") and U.S. Bank Trust National Association as
Trustee of the Trust (the "Trustee"). This Certificate is one of the
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in July
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-[1][2] Certificates with an aggregate Percentage
Interest of at least 5% of the Class B-[1][2] Certificates and so desires, by
wire transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class B-[1][2] Distribution Amount and any Additional
Principal Distribution
C-2
<PAGE>
Amount for such Payment Date. Distributions of interest and principal on the
Class B-[1][2] Certificates will be made primarily from amounts available in
respect of the Loans. The final scheduled Payment Date of this Certificate is
October 15, 2031 or the next succeeding Business Day if such October 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.
The following information is provided solely for purposes of applying
the U.S. federal income tax original issue discount ("OID") rules to this
Certificate. The issue date of this Certificate is _________________. Based on
the OID regulations and assuming that the Loans prepay at __% of the Conditional
Prepayment Rate model, used solely for the purposes of applying the OID rules to
the certificates (the "Prepayment Assumption"), this Certificate has been issued
with no more than __% of OID, the yield to maturity is __% and the amount of OID
attributable to the initial accrual period is no more than ____% computed under
the exact method. No representation is made that the mortgage loans will prepay
at a rate based on the Prepayment Assumption or at any other rate.
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
C-3
<PAGE>
Registrar upon surrender of this Certificate for registration of transfer at the
office or agency maintained by the Trustee in Minneapolis or St. Paul,
Minnesota, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder thereof
or his or her attorney duly authorized in writing, and thereupon one or more new
Certificates evidencing the same aggregate Percentage Interest will be issued to
the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to the Trustee or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
C-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated:___________________ CONSECO FINANCE HOME EQUITY
LOAN TRUST 2000-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------------------
Authorized Officer
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Certificate for Home Equity Loans, Series 2000-C, and does
hereby irrevocably constitute and appoint Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.
Dated:____________________ By:
------------------------------------
Signature
C-5
<PAGE>
EXHIBIT D
FORM OF ASSIGNMENT
------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of June 1, 2000, 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, convey and assign, set over and otherwise convey, without
recourse, to Conseco Finance Home Equity Loan Trust 2000-C, created by the
Agreement, to be held in trust as provided in the Agreement, (i) all right,
title and interest in the home equity loans identified in the List of Loans
attached to the Agreement 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 applicable 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 the Originator may have against the
originating lender with respect to Loans originated by a lender other than the
Originator, (iv) all rights of the Seller under the Transfer Agreement and any
Subsequent Transfer Agreement (as defined in the Transfer Agreement), (v) all
rights under the Errors and Omissions Protection Policy and the Fidelity Bond as
such policy and bond relate to the 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 Capitalized Interest Account, any Pre-Funding Account
and any Available Funds Cap Carryover Reserve Account (including all proceeds of
investments of the funds in Certificate Account) and (ix) all proceeds and
products of the foregoing.
This Assignment is made pursuant to and upon the representations and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others. All undefined capitalized terms used in this Assignment
have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of ________________, 2000.
CONSECO FINANCE SECURITIZATIONS CORP.
[Seal] By:
----------------------------------------
[Name]
[Title]
D-1
<PAGE>
EXHIBIT E-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 June 1, 2000
(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
(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
E-1
<PAGE>
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 _____________________, 2000.
----------------------------------------
[Name]
[Title]
E-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 June
1, 2000 (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 _______________, 2000.
----------------------------------------
[Name]
[Title]
E-2-2
<PAGE>
EXHIBIT F
FORM OF OPINION OF COUNSEL FOR THE ORIGINATOR
---------------------------------------------
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 Certificates and the Class C Certificate.
2. The Pooling and Servicing Agreement has been duly authorized by all
requisite corporate action, duly executed and delivered by the Originator, and
constitutes the valid and binding obligation of the Originator enforceable in
accordance with its terms. The Certificates have been duly authorized by all
requisite corporate action and, when duly and validly executed by the Trustee in
accordance with the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator for the consummation of the transactions contemplated by the Pooling
and Servicing Agreement, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriter pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Loans to the Trustee acting on behalf of
the Trust, nor the assignment of the Originator's lien on the related real
estate which is the subject of a home equity loan, nor the issuance or sale of
the Certificates and the Class C Certificate, nor the execution and delivery of
the Pooling and Servicing Agreement, nor the consummation of any other of the
transactions contemplated in the Pooling and Servicing Agreement, nor the
fulfillment of the terms of the Certificates, the Class C Certificate or the
Pooling and Servicing Agreement by the Originator will conflict with, or result
in a breach, violation or acceleration of, or constitute a default under, any
term or provision of the Certificate of Incorporation or Restated Bylaws of the
Originator or of any indenture or other agreement or instrument known to us to
which the Originator is a party or by which it is bound, or result in a
violation of, or contravene the terms of any statute, order or regulation,
applicable to the Originator, of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it.
6. There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Originator before any court, administrative agency or other tribunal (A)
asserting the invalidity of the Pooling and Servicing
F-1
<PAGE>
Agreement, the Certificates, the Class C Certificate, the hazard or flood
insurance policies applicable to any Loans or the Errors and Omissions
Protection Policy, (B) seeking to prevent the issuance of the Certificates or
the Class C Certificate or the consummation of any of the transactions
contemplated by the Pooling and Servicing Agreement, (C) which is likely
materially and adversely to affect the performance by the Originator of its
obligations under, or the validity or enforceability of the Pooling and
Servicing Agreement, the Certificates or the Class C Certificate, or (D) seeking
adversely to affect the federal income tax attributes of the Certificates or the
Class C Certificate described in the Prospectus and the Prospectus Supplement
under the heading "Certain Federal Income Tax Consequences."
7. The transfer of the Loans to the Trust in accordance with Section
2.01 of the Pooling and Servicing Agreement would not be avoidable as a
preferential transfer under Section 547 of the United States Bankruptcy Code (11
U.S.C. ss. 547), as in effect on the date hereof, in the event that the
Originator became a debtor under the United States Bankruptcy Code.
8. Pursuant to the Pooling and Servicing Agreement the Originator has
transferred to the Trustee acting on behalf of the Trust all of the Originator's
right, title and interest in the Loans, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Loans, and has delivered the Loan Files to the Trustee or its custodian.
No filing or other action, other than the filing of a financing statement on
Form UCC-1 with the Secretary of State of the State of Minnesota identifying the
Loans as collateral and naming the Originator as debtor and the Trust as secured
party, and the filing of continuation statements as required by Section 4.01 of
the Pooling and Servicing Agreement, is necessary to perfect as against third
parties the assignment of the Loans by the Originator to the Trust. We have
separately provided you with our opinion concerning whether such assignment
could be recharacterized as a pledge rather than a sale in the event the
Originator became a debtor under the United States Bankruptcy Code. However, in
the event such assignment were characterized as a pledge securing a loan from
the Certificateholders to the Originator, it is our opinion that the Trustee
would be deemed to have a valid and perfected security interest in the Loans and
the proceeds thereof, which security interest would be prior to any other
security interest that may be perfected under the Uniform Commercial Code as in
effect in the State of Minnesota and over any "lien creditor" (as defined in
Minn. Stat. ss.336.9-301(3)) who becomes such after the Closing Date, except
that a subsequent purchaser of any Loan who gives new value and takes possession
thereof in the ordinary course of his business would have priority over the
Trustee's security interest in such Loan, if such purchaser acts without
knowledge that such Loan was subject to a security interest. We have assumed for
the purposes of this opinion that during the term of the Pooling and Servicing
Agreement the Trustee, or its custodian, shall maintain possession of the Loan
Files for the purpose of perfecting the assignment to the Trustee of the Loans.
We express no opinion with respect to the enforceability of any individual Loan
or the existence of any claims, rights or other matters in favor of any Obligor
or the owner of any financed home improvement.
9. In reliance upon certain representations and warranties set forth in
the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing on behalf of the REMIC of a proper
F-2
<PAGE>
election to be taxed as a REMIC, as of the date hereof the REMIC created
pursuant to the Pooling and Servicing Agreement will qualify as a REMIC.
Further, the Certificates will evidence ownership of the "regular interests" in
the REMIC and the Class C Certificate will evidence ownership of the single
class of "residual interest" in the REMIC. For Minnesota income tax purposes,
and subject to the foregoing assumptions, and the provisions of Minnesota law as
of the date hereof, the Trust (excluding the Capitalized Interest Account and
the Pre-Funding Account) will not be subject to tax and the income of the Trust
will be taxable to the holders of interests therein, all in accordance with the
provisions of the Code concerning REMICs. Moreover, ownership of Certificates
will not be a factor in determining whether such owner is subject to Minnesota
income taxes. Therefore, if the owner of Certificates is not otherwise subject
to Minnesota income or franchise taxes in the State of Minnesota, such owner
will not become subject to such Minnesota taxes solely by virtue of owning
Certificates.
10. The transfer of the Loans and the proceeds thereof by the
Originator to the Trustee on the date hereof pursuant to the Pooling and
Servicing Agreement would not be avoidable as a fraudulent transfer under the
Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Originator become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.
F-3
<PAGE>
EXHIBIT G
FORM OF TRUSTEE'S ACKNOWLEDGMENT
--------------------------------
U.S. Bank Trust National Association, a national banking association
organized under the laws of the United States, acting as trustee (the "Trustee")
of Conseco Finance Home Equity Loan Trust 2000-C (the "Trust") created pursuant
to the Pooling and Servicing Agreement dated as of June 1, 2000 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 the Originator may have against
the originating lender with respect to 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 Loans, (v) all
rights under any title insurance policies, if applicable, on any of the
properties securing the Loans (vi) all documents contained in the Loan Files,
[(vii) amounts in the Certificate Account, the Capitalized Interest Account,
Available Funds Cap Carryover Reserve Account and the Pre-Funding Account
(including all proceeds of investments of funds in the Certificate Account,
(viii) all rights of the Seller under the Transfer Agreement, and (ix) all
proceeds and products of the foregoing; and declares that, directly or through a
Custodian, it will hold all Loan Files that have been delivered in trust, upon
the trusts set forth in the Agreement for the use and benefit of all
Certificateholders and the holders of the Class C Certificate.
[From Trustee or Custodian as applicable.] The [Trustee] acknowledges
that it has conducted a cursory review of the Loan Files and hereby confirms
that except as noted on the document exception listing attached hereto, each
Loan File contained (a) an original promissory note, duly endorsed in blank or
in the name of the Trustee, (b) with respect to each Loan, an original or a copy
of the mortgage or deed of trust or similar evidence of a lien on the related
improved real estate, (c) an original or a copy of an assignment of the
mortgage, deed of trust or similar evidence of a lien by the originating lender
to the Originator, (d) an assignment of the mortgage, deed of trust or similar
evidence of a lien in recordable form to the Trustee or in blank, and (e) any
extension, modification or waiver agreement(s). The [Trustee] has not otherwise
reviewed the Loans and Loan Files for compliance with the terms of the Pooling
and Servicing Agreement.
G-1
<PAGE>
IN WITNESS WHEREOF, __________________as Trustee has caused this
acknowledgment to be executed by its duly authorized officer as of this___, day
of , ______2000.
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.
I, _____________________, hereby certify that I am a [title] of Conseco
Finance Corp., a Delaware corporation (the "Company"), and that as such I am
duly authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of June 1, 2000 between the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2000-C (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Monthly Report for the period from _______to ________attached to
this certificate is complete and accurate in accordance with the requirements of
Sections 6.01 and 6.02 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of__________, 2000.
CONSECO FINANCE CORP.
By:
----------------------------------------
[Name]
[Title]
H-1
<PAGE>
EXHIBIT I
FORM OF CLASS C CERTIFICATE
---------------------------
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS 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 OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS DELIVERED, IS DEEMED TO
REPRESENT TO THE TRUSTEE, THE ORIGINATOR AND THE SERVICER EITHER (I) THAT THE
PERSON ACQUIRING THE CERTIFICATE IS NEITHER A PLAN, NOR ACTING ON BEHALF OF A
PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE CODE, OR (II) THAT THE PURCHASE
AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF
THE TRUST BEING DEEMED TO BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED
I-1
<PAGE>
TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE,
THE ORIGINATOR OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN ADDITION TO
THOSE UNDERTAKEN IN THE AGREEMENT.
Class C No.
(Subordinate)
Cut-off Date: Percentage Interest:
As defined in the Pooling
and Servicing Agreement
dated June 1, 2000
First Payment Date:
July 17, 2000
CERTIFICATE FOR HOME EQUITY LOANS, SERIES 2000-C
Original Aggregate Certificate Principal Balance of the Trust: $_________
This certifies that Green Tree Finance Corp.-Two is the registered
owner of the residual interest represented by this Certificate, and entitled to
certain distributions out of Conseco Finance Home Equity Loan Trust 2000-C (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date or the Subsequent Cut-off
Date). The Trust has been created pursuant to a Pooling and Servicing Agreement
(the "Agreement"), dated as of June 1, 2000, among Conseco Finance Corp., as
Servicer (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller") and U.S. Bank Trust National Association, as Trustee of the Trust
(the "Trustee"). This Class C Certificate is described in the Agreement and is
issued pursuant and subject to the Agreement. By acceptance of this Class C
Certificate the holder assents to and becomes bound by the Agreement. To the
extent not defined herein, all capitalized terms have the meanings assigned to
such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in July
2000, so long as the Agreement has not been terminated, by check to the
registered Class C Certificateholder at the address appearing on the Certificate
Register as of the Business Day immediately preceding such Payment Date, in an
amount equal to the difference between (A) the Amount Available, and (B) the sum
of (i) the Class A Distribution Amount, (ii) the Class M-1 Distribution Amount,
(iii) the Class M-2 Distribution Amount, (iv) the Class B-1 Distribution Amount,
(v) the Class B-2 Distribution Amount, (vi) the Monthly Servicing Fee with
respect to the Loans, (vii) any Additional Principal Distribution Amount, (viii)
amounts to reimburse the Class C Certificateholder for reimbursable expenses
incurred by them, (ix) amounts to reimburse the Servicer or the Trustee, as
applicable, for prior Advances with respect to the Loans and (x) any
I-2
<PAGE>
Class P Distribution Amount. The final scheduled Payment Date of this Class C
Certificate is October 15, 2031 or the next succeeding Business Day if such
October 15 is not a Business Day.
The Class C Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Class C Certificateholder as provided
in the Agreement for payment hereunder and that the Trustee in its individual
capacity is not personally liable to the Class C Certificateholder for any
amounts payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement. By
acceptance of this Certificate, the Class C Certificateholder agrees to
disclosure of his, her or its name and address to other Certificateholders under
the conditions specified in the Agreement.
No transfer of this Certificate or any interest herein to any employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or that is described in Section 4975(e)(1) of the
Code or to any person or entity purchasing on behalf of, or with assets of, such
an employee benefit plan (each, a "Plan") will be registered unless the
transferee, at its expense, delivers to the Originator and the Trustee an
opinion of counsel (satisfactory to the Originator and the Trustee) that the
purchase and holding of this Certificate by such Plan will not result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject the
Trustee, the Originator or the Servicer to any obligation or liability in
addition to those undertaken in the Agreement. Unless such opinion is delivered,
each person acquiring this Certificate will be deemed to represent to the
Trustee, the Originator and the Servicer either (i) that such person is neither
a Plan, nor acting on behalf of a Plan, subject to ERISA or to Section 4975 of
the Code, or (ii) that the purchase and holding of this Certificate by such Plan
will not result in the assets of the Trust being deemed to be Plan assets and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee, the Originator or the Servicer to any obligation or
liability in addition to those undertaken in the Agreement.
This Class C Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Class C Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class C
Certificate for registration of transfer at the office or agency maintained by
the Trustee in Minneapolis or St. Paul, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class C Certificate evidencing the
same Class C Certificate will be issued to the designated transferee or
transferees.
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
I-3
<PAGE>
the Certificate Registrar may treat the person in whose name this Class C
Certificate is registered as the owner hereof for all purposes, and neither the
Originator, the Seller, the Servicer, the Trustee, the Paying Agent, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The holder of this Class C Certificate, by acceptance hereof, agrees
that, in accordance with the requirements of Section 860D(b)(1) of the Code, the
federal tax return of the Trust for its first taxable year shall provide that
the Trust elects to be treated as a "real estate mortgage investment conduit" (a
"REMIC") under the Code for such taxable year and all subsequent taxable years.
The Certificates shall be "regular interests" in the REMIC and the Class C
Certificate shall be the "residual interest" in the REMIC. In addition, the
holder of this Class C Certificate, by acceptance hereof, (i) agrees to file tax
returns consistent with and in accordance with any elections, decisions or other
reports made or filed with regard to federal, state or local taxes on behalf of
the Trust, and (ii) agrees to cooperate with the Originator in connection with
examinations of the Trust's affairs by tax authorities, including administrative
and judicial proceedings, and (iii) makes the additional agreements,
designations and appointments, and undertakes the responsibilities, set forth in
Section 6.06 of the Agreement.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated:_________________ CONSECO FINANCE HOME EQUITY
LOAN TRUST 2000-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------------------
Authorized Officer
I-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Certificate for Home Equity Loans, Series 2000-C, and does
hereby irrevocably constitute and appoint Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.
Dated:__________________ By:
------------------------------------
Signature
I-5
<PAGE>
EXHIBIT J-1
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
-----------------------------------------------
Conseco Finance Corp.
I, ______________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06 and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of June 1, 2000 among the Company, Conseco
Finance Securitizations Corp. and U.S. Bank Trust National Association, as
Trustee of Conseco Finance Home Equity Loan Trust 2000-C (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Loans on the attached schedule are to be repurchased by the
Company on the date hereof pursuant to Section 3.06 of the Agreement.
2. Upon deposit of the Repurchase Price for such Loans, such Loans may,
pursuant to Section 8.05 of the Agreement, be assigned by the Trustee to the
Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of ______________, 2000.
CONSECO FINANCE CORP.
By:
------------------------------------
[Name]
[Title]
J-1
<PAGE>
EXHIBIT J-2
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
-----------------------------------------------
Conseco Finance Corp.
I, ______________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06(b) and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of June 1, 2000 among the Company, Conseco
Finance Securitizations Corp. and U.S. Bank Trust National Association, as
Trustee of Conseco Finance Home Equity Loan Trust 2000-C (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 3.06(b) of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 3.05(b)(iii) of the Agreement, have
been filed with the appropriate offices.
4. The Company has delivered to the Trustee an executed assignment to
the Trustee on behalf of the Trust in recordable form for each mortgage securing
such Eligible Substitute Loans.
5. The requirements of Section 3.06(b) of the Agreement have been met
with respect to each such Eligible Substitute Loan.
[6. There has been deposited in the Certificate Account the amounts
listed on the schedule attached hereto as the amount by which the Scheduled
Principal Balance of each Replaced Loan exceeds the Scheduled Principal Balance
of each Loan being substituted therefor.]
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of _______________ , 2000.
CONSECO FINANCE CORP.
By:
------------------------------------
[Name]
[Title]
J-2-1
<PAGE>
EXHIBIT J-3
FORM OF CERTIFICATE REGARDING SUBSTITUTION FOR PREPAID LOANS
------------------------------------------------------------
Conseco Finance Corp.
I, ______________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Section 2.06 of the Pooling and Servicing Agreement (the
"Agreement") dated as of June 1, 2000 among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee of
Conseco Finance Home Equity Loan Trust 2000-C (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the date
hereof pursuant to Section 2.06 of the Agreement and each such Loan is an
Eligible Substitute Loan [description, as to each Loan, as to how it satisfies
the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 2.06(iii) of the Agreement, have
been filed with the appropriate offices.
4. The Company has delivered to the Trustee an executed assignment to
the Trustee on behalf of the Trust in recordable form for each mortgage securing
such Eligible Substitute Loans.
5. The requirements of Section 2.06 of the Agreement have been met with
respect to each such Eligible Substitute Loan.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of ______________, 2000.
CONSECO FINANCE CORP.
By:
------------------------------------
[Name]
[Title]
J-3-1
<PAGE>
EXHIBIT K
FORM OF REPRESENTATION LETTER
-----------------------------
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Conseco Finance Corp.
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Certificates for Home Equity Loans, Series 2000-C, 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 June ____, 2000, to the Prospectus dated June
___, 2000 (the "Prospectus") with respect to the Certificates, and has been
given such information concerning the Certificates, the underlying home equity
loans and Conseco Finance Corp. as it has requested.
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. The Purchaser either (check one box):
[_] is not, and is not acting on behalf of or with assets
of, an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as
amended or that is described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or
[_] has provided the Trustee and Servicer with the
opinion of counsel described in Section 9.02(b)(2) of
the Pooling and Servicing Agreement, or
[_] acknowledges that it is deemed to make the
representation set forth in Section 9.02(b)(2) of the
Pooling and Servicing Agreement.
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
7. The Purchaser, as holder of the Class C Certificate, acknowledges
(i) it may incur tax liabilities in excess of any cash flows generated by the
interest and (ii) it intends to pay the taxes associated with holding the Class
C Certificate as they become due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8. The
representations and warranties contained herein shall be binding upon the heirs,
executors, administrators and other successors of the undersigned. If there is
more than one signatory hereto, the obligations, representations, warranties and
agreements of the undersigned are made jointly and severally.
K-2
<PAGE>
Executed at ________________, _________________ , this ___day of
___________.
Purchaser's Name (Print)
By:
----------------------------------
Signature
Its:
Address of Purchaser
----------------------------------
----------------------------------
----------------------------------
Purchaser's Taxpayer
Identification Number
----------------------------------
K-3
<PAGE>
EXHIBIT L
LIST OF INITIAL AND ADDITIONAL LOANS
------------------------------------
Attached are the first and last pages of the Initial Loans
and Additional Loans.
Complete lists of loans are in the possession of the Trustee.
L-1
<PAGE>
EXHIBIT M
FORM OF MONTHLY REPORT
----------------------
CERTIFICATES FOR HOME EQUITY LOANS, SERIES 2000-C
Payment Date:_________________
1. Amount Available (including Monthly
Servicing Fee and including
Prepayment Charges ($__________)) _______
2. Formula Principal Distribution Amount: _______
(a) Scheduled principal _______
(b) Principal Prepayments _______
(c) Liquidated Loans _______
(d) Repurchases _______
(e) Previously undistributed (a)-(d) amounts _______
(f) Pre-Funded Amount, if any _______
(only on Post-Funding Payment Date) _______
3. LIBOR _______
4. Available Funds Pass-Through Rate _______
Class A Certificates Interest
-----------------------------
5. Aggregate current interest
(a) Class A Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR plus 0.37%,
or (b) the Available Funds Pass-Through Rate, but in no
case more than 14.0%) _______
(b) Class A Interest _______
6. Amount applied to Unpaid Class A Interest Shortfall _______
7. Remaining Unpaid Class A Interest Shortfall. _______
Class M-1 Certificates
----------------------
8. Amount Available less all preceding _______
distributions and less Prepayment Charges
M-1
<PAGE>
Interest on Class M-1 Adjusted Principal Balance
9. Class M-1 Adjusted Principal Balance _______
10. Current Interest _______
(a) Class M-1 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR plus 0.75%,
or (b) the Available Funds Pass-Through Rate, but in no
case more than 14.0%) _______
(b) Class M-1 Interest _______
11. Amount applied to Unpaid Class M-1 Interest Shortfall _______
12. Remaining Unpaid Class M-1 Interest Shortfall _______
Class M-2 Certificates
----------------------
13. Amount Available less all preceding
distributions and less Prepayment Charges _______
Interest on Class M-2 Adjusted Principal Balance
14. Class M-2 Adjusted Principal Balance _______
15. Current Interest _______
(a) Class M-2 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR plus 1.60%,
or (b) the Available Funds Pass-Through Rate, but in no
case more than 14.0%) _______
(b) Class M-2 Interest _______
16. Amount applied to Unpaid Class M-2 Interest Shortfall _______
17. Remaining Unpaid Class M-2 Interest Shortfall. _______
Class B-1 Certificates
----------------------
18. Amount Available less all preceding
distributions and less Prepayment Charges _______
M-2
<PAGE>
Interest on Class B-1 Adjusted Principal Balance
19. Class B-1 Adjusted Principal Balance _______
Current Interest
(a) Class B-1 Pass-Through Rate (a floating rate
per annum equal to the lesser of (a) LIBOR plus 2.05%,
or (b) the Available Funds Pass-Through Rate, but in no
case more than 14.0%) _______
(b) Class B-1 Interest _______
20. Amount applied to Unpaid Class B-1 Interest Shortfall _______
21. Remaining Unpaid Class B-1 Interest Shortfall _______
Class P Certificates
22. Prepayment Charges _______
(All prepayment premiums, penalties and similar charges
paid in connection with, and as a condition to, prepayment
in part or in full of a Loan)
Principal
23. Trigger Event:
(a) Average Sixty-Day Delinquency Ratio Test
(i) Sixty-Day Delinquency Ratio for current
Payment Date _______
(ii) Average Sixty-Day Delinquency Ratio Test
(arithmetic average of ratios for this month
and two preceding months may not exceed
40% of the Senior Enhancement Percentage) _______
(b) Cumulative Realized Losses Test
(i) Cumulative Realized Losses for
current Payment Date _______
M-3
<PAGE>
(ii) Cumulative Realized Loss Ratio (Losses as a
percentage of Cut-off Date Principal Balances of
Fixed Rate Loans may not exceed 4.20% from July 1,
2003 to June 30, 2004, 5.00% from July 1, 2004 to
June 30, 2005, 5.25% from July 1, 2005 to
June 30, 2007, and 5.75% thereafter) _______
24. Senior Enhancement Percentage:
(a fraction, expressed as a percentage) _______
(a) the numerator of which is the excess of (A) the Pool
Scheduled Principal Balance over (B) the Principal Balance
or Adjusted Principal Balance, if applicable, of the most
senior class of Certificates outstanding _______
(b) the denominator of which is the Pool Scheduled
Principal Balance _______
Class A Certificate
-------------------
25. Amount Available less all preceding distributions _______
26. Class A principal distribution: _______
(a) Class A Formula Principal Distribution Amount _______
27. (a) Class A Principal Balance _______
28. (a) Amount, if any, by which Class A Formula Principal
Distribution Amount exceeds Class A Principal
Distribution Amount _______
Class M-1 Certificates
----------------------
29. Amount Available less all preceding distributions _______
Principal
30. Class M-1 principal distribution _______
31. Class M-1 Principal Balance _______
M-4
<PAGE>
32. Amount, if any, by which Class M-1 Formula Principal
Distribution Amount exceeds Class M-1 Principal
Distribution Amount _______
Class M-2 Certificates
----------------------
33. Amount Available less all preceding _______
distributions
Principal
34. Class M-2 principal distribution _______
35. Class M-2 Principal Balance _______
36. Amount, if any, by which the Class M-2 Formula Principal
Distribution Amount exceeds the Class M-2
Principal Distribution Amount _______
Class B-1 Certificates
----------------------
37. Amount Available less all preceding
distributions _______
Principal
38. Class B-1 principal distribution _______
39. Class B-1 Principal Balance _______
40. Amount, if any, by which Class B-1 Formula Principal
Distribution Amount exceeds Class B-1 Principal
Distribution Amount _______
Class M-1 Certificates
----------------------
41. Amount Available less all preceding distributions. _______
Liquidation Loss Interest
42. Amount applied to Class M-1 Liquidation Loss Interest Amount _______
43. Class M-1 Liquidation Loss Interest Shortfall _______
44. Amount applied to Unpaid Class M-1 Liquidation Loss
M-5
<PAGE>
Interest Shortfall _______
45. Remaining Unpaid Class M-1 Liquidation Loss
Interest Shortfall _______
Class M-2 Certificates
46. Amount Available less all preceding
distributions _______
Liquidation Loss Interest
47. Amount applied to Class M-2 Liquidation Loss Interest Amount _______
48. Class M-2 Liquidation Loss Interest Shortfall _______
49. Amount applied to Unpaid Class M-2 Liquidation Loss
Interest Shortfall _______
50. Remaining Unpaid Class M-2 Liquidation Loss
Interest Shortfall _______
Class B-1 Certificates
----------------------
51. Amount Available less all preceding
distributions _______
Liquidation Loss Interest
52. Amount applied to Class B-1 Liquidation Loss Interest Amount _______
53. Class B-1 Liquidation Loss Interest Shortfall _______
54. Amount applied to Unpaid Class B-1 Liquidation Loss
Interest Shortfall _______
55. Remaining Unpaid Class B-1 Liquidation Loss
Interest Shortfall _______
Class B-2 Certificates
56. Amount Available less all preceding
distributions _______
M-6
<PAGE>
Interest
57. Current interest
(a) Class B-2 Pass-Through Rate (a floating rate per
annum equal to the lesser of (a) LIBOR plus 2.05%
or (b) the Available Funds Pass-Through Rate, but in no
event greater than 14%) _______
(b) Class B-2 Interest _______
58. Amount applied to Unpaid Class
B-2 Interest Shortfall _______
59. Remaining Unpaid Class B-2
Interest Shortfall _______
Principal
60. Class B-2 principal distribution _______
61. Amount, if any, by which Class B-2
Formula Distribution Amount exceeds
Class B-2 Distribution Amount _______
62. Class B-2 Principal Balance _______
63. Amount Available less all preceding
distributions _______
Available Funds Cap Carryover Amount.
64. (a) Class A Available Funds Cap Carryover Amount ________
(b) Amount applied to Class A ________
Available Funds Cap Carryover Amount ________
(c) Class A Available Funds Cap Carryover Amount
remaining unpaid _______
Class M-1 Certificates
----------------------
65. Amount Available less all preceding distributions _______
Available Funds Cap Carryover Amount
66. (a) Class M-1 Available Funds Cap Carryover Amount _______
M-7
<PAGE>
(b) Amount applied to Class M-1 Available Funds
Cap Carryover Amount _______
(c) Class M-1 Available Funds Cap Carryover
Amount remaining unpaid _______
Class M-2 Certificates
----------------------
67. Amount Available less all preceding distributions _______
Available Funds Cap Carryover Amount
68. (a) Class M-2 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class M-2 Available Funds
Cap Carryover Amount _______
(c) Class M-2 Available Funds Cap Carryover
Amount remaining unpaid _______
Class B-1 Certificates
----------------------
69. Amount Available less all preceding distributions _______
Available Funds Cap Carryover Amount
70. (a) Class B-1 Available Funds Cap Carryover Amount _______
(b) Amount applied to Class B-1 Available Funds
Cap Carryover Amount _______
(c) Class B-1 Available Funds Cap Carryover
Amount remaining unpaid _______
71. Servicer
(a) Monthly Servicing Fee (if Originator or affiliate is
Servicer) _______
(b) Reimbursement for unreimbursed Advances _______
Class A, Class M and Class B Certificates
-----------------------------------------
72. Pool Scheduled Principal Balance _______
73. Pool Factor _______
74. Loans Delinquent:
30 - 59 days _______
60 - 89 days _______
90 or more days _______
M-8
<PAGE>
75. Principal Balance of Defaulted Loans _______
76. Principal Balance of Loans with Extensions _______
77. Liquidated Loans
(a) Number of Liquidated Loans _______
(b) Aggregate Unpaid Principal Balance _______
(c) REO _______
(d) Net Liquidation Loss _______
78. Number of Loans Remaining _______
79. Pre-Funded Amount _______
80. Reimbursement of Class C Certificateholder expenses _______
Class P Certificates
--------------------
81. Class P Principal Distribution _______
82. Class P Principal Balance _______
Class C Certificate
-------------------
83. Class C Distribution Amount _______
84. Servicer Termination Trigger Event
(a) Cumulative Realized Loss Ratio
(Trigger event exists if ratio exceeds 10%) ______%
(b) Aggregate Unpaid Principal Balance of Loans delinquent
more than 60 days as percentage of Cut-off Date Pool
Principal Balance (trigger event exists if exceeds 18%) ______%
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-9
<PAGE>
EXHIBIT N
FORM OF ADDITION NOTICE
-----------------------
____________, 2000
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
June 1, 2000, among Conseco Finance Corp. (the "Originator"),
Conseco Finance Securitizations Corp. (the "Seller") and U.S.
Bank Trust National Association as Trustee (the "Trustee")
relating to Certificates for Home Equity Loans, Series 2000-C
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the
meanings given them in the Agreement. The Seller hereby notifies the Trustee of
an assignment to the Trust of Subsequent Loans on the date and in the amounts
set forth below:
Subsequent Transfer Date: ________________
Cut-off Date Principal Balance of Subsequent Loans to be assigned to
Trust on Subsequent Transfer Date: $__________________.
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 SECURITIZATIONS CORP.
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
---------------------------------
Name:
Title:
N-2
<PAGE>
EXHIBIT O
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
--------------------------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of June 1, 2000, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the "Seller") and U.S.
Bank Trust National Association as Trustee (the "Trustee"), the Seller does
hereby transfer, assign, set over and otherwise convey, without recourse, to
Conseco Finance Home Equity Loan Trust 2000-C, created by the Agreement, to be
held in trust as provided in the Agreement, (i) all right, title and interest in
the home equity loans identified in the List of Loans attached hereto (each a
"Subsequent Loan"), including, without limitation, all related mortgages, deeds
of trust, security deeds and any and all rights to receive payments on or with
respect to the Subsequent Loans (excluding principal due before the Subsequent
Cut-off Date), (ii) all rights under any hazard, flood or other individual
insurance policy on the real estate securing a Subsequent Loan for the benefit
of the creditor of such Loan, (iii) all rights the Originator may have against
the originating lender with respect to the Subsequent Loans originated by a
lender other than the Originator, (iv) all rights under the Errors and Omissions
Protection Policy and the Fidelity Bond as such policy and bond relate to the
Subsequent Loans, (v) all rights under any title insurance policies, if
applicable, on any of the properties securing Subsequent Loans, (vi) all
documents contained in the related Loan Files, (vii) all rights of the Seller
under the Subsequent Transfer Agreement of even date herewith 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 undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of ______________, 2000.
CONSECO FINANCE SECURITIZATIONS CORP.
[Seal] By:
----------------------------------
Name:
Title:
O-1
<PAGE>
EXHIBIT P
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
---------------------------------------------------
CONSECO FINANCE SECURIZATIONS CORP.
I, ____________________, hereby certify that I am a [title] of Conseco
Finance Securitizations Corp., a Delaware corporation (the "Seller"), and that
as such I am duly authorized to execute and deliver this certificate on behalf
of the Seller in connection with the Pooling and Servicing Agreement dated as of
June 1, 2000 (the "Agreement") among the Seller, Conseco Finance Corp. (the
"Originator") 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 with respect to
the Subsequent Loans are true to the best of his knowledge.
3. All conditions precedent to the sale of the Subsequent Loans to the
Trust under Section 2.03 of the Agreement have been satisfied.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of _________________, 2000.
By:
-----------------------------------
Name:
Title:
P-1
<PAGE>
EXHIBIT Q
FORM OF CLASS P CERTIFICATE
---------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
BY ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE OR
ANY INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF, ANY EMPLOYEE
BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF THE
CODE (EACH, A "PLAN") ACKNOWLEDGES THAT EITHER THE CERTIFICATEHOLDER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS NEITHER A
PLAN, NOR ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE
CODE, OR (II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN
WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Q-1
<PAGE>
Class P No. R-1
Cut-off Date: Denomination: $100.00
as defined in the Pooling and
Servicing Agreement dated
June 1, 2000
First Payment Date: Aggregate Denomination
July 15, 2000 of all Class P Certificates: $100.00
Servicer:
Conseco Finance Corp.
CERTIFICATE FOR HOME EQUITY LOANS
SERIES 2000-C, CLASS P
----------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.-Two is the registered
owner of the undivided Percentage Interest represented by the original principal
amount set forth above in the Certificates for Home Equity Loans, Series 2000-C,
Class P, issued by Conseco Finance Home Equity Loan Trust 2000-C (the "Trust"),
which includes among its assets a pool of closed-end home equity loans (the
"Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut- off Date or Subsequent Cut-off Date).
The Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of June 1, 2000, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and U.S. Bank Trust National Association, as
Trustee of the Trust (the "Trustee"). This Certificate is one of the
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing in July
2000, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class P Certificates with an aggregate Percentage
Interest of at least 5% of the Class P Certificates and so desires, by wire
transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class P Distribution Amount for such Payment Date.
Distributions on the Class P Certificates are limited in right of payment to
certain collections respecting the Loans. The final scheduled Payment Date
Q-2
<PAGE>
of this Certificate is October 15, 2031 or the next succeeding Business Day if
such October 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 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
Q-3
<PAGE>
owner hereof for all purposes, and neither the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8,
Section 102(a)(15)(B) of the Uniform Commercial Code and shall be governed by
such Article 8 as in effect in the state of Minnesota from time to time.
Q-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-C has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee.
Dated: ____________, 2000 CONSECO FINANCE HOME EQUITY
LOAN TRUST 2000-C
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
------------------------------------
Authorized Officer
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________ the within Certificate for Home Equity Loans, Series
2000-C, and does hereby irrevocably constitute and appoint ____________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated:____________________ By:
------------------------------------
Signature
Q-5
