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EXHIBIT 4.1
Certificates for Home Equity Loans
Series 2000-D
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-D
Dated as of June 1, 2000
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS......................................................1-1
SECTION 1.01. General..............................................1-1
SECTION 1.02. Specific Terms.......................................1-1
SECTION 1.03. Calculations........................................1-27
ARTICLE II - ESTABLISHMENT OF TRUST; TRANSFER OF LOANS.......................2-1
SECTION 2.01. Closing..............................................2-1
SECTION 2.02. Conditions to the Closing............................2-1
SECTION 2.03. Conveyance of the Subsequent Loans...................2-3
SECTION 2.04. Acceptance by Trustee................................2-5
SECTION 2.05. REMIC Provisions.....................................2-6
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.........................................3-3
SECTION 3.03. Additional Representations and Warranties............3-9
SECTION 3.04. Representations and Warranties Regarding the
Loans in the Aggregate............................3-9
SECTION 3.05. Representations and Warranties Regarding
the Loan Files...................................3-11
SECTION 3.06. Repurchases of Loans for Breach of
Representations and Warranties....................3-12
SECTION 3.07. No Repurchase Under Certain Circumstances...........3-14
ARTICLE IV - PERFECTION OF TRANSFER AND PROTECTION OF
SECURITY INTERESTS........................................4-1
SECTION 4.01. Transfer of Loans....................................4-1
SECTION 4.02. Costs and Expenses...................................4-1
ARTICLE V - SERVICING OF LOANS...............................................5-1
SECTION 5.01. Responsibility for Loan Administration...............5-1
SECTION 5.02. Standard of Care.....................................5-1
SECTION 5.03. Records..............................................5-1
SECTION 5.04. Inspection...........................................5-1
SECTION 5.05. Certificate Account..................................5-2
SECTION 5.06. Enforcement..........................................5-4
SECTION 5.07. Trustee to Cooperate.................................5-5
SECTION 5.08. Costs and Expenses...................................5-6
SECTION 5.09. Maintenance of Insurance.............................5-7
SECTION 5.10. Merger or Consolidation of Servicer..................5-7
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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.....................................6-5
ARTICLE VII - SERVICE TRANSFER...............................................7-1
SECTION 7.01. Servicer Termination Event...........................7-1
SECTION 7.02. Backup Servicer......................................7-4
SECTION 7.03. Third Party Fees.....................................7-5
SECTION 7.04. Notification to Certificateholders and
Class C Certificateholder..........................7-5
SECTION 7.05. Effect of Transfer...................................7-5
SECTION 7.06. Transfer of Certificate Account......................7-5
SECTION 7.07. Limits on Liability..................................7-6
SECTION 7.08. Waiver of Past Defaults..............................7-6
RTICLE 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.......8-6
SECTION 8.06. Class C Certificateholder's Purchase Option
or Auction Sale; Additional Principal
Distribution Amount................................8-6
SECTION 8.07. Capitalized Interest Account.........................8-9
SECTION 8.08. Pre-Funding Account.................................8-10
SECTION 8.09. Undelivered Loan Account............................8-11
SECTION 8.10. Claims Upon Policy..................................8-11
SECTION 8.11. Effect of Payments by the Certificate
Insurer; Subrogation..............................8-13
SECTION 8.12. Notices to the Certificate Insurer..................8-14
SECTION 8.13. Rights of the Certificate Insurer To Exercise
Rights of Certificateholders......................8-14
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................................9-6
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SECTION 9.06. Access to List of Certificateholders' and
Class C Certificateholder's Names and Addresses....9-6
SECTION 9.07. Authenticating Agents................................9-6
ARTICLE X - INDEMNITIES.....................................................10-1
. SECTION 10.01. Real Estate.........................................10-1
SECTION 10.02. Liabilities to Obligors.............................10-1
SECTION 10.03. Tax Indemnification.................................10-1
SECTION 10.04. Servicer's Indemnities..............................10-1
SECTION 10.05. Operation of Indemnities............................10-2
SECTION 10.06. REMIC Tax Matters...................................10-2
ARTICLE XI - THE TRUSTEE....................................................11-1
SECTION 11.01. Duties of Trustee...................................11-1
SECTION 11.02. Certain Matters Affecting the Trustee...............11-2
SECTION 11.03. Trustee Not Liable for Certificates,
Class C 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.[RESERVED............................................12-1
SECTION 12.02. Conseco Finance Corp. and Seller Not to Engage
in Certain Transactions with Respect
to the Trust......................................12-1
SECTION 12.03. Maintenance of Office or Agency.....................12-1
SECTION 12.04. Termination.........................................12-1
SECTION 12.05. Acts of Certificateholders and Class C
Certificateholder.................................12-3
SECTION 12.06. Assignment or Delegation by Company.................12-4
SECTION 12.07. Amendment...........................................12-4
SECTION 12.08. Notices.............................................12-6
SECTION 12.09. Merger and Integration..............................12-8
SECTION 12.10. Headings............................................12-8
SECTION 12.11. Governing Law.......................................12-8
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SECTION 12.12. Grant of Owner Rights to Certificate Insurer........12-8
SECTION 12.13. Third Party Beneficiary.............................12-8
FORM OF OPINION OF COUNSEL...................................................F-1
Exhibit A -- Form of Class A-[1][2][3][4][5] Certificate
Exhibit B -- RESERVED
Exhibit C -- Form of Class B-[1][2] Certificate
Exhibit D -- Form of Assignment
Exhibit E-1 -- Form of Certificate of Officer (Conseco Finance Corp.)
Exhibit E-2 -- Form of Certificate of Officer (Conseco Finance
Securitizations Corp.)
Exhibit F -- Form of Opinion of Counsel for the Originator
Exhibit G -- Form of Trustee's Acknowledgment
Exhibit H -- Form of Certificate of Servicing Officer
Exhibit I -- Form of Class C Certificate
Exhibit J-1 -- Form of Certificate Regarding Repurchased Loans
Exhibit J-2 -- Form of Certificate Regarding Repurchased Loans
Exhibit J-3 -- Form of Certificate Regarding Substitution for Prepaid Loans
Exhibit K -- Form of Representation Letter
Exhibit L -- List of Initial and Additional Loans
Exhibit M -- Form of Monthly Report
Exhibit N -- Form of Addition Notice
Exhibit O -- Form of Subsequent Transfer Instrument
Exhibit P -- Form of Officer's Certificate (Subsequent Transfer)
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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") and as Servicer (the
"Servicer") and U.S. Bank Trust National Association, a national banking
association organized and existing under the laws of the United States, not in
its individual capacity but solely as Trustee (the "Trustee") of Conseco Finance
Home Equity Loan Trust 2000-D (the "Trust").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
purchases, originates and services home equity loans, which loans provide for
installment payments by or on behalf of the borrowers and grant mortgages, deeds
of trust or security deeds on certain real estate securing such loans;
WHEREAS, the Seller, in the ordinary course of its business, acquires pools
of home equity loans and other receivables from Conseco Finance Corp. and
arranges the securitization of those receivables;
WHEREAS, the Seller intends to sell the Certificates (as defined herein),
to be issued hereunder in seven classes (each, a "Class"), which, together with
the Class C Certificate (as defined herein), in the aggregate will evidence the
entire beneficial ownership interest in the Trust Fund (as defined herein),
consisting primarily of the Loans (as defined herein);
WHEREAS, Financial Security Assurance Inc. (the "Certificate Insurer") is
intended to be a third party beneficiary of this Agreement and is hereby
recognized by the parties hereto to be a third-party beneficiary of this
Agreement; and
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 and the Servicer will service the Loans;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as provided herein:
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ARTICLE I
DEFINITIONS
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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, and
any Class of Certificates, any amount paid in respect of principal on the
Certificates under clauses (11), (13) and (15) 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.
"Advance" means, with respect to any Payment Date, the amounts, if any,
deposited by the Servicer or the Trustee, as applicable, in the Certificate
Account for such Payment Date pursuant to Section 8.02.
"Advance Payment" means any payment by an Obligor in advance of the Due
Period in which it would be due under such Loan and which payment is not a
Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Certificate Principal Balance" means the sum of the Class A-1,
Class A-2, Class A-3, Class A-4, Class A-5, Class B-1, and Class B-2 Principal
Balances.
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"Aggregate Liquidation Loss Principal Amount" means, for any Payment Date,
the excess, if any, of (a) the Aggregate Certificate Principal Balance minus all
distributions of principal on the Certificates on such Payment Date over (b) the
sum of the Pool Scheduled Principal Balance plus the Pre-Funded Amount.
"Agreement" means this Pooling and Servicing Agreement, as it may be
amended from time to time.
"Amount Available" means, for any Payment Date, an amount equal to:
(a) the sum of
(i) the amount on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period,
(ii) any Advances deposited in the Certificate Account with
respect to such Payment Date,
(iii) any Insured Payment deposited in the Certificate Account
for such Payment Date, and
(iv) any amount withdrawn from the Capitalized Interest Account
pursuant to Section 8.07 or the Pre-Funding Account pursuant to
Section 8.08 and deposited in the Certificate Account, minus
(b) the sum of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from the
Certificate Account pursuant to clauses (ii) through (v) of Section
8.04(a), and
(iii) any amounts on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period
representing collections in respect of Principal Prepayments in Full
(other than any amounts referred to in Section 2.06(vi)) on Loans for
which a substitution has been made in accordance with Section 2.06.
"Amount Held for Future Distribution" means, for any Payment Date, the
total of the amounts held in the Certificate Account in respect of the Loans on
the last day of the preceding Due Period on account of Advance Payments in
respect of such Due Period.
"Ancillary Income" means all amounts representing fees, late payment
charges, charges for checks returned for insufficient funds, if any, or
extension or other administrative charges, but excluding Prepayment Charges.
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"Applicants" has the meaning assigned in Section 9.06.
"Authenticating Agent" means any authenticating agent appointed pursuant to
Section 9.07.
"Average Ninety-Day Delinquency Ratio Test" means, to be considered
"satisfied" for any Payment Date, that the arithmetic average of the Ninety-Day
Delinquency Ratio for such Payment Date and the two immediately preceding
Payment Dates is less than or equal to 48.5% of the Senior Enhancement
Percentage.
"Backup Servicer" means Fairbanks Capital Corp. or any successor Backup
Servicer appointed by the Certificate Insurer, unless the Certificate Insurer
does not require a Backup Servicer to be appointed.
"Backup Servicer Agreement" means the letter agreement dated June 28, 2000
among Fairbanks Capital Corp., the Originator, and the Certificate Insurer, and
any agreement hereafter entered into among the Originator, the Certificate
Insurer and a successor Backup Servicer.
"Backup Servicer Fees" means the sum of (a) no more than three basis points
per annum of the unpaid principal balance of the Loans, beginning with the
September 2000 Payment Date, (b) in the event Fairbanks Capital Corp. becomes
the Servicer in accordance with the terms of the initial Backup Servicing
Agreement, (i) an amount equal to no more than $15.00 per Loan then included in
the Trust Fund, including Loans in foreclosure and REO, and (ii) upon
termination of the Backup Servicer as Servicer for any reason other than a
Servicer Termination Event as defined in Section 7.01(a)(i) through (v) or a
failure of the Servicer to satisfy the tests set forth in Schedule C to the
Backup Servicer Agreement, an amount equal to no more than $20.00 per Loan then
included in the Trust Fund, including Loans in foreclosure and REO, and (c) in
the event that a Person other than Fairbanks Capital Corp. becomes Bankup
Servicer, such amounts as may be set forth in the related Backup Servicer
Agreement.
"Balloon Loan" means a Loan that provides for the payment of the
unamortized principal balance of such Loan in a single payment at the maturity
of such Loan that is greater than the preceding monthly payments.
"Book-Entry Certificate" means any Certificate registered in the name of
the Depository or its nominee, ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than (a) a Saturday or a Sunday, or (b)
another day on which banking institutions in the city of New York or where the
Corporate Trust Office is located are authorized or obligated by law, executive
order, or governmental decree to be closed.
"Capitalized Interest Account" means a separate trust account created and
maintained pursuant to Section 8.07 in the name of the Trust in an Eligible
Institution.
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"Certificate" means a Certificate for Home Equity Loans, Series 2000-D,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class B-1, or Class B-2,
executed and delivered by the Trustee substantially in the form of Exhibit A or
C, 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 Insurance Policy" means the financial guaranty insurance
policy (number 50947-N) dated June 28, 2000 issued by the Certificate Insurer to
the Trustee for the benefit of the Holders of the Class A Certificates pursuant
to which the Certificate Insurer guarantees the Scheduled Payments.
"Certificate Insurer" means Financial Security Assurance Inc., or any
successor thereto, as issuer of the Certificate Insurance Policy.
"Certificate Insurer Default" means the existence and continuance of any of
the following:
(i) the Certificate Insurer fails to make a payment required under the
Certificate Insurance Policy in accordance with its terms; or
(ii) the Certificate Insurer shall have (i) filed a petition or
commenced any case or proceeding under any provision or chapter of the
United States Bankruptcy Code, the New York State Insurance Law or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation, or reorganization, (ii) made a general
assignment for the benefit of its creditors or (iii) had an order for
relief entered against it under the United States Bankruptcy Code, the New
York State Insurance Law or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization
that is final and nonappealable.
"Certificate Majority" means, as to each Class of Certificates, Holders of
Certificates representing a majority of the Class Principal Balance of such
Class, provided that with respect to the Class A Certificates, Certificate
Majority means the Certificate Insurer if there is at the time of determination
no continuing Certificate Insurer Default.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate or, if Definitive Certificates have been issued,
Certificateholders.
"Certificate Register" means the register maintained pursuant to Section
9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.
"Certificateholder" or "Holder" means the person in whose name a
Certificate or Class C Certificate is registered on the Certificate Register,
except that, solely for the purposes of giving any consent, waiver, request or
demand pursuant to this Agreement, any Certificate or Class C
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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.
"Civil Relief Interest Shortfall" means, with respect to any Due Period,
for any Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended, the amount, if any,
by which interest collectible on such Loan during the most recently ended Due
Period is less than one month's interest on the outstanding principal balance of
such Loan at a rate equal to the related Loan Interest Rate.
"Class A," "Class B," or "Class C" means pertaining to Class A
Certificates, Class B Certificates, and/or the Class C Certificate, as the case
may be.
"Class A Certificate" means the Class A-1, Class A-2, Class A-3, Class A-4
and Class A-5 Certificates, collectively, each of which shall be executed and
delivered by the Trustee, authenticated by the Certificate Registrar,
substantially in the form set forth in Exhibit A and evidencing an interest
designated as a "regular interest" in the 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) one month's interest (or, as to the first Payment
Date, interest from and including the Closing Date to but excluding July 17,
2000) at (i) the Class A-1 Pass-Through Rate on the Class A-1 Principal Balance,
(ii) the Class A-2 Pass-Through Rate on the Class A-2 Principal Balance, (iii)
the Class A-3 Pass-Through Rate on the Class A-3 Principal Balance, (iv) the
Class A-4 Pass-Through Rate on the Class A-4 Principal Balance, and (v) the
Class A-5 Pass-Through Rate on the Class A-5 Principal Balance, in each case to
be calculated immediately prior to such Payment Date, (b) the aggregate of the
Unpaid Class A Interest Shortfalls, if any, with respect to each Class of Class
A Certificates and (c)(i) if there is no Class A Principal Deficiency Amount for
such Payment Date, the Class A Formula Principal Distribution Amount, or (ii) if
there is a Class A Principal Deficiency Amount for such Payment Date, the amount
determined in accordance with Section 8.04(b)(6)(i).
"Class A Formula Interest Distribution Amount" means, as to each Class of
Class A Certificates and any Payment Date, the sum of (1) the amount specified
in clause (a)(i), (ii), (iii), (iv) and (v) as appropriate of the definition of
the term "Class A Formula Distribution Amount" and (2) the Unpaid Class A
Interest Shortfall, if any, with respect to such Class.
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"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 (but in no event more than the Class A
Principal Balance) of (A) the Class A Principal Balance over (B) the lesser
of (x) 83% of the Pool Scheduled Principal Balance or (y) the Pool
Scheduled Principal Balance minus $20,000,000.
"Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Payment Date, the amount, if any, by which the Class A
Formula Interest Distribution Amount for such Class exceeds the amount
distributed to Holders of such Class on such Payment Date pursuant to Section
8.04(b)(3).
"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 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-1 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-1
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-1 Principal Balance" means, for any Payment Date, the Original
Class A-1 Principal Balance less all amounts previously distributed to Holders
of Class A-1 Certificates in respect of principal.
"Class A-2 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-2
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-2 Principal Balance" means, for any Payment Date, the Original
Class A-2 Principal Balance less all amounts previously distributed to Holders
of Class A-2 Certificates in respect of principal.
"Class A-3 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-3
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
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"Class A-3 Principal Balance" means, for any Payment Date, the Original
Class A-3 Principal Balance less all amounts previously distributed to Holders
of Class A-3 Certificates in respect of principal.
"Class A-4 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-4
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-4 Principal Balance" means, for any Payment Date, the Original
Class A-4 Principal Balance less all amounts previously distributed to Holders
of Class A-4 Certificates in respect of principal.
"Class A-5 Distribution Amount" means, for any Payment Date, that portion
of the Class A Distribution Amount to be distributed to the Class A-5
Certificateholders pursuant to Section 8.04(b) on such Payment Date.
"Class A-5 Principal Balance" means, for any Payment Date, the Original
Class A-5 Principal Balance less all amounts previously distributed to Holders
of Class A-5 Certificates in respect of principal.
"Class 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 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) one month's interest (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, (b) the Unpaid Class B-1 Interest Shortfall, if any, (c) the Class B-1
Formula Principal Distribution Amount and (d) the Class B-1 Formula Liquidation
Loss Interest Distribution Amount, if any.
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"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 Class A 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 and the Class
B-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) 84.20% of the Pool Scheduled Principal
Balance or (y) the Pool Scheduled Principal Balance minus $20,000,000.
"Class B-1 Interest Shortfall" means, for any Payment Date, the amount, if
any, by which (a) the Class B-1 Formula Interest Distribution Amount exceeds (b)
the amount distributed to Class B-1 Certificateholders on such Payment Date
pursuant to Section 8.04(b)(4).
"Class B-1 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest 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)(8)(ii).
"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.
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"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-2 Adjusted Principal Balance" means, for any Payment Date, the
Class B-2 Principal Balance minus the Class B-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"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) one month's interest (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 Adjusted Principal
Balance, (b) the Unpaid Class B-2 Interest Shortfall, if any, (c) the Class B-2
Formula Principal Distribution Amount and (d) the Class B-2 Formula Liquidation
Loss Interest Distribution Amount, if any.
"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 Liquidation Loss Interest Distribution Amount" means,
for any Payment Date, the sum of (a) the Class B-2 Liquidation Loss Interest
Amount, if any, and (b) the Unpaid Class B-2 Liquidation Loss Interest
Shortfall, if any, for the immediately preceding Payment Date.
"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 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
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(A) (1) the sum of the Class A Principal Balance, the Class B-1
Adjusted Principal Balance and the Class B-2 Adjusted Principal
Balance, minus (2) the amount actually distributed on such Payment
Date in respect of principal on the Class A and Class B-1
Certificates, over
(B) the lesser of (x) 96.00% of the Pool Scheduled Principal
Balance or (y) the Pool Scheduled Principal Balance minus $20,000,000.
"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 amount distributed to Class B-2 Certificateholders on such Payment Date
pursuant to Section 8.04(b)(5).
"Class B-2 Liquidation Loss Interest Amount" means, for any Payment Date,
an amount equal to one month's interest at the Class B-2 Pass-Through Rate on
the Class B-2 Liquidation Loss Principal Amount (if any) for the immediately
preceding Payment Date.
"Class B-2 Liquidation Loss Interest Shortfall" means, for any Payment
Date, the amount, if any, by which (a) the Class B-2 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)(10)(ii).
"Class B-2 Liquidation Loss Principal Amount" means, for any Payment Date,
the lesser of (A) the Class B-2 Principal Balance (after giving effect to all
distributions of principal on the Class B-2 Certificates on such Payment Date)
and (B) the Aggregate Liquidation Loss Principal Amount for such Payment Date.
"Class B-2 Principal Balance" means, for any Payment Date, the Original
Class B-2 Principal Balance less all amounts previously distributed to Holders
of Class B-2 Certificates in respect of principal.
"Class C Certificate" means a Certificate for Home Equity Loans, Series
2000-D, bearing the designation "Class C," executed and delivered by the Trustee
substantially in the form of Exhibit I, and evidencing an interest designated as
the "residual interest" in the assets of the Trust comprising 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 Principal Balance" means any of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class B-1, or Class B-2 Principal Balances.
"Closing Date" means June 28, 2000.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Combined LTV" means, with respect to any Loan, the percentage obtained by
dividing (i) the sum of (a) the current principal balance of such Loan, plus (b)
the outstanding principal balance, as of the date of origination of such Loan,
of any loan secured by a prior lien on the property which secures the Loan (the
"Collateral"), by (ii) the lesser of (a) the appraised value of the Collateral
based on an appraisal made for the originator of the Loan by an independent fee
appraiser (or by an employee of the Originator who is a licensed appraiser) at
the time of origination of the Loan, and (b) the sales price of the Collateral
at the time of origination of the Loan; provided that, in the case of a Loan the
proceeds of which were used to refinance an existing mortgage loan, the amount
described in clause (ii)(a) shall be the amount to be used for purposes of
clause (ii).
"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 12.08.
"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 acceptable to the Certificate Insurer.
"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 that Payment Date and the denominator of which is the Cut-off Date
Pool Principal Balance.
"Cumulative Realized Losses" means, for any Payment Date, the sum of the
Realized Losses 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 3.65%
July 2004 - June 2005 4.75%
July 2005 - June 2007 5.50%
July 2007 and thereafter 6.00%
"Custodian" means at any time an Eligible Institution, or a financial
institution organized under the laws of the United States or any State, which is
not an Affiliate of the Originator or the
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<PAGE>
Seller, 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 and P-1 by Moody's in the case of commercial paper, or BBB+ or higher by S&P
and Baal or higher by Moody's 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, May 31, 2000 (or
the date of origination, if later); with respect to each Additional Loan, June
30, 2000; and with respect to each Subsequent Loan, the applicable Subsequent
Cut-off Date.
"Cut-off Date Pool Principal Balance" means the aggregate of the Cut-off
Date Principal Balances of all Loans.
"Cut-off Date Principal Balance" means, (i) as to any Initial or Additional
Loan, the unpaid principal balance thereof at the Cut-off Date after giving
effect to all installments of principal due on or prior thereto, and (ii) as to
any Subsequent Loan, the unpaid principal balance thereof at the related
Subsequent Cut-off Date, after giving effect to all installments of principal
due on or prior thereto.
"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
and whether or not such Loan is subject to a cramdown provision in any
bankruptcy proceeding; provided, however, that with respect to any Liquidated
Loan, the payment scheduled to be made in the Due Period in which such Loan
became a Liquidated Loan shall not be deemed a Delinquent Payment.
"Depository" means the initial Depository, The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of (i) one Class
A-1 Certificate evidencing $356,000,000 in Original Class A-1 Principal Balance,
(ii) one Class A-2 Certificate evidencing $74,000,000 in Original Class A-2
Principal Balance, (iii) one Class A-3 Certificate evidencing $226,000,000 in
Original Class A-3 Principal Balance, (iv) one Class A-4 Certificate evidencing
$141,000,000 in Original Class A-4 Principal Balance, (v) one Class A-5
Certificate evidencing $138,000,000 in Original Class A-5 Principal Balance,
(vi) one Class B-1 Certificate evidencing $6,000,000 in Original Class B-1
Principal Balance, and (vii) one Class B-2 Certificate evidencing $59,000,000 in
Original Class B-2 Principal Balance, and any permitted successor
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<PAGE>
depository. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(5) of the Uniform Commercial Code of the State of New
York.
"Depository Participant" means a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the second Business Day preceding each Payment
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
"Due Period" means, for any Payment Date after the first Payment Date, a
calendar month during the term of this Agreement and, for the first Payment
Date, the month of 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 either of the
Rating Agencies to downgrade or withdraw its then-current rating assigned to the
Certificates (without regard to the Certificate Insurance Policy), as evidenced
in writing by each of the Rating Agencies.
"Eligible Institution" means any depository institution (which may be the
Trustee or an Affiliate of the Trustee) organized under the laws of the United
States or any State, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or State authorities and whose
short-term deposits have been rated A-1+ by S&P and P-1 by Moody's (if rated by
Moody's) 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).
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Originator or any Person (i) which is
qualified to act as Servicer of the Loans under applicable federal and state
laws and regulations, and (ii) which services home equity loans with an
outstanding principal balance aggregating not less than $100,000,000.
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<PAGE>
"Eligible Substitute Loan" means, as to (1) any Replaced Loan for which an
Eligible Substitute Loan is being substituted pursuant to Section 3.06(b), and
(2) any Prepaid Loan for which an Eligible Substitute Loan is being substituted
pursuant to Section 2.06, a Loan that (a) as of the date of its substitution,
satisfies all of the representations and warranties (which, except when
expressly stated to be as of origination, shall be deemed to be made as of the
date of its substitution rather than as of the applicable Cut-off Date or the
Closing Date) in Sections 3.02 and 3.03 and does not cause any of the
representations and warranties in Sections 3.03, 3.04 and 3.05, after giving
effect to such substitution, to be incorrect, (b) after giving effect to the
scheduled payment due in the month of such substitution, has a Scheduled
Principal Balance that is not greater than the Scheduled Principal Balance of
such Replaced Loan or, but for such Principal Prepayment in Full, the Scheduled
Principal Balance of such Prepaid Loan, as the case may be, (c) has a Loan
Interest Rate that is at least equal to the Loan Interest Rate of such Replaced
Loan or Prepaid Loan, as the case may be, (d) has a remaining term to scheduled
maturity that is not greater than the remaining term to scheduled maturity of
the Replaced Loan or Prepaid Loan, as the case may be, (e) as of the date of its
origination, was identified by the Originator under its standard underwriting
criteria as the same credit grade as the Replaced Loan or Prepaid Loan, as the
case may be, (f) the mortgage securing such Loan is in a lien position that is
the same or better than the mortgage securing the Replaced Loan or Prepaid Loan,
as the case may be, and (g) the Combined LTV of such Loan is not more than 100
basis points higher than the Combined LTV of the Replaced Loan or Prepaid Loan,
as the case may be.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, as such policy relates to Loans comprising a
portion of the corpus of the Trust.
"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 the Certificates will be made pursuant to Section 12.04.
"Final Scheduled Payment Date," as used in the Certificate Insurance
Policy, means the Maturity Date.
"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
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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 and Prepayment Charges 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 2.06 or
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
2.06(vi) or 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 and on August
15, 2000, any amount withdrawn from the Undelivered Loan Account and
deposited in the Certificate Account.
"GNMA" means the Government National Mortgage Association, or any successor
thereto.
"Guaranteed Distributions" means the Scheduled Payments.
"Indemnification Agreement" means the Indemnification Agreement dated as of
June 28, 2000, among the Certificate Insurer, the Originator, the Seller and the
Underwriters.
"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
$414,285,152.45.
"Insurance Agreement" means the Insurance and Indemnity Agreement dated as
of June 1, 2000, among the Certificate Insurer, the Originator and the Seller,
as such agreement may be amended from time to time.
"Insured Payment" means as to any Payment Date the lesser of (a) the
Shortfall or (b) the amount deposited in the Policy Payments Account pursuant to
Section 8.10.
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<PAGE>
"Late Payment Rate" means the lesser of (a) the greater of (i) the per
annum rate of interest, publicly announced from time to time by The Chase
Manhattan Bank at its principal office in the City of New York, as its prime or
base lending rate (any change in such rate of interest to be effective on the
date such change is announced by The Chase Manhattan Bank) plus 3%, and (ii) the
per annum rate equal to 3% and (b) the maximum rate permissible under applicable
usury or similar laws limiting interest rates. The Late Payment Rate shall be
computed on the basis of the actual number of days elapsed over a year of 360
days.
"Liquidated Loan" means, with respect to any Due Period,
(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; or
(3) a Loan, other than one secured by a first priority lien, as to
which a payment is more than 180 days past due (without regard to any
extension given by the Servicer under Section 5.06(f)).
provided, however, that any Loan which the Originator is obligated to repurchase
pursuant to Section 3.06, and did so repurchase or substitute therefor an
Eligible Substitute Loan in accordance with Section 3.06, shall be deemed not to
be a Liquidated Loan; and provided, further, that with respect to Due Periods
beginning on or after 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,
insurance, 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.
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"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 applicable Cut-off Date.
"Loan File" means, as to each Loan, (a) the original promissory note duly
endorsed in blank or in the name of the Trustee for the benefit of the
Certificateholders, (b) the original or a copy of the mortgage, deed of trust or
security deed or similar evidence of a lien on the related improved property and
evidence of due recording of such mortgage, deed of trust or security deed, if
available, (c) if such Loan was originated by a lender other than the
Originator, the original or a copy of an assignment of the mortgage, deed of
trust or security deed by such lender to the Originator, (d) an assignment of
the mortgage, deed of trust or security deed in recordable form to the Trustee
or in blank, and (e) any extension, modification or waiver agreements.
"Loan Interest Rate" means, as to any Loan, the annual rate of interest
specified in the Loan.
"Maintenance Expenses" means all reasonable and necessary "out of pocket"
costs and expenses incurred by the Servicer in the performance of its servicing
obligations, other than Liquidation Expenses, including, but not limited to, the
cost of (i) the preservation, restoration and protection of the underlying
property securing the Loans, including REO property, including without
limitation, advances in respect of real estate taxes and assessments and
insurance premiums on fire, hazard and flood insurance policies and (ii) the
management of REO property.
"Maturity Date" means for each Class of Certificates the respective Payment
Date in the month and year set forth below:
Maturity Date
-------------
A-1 May 2014
A-2 February 2016
A-3 July 2018
A-4 December 2025
A-5 December 2025
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Payment Date (a) one-twelfth of
the product of 0.50% and the Pool Scheduled Principal Balance plus, (b) on any
Payment Date on which the Originator is not acting as Servicer, any additional
amount agreed to by the Certificate Insurer and the successor Servicer and the
Trustee (but only following termination or during suspension pursuant to Section
12.14 of the Certificate Insurer's rights); provided that only that portion of
the Monthly Servicing Fee that does not exceed one-twelfth of the product of
0.50% and the Pool Scheduled Principal Balance for the immediately preceding
Payment Date shall be paid pursuant to Section 8.04(b)(1) and any balance shall
be paid pursuant to Section 8.04(b)(9).
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"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.
"Ninety-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 90 days or more as of the
end of the prior Due Period (including Loans in foreclosure and REO), and the
denominator of which is the Pool Scheduled Principal Balance of the Loans for
such Payment Date.
"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, the
Certificate Insurer and the Seller.
"Original Aggregate Certificate Principal Balance" means $1,000,000,000.
"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).
"Overcollateralization Amount" means, for any Payment Date, the excess of
(A) the sum of the Pool Scheduled Principal Balance plus the Pre-Funded Amount
over (B) the Aggregate
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Certificate Principal Balance, after giving effect to distributions of principal
on such Payment Date under clauses (6), (8)(i) and (10)(i) of Section 8.04(b).
"Overcollateralization Distribution Amount" means, for any Payment Date,
the amount described in Section 8.04(b)(11) or Section 8.04(b)(13), as
applicable.
"Overcollateralization Trigger Event" exists on any Payment Date on which
(a) the arithmetic average of the Ninety-Day Delinquency Ratio for such Payment
Date and the two immediately preceding Payment Dates exceeds 50% of the Senior
Enhancement Percentage or (b) the Cumulative Realized Loss Ratio or Rolling Loss
Ratio for such Payment Date exceeds the respective percentages set forth below
for such Payment Date:
Payment Date Cumulative Realized Losses Ratio
------------------------- --------------------------------
July 2000- June 2001 1.95%
July 2001- June 2002 2.70%
July 2002- June 2003 4.65%
July 2003- June 2004 5.50%
July 2004- June 2007 5.75%
July 2007 and thereafter 6.25%
Payment Date Rolling Loss Ratio
------------------------- ------------------
July 2000- June 2002 1.25%
July 2002- June 2003 1.75%
July 2003- June 2004 2.75%
July 2004- June 2006 3.25%
July 2006- June 2007 2.25%
July 2007 and thereafter 1.25%
"Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Certificate Account pursuant to the proviso in Section 3.06(a) or pursuant to
Section 3.06(b).
"Pass-Through Rate" means, with respect to each Class of Certificates, the
rate set forth for such Class in Section 2.05(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Payment Date" means the fifteenth day of each calendar month during the
term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing in 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
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<PAGE>
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).
"Policy Payments Account" has the meaning assigned in Section 8.10(b).
"Pool Factor" means, at any time, the percentage derived from a fraction,
the numerator of which is the Aggregate Certificate Principal Balance at such
time and the denominator of which is the Original Aggregate Certificate
Principal Balance.
"Pool Scheduled Principal Balance" means, for any Payment Date, the
aggregate Scheduled Principal Balance for such Payment Date of all Loans that
were outstanding during the immediately preceding Due Period.
"Post-Funding Payment Date" means the Payment Date on, or the first Payment
Date after, the last day of the Pre-Funding Period.
"Pre-Funded Amount" means, with respect to any date of determination, the
amount then on deposit in the Pre-Funding Account, after giving effect to any
sale of Subsequent Loans to the Trust on such date.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.08.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000.00, or (b) the close of business on
September 14, 2000, or (c) the date on which a Servicer Termination Event
occurs.
"Premium Amount" means, as to any Payment Date, the amount determined in
accordance with the Premium Letter.
"Premium Letter" means the letter agreement dated June 28, 2000, among the
Originator, the Seller, the Trustee and the Certificate Insurer.
"Prepaid Loan" has the meaning assigned in Section 2.06.
1-20
<PAGE>
"Prepayment Charges" means all prepayment premiums, penalties and similar
charges paid by any Obligor in connection with, and as a condition to,
prepayment in part or in full of a Loan.
"Principal Prepayment" means a payment or other recovery of principal on a
Loan (exclusive of Liquidation Proceeds) which is received in advance of its
scheduled due date and applied upon receipt (or, in the case of a partial
prepayment, upon the next scheduled payment date on such Loan) to reduce the
outstanding principal amount due on such Loan prior to the date or dates on
which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the entire
principal balance of a Loan.
"Rating Agencies" means S&P and Moody's.
"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.
"Reimbursement Amount" means, as of any Payment Date, the sum of (x)(i) all
Insured Payments previously paid to the Trustee by the Certificate Insurer and
not previously repaid to the Certificate Insurer pursuant to Section 8.04(b)(7)
plus (ii) interest accrued on each such Insured Payment not previously repaid
calculated at the Late Payment Rate and (y)(i) any amounts then due and owing to
the Certificate Insurer under the Insurance Agreement (including, without
limitation, any unpaid Premium Amount relating to such Payment Date or an
earlier Payment Date), as certified in writing by the Certificate Insurer to the
Servicer and the Trustee (except that no certification is acquired for amounts
representing the Premium Amount (so long as no Event of Default has occurred
under the Insurance Agreement) and interest accrued thereon, plus (ii) interest
on such amounts at the Late Payment Rate.
"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).
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<PAGE>
"Repurchase Price" means, with respect to a Loan to be repurchased pursuant
to Section 3.06 or which becomes a Liquidated Loan, an amount equal to (a) the
remaining principal amount outstanding on such Loan (without giving effect to
any Advances paid by the Servicer or the Trustee, as applicable, with respect to
such Loan pursuant to Section 8.02), plus (b) interest at the Loan Interest 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.
"Rolling Loss Ratio" means, for any Payment Date, a fraction, expressed as
a percentage, the numerator of which is the sum of the Realized Losses for that
Payment Date and each of the 11 preceding Payment Dates and the denominator of
which is the Pool Scheduled Principal Balance on the first Payment Date in such
12 month period.
"Rolling Loss Test" means, to be considered "satisfied" for any Payment
Date, that the Rolling Loss Ratio for that Payment Date is less than the
percentage set forth below for such Payment Date:
Payment Date Rolling Loss Ratio
------------------------- ------------------
July 2003 - June 2004 2.50%
July 2004 - June 2006 3.00%
July 2006 - June 2007 2.00%
July 2007 and thereafter 1.00%
"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 Payments" means, as to any Payment Date, the sum of (a) the
Class A Formula Interest Distribution Amount less a pro rata portion (based on
the Class A Principal Balance as a percentage of the Aggregate Certificate
Principal Balance) of any Civil Relief Interest Shortfall, (b) any Class A
Principal Deficiency Amount and (c) without duplication, on
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<PAGE>
the Maturity Date for the Class A-1, Class A-2, Class A-3, Class A-4 or Class
A-5 Certificates, the Class A-1 Principal Balance, Class A-2 Principal Balance,
Class A-3 Principal Balance, Class A-4 Principal Balance or Class A-5 Principal
Balance, respectively.
"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 aggregate Principal Balance of the Class A
Certificates, and
(y) the denominator of which is the Pool Scheduled Principal Balance.
"Service Transfer" has the meaning assigned in Section 7.01.
"Servicer" means the Originator until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Servicer Termination Event" has the meaning given in Section 7.01.
"Servicer Termination Trigger Event"exists on any Payment Date on which (a)
the arithmetic average of the Ninety-Day Delinquency Ratio for such Payment Date
and the two immediately preceding Payment Dates exceeds 52% of the Senior
Enhancement Percentage; or (b) the Cumulative Realized Loss Ratio or Rolling
Loss Ratio for such Payment Date exceeds the respective percentages set forth
below for such Payment Date:
Payment Date Cumulative Realized Loss Ratio
------------------------- ------------------------------
July 2000- June 2001 2.25%
July 2001- June 2002 3.00%
July 2002- June 2003 4.25%
July 2003- June 2004 4.75%
July 2004- June 2005 5.25%
July 2005 and thereafter 6.00%
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<PAGE>
Payment Date Rolling Loss Ratio
------------------------- ------------------------------
July 2000- June 2002 1.50%
July 2002- June 2003 2.00%
July 2003- June 2004 3.00%
July 2004- June 2006 3.50%
July 2006- June 2007 2.50%
July 2007 and thereafter 1.50%
"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.
"Shortfall" means, as to any Payment Date, the amount, if any, by which the
Scheduled Payments exceed the portion of the Amount Available (excluding the
amount described in clause (a)(iii) of the definition of Amount Available)
distributable in respect of such Scheduled Payments in accordance with Section
8.04(b).
"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 83.00% 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.
"Target Overcollateralization Amount" means, for any Payment Date (a) on
which an Overcollateralization Trigger Event does not exist, $20,000,000, and
(b) on which an Overcollateralization Trigger Event exists, the greater of (i)
$20,000,000 and (ii) the aggregate principal balance of all Loans delinquent 90
days or more as of the end of the prior Due Period (including Loans in
foreclosure and REO) minus the Class B Principal Balance.
"Term of Service" has the meaning assigned in Section 5.11.
"Transfer Agreement" means the Transfer Agreement between Conseco Finance
Securitizations Corp., as purchaser, and Conseco Finance Corp., as seller, dated
as of June 1, 2000 pertaining to the Loans.
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<PAGE>
"Transaction Documents" means this Agreement, the Underwriting Agreement,
the Insurance Agreement, the Backup Servicing Agreement and the Indemnification
Agreement.
"Trigger Event" exists for any Payment Date if (i) the Average Ninety-Day
Delinquency Ratio Test is not satisfied or (ii) the Cumulative Realized Loss
Test is not satisfied or (iii) the Rolling Loss Test is not satisfied.
"Trust" means Conseco Finance Home Equity Loan Trust 2000-D.
"Trust Fund" means the corpus of the Trust created by this Agreement which
consists of (i) all the rights, benefits and obligations arising from and in
connection with the Loans, including without limitation all related mortgages,
deeds of trust and security deeds and any and all rights to receive payments on
or with respect to the Loans due after the applicable Cut-off Date, (ii) all
rights under any hazard, flood or other individual insurance policy on the real
estate securing a Loan for the benefit of the creditor of such Loan, (iii) all
rights of the Seller under the Transfer Agreement, (iv) all rights the
Originator may have against the originating lender with respect to Loans
originated by a lender other than the Originator, (v) all rights under the
Errors and Omissions Protection Policy and the Fidelity Bond as such policy and
bond relate to the Loans, (vi) all rights under any title insurance policies, if
applicable, on any of the properties securing Loans, (vii) all documents
contained in the Loan Files, (viii) amounts in the Certificate Account, the
Capitalized Interest Account, the Pre-Funding Account, the Policy Payments
Account and the Undelivered Loan Account (including all proceeds of investments
of funds in the Certificate Account), (ix) the Certificate Insurance Policy and
(x) all proceeds and products of the foregoing.
"Trustee Advance" has the meaning assigned in Section 11.15.
"Undelivered Loan" means a Loan identified on the exception report attached
to the Acknowledgment delivered by the Trustee under Section 2.04(a) on the
Closing Date as a Loan as to which the Trustee (a) did not receive the related
contract or promissory note as of the Closing Date and (b) has not received the
related contract or promissory note and remitted payment for it to the Seller
pursuant to Section 8.09.
"Undelivered Loan Account" means the account so designated, established and
maintained pursuant to Section 8.09.
"Underwriters" means Lehman Brothers Inc., Credit Suisse First Boston
Corporation, First Union Securities, Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related Terms
Agreement, each dated June 16, 2000, among the Originator, the Seller and the
Underwriters.
"Unpaid Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Payment Date, the amount, if any, of the Class A Interest
Shortfall applicable to such Class for the prior Payment Date, plus one month's
interest thereon (to the extent payment thereof is legally permissible) at the
Pass-Through Rate for such Class.
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<PAGE>
"Unpaid Class B-1 Interest Shortfall" means, as to any Payment Date, the
amount, if any, of the Class B-1 Interest Shortfall for the prior Payment Date,
plus one month's interest thereon (to the extent payment thereof is legally
permissible) at the Class B-1 Pass-Through Rate.
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Payment Date, the amount, if any, of the Class B-1 Liquidation Loss Interest
Shortfall for the prior Payment Date, plus one month's interest thereon (to the
extent payment thereof is legally permissible) at the Class B-1 Pass-Through
Rate.
"Unpaid Class B-2 Interest Shortfall" means, as to any Payment Date, the
amount, if any, of the Class B-2 Interest Shortfall for the prior Payment Date,
plus one month's interest thereon (to the extent payment thereof is legally
permissible) at the Class B-2 Pass-Through Rate.
"Unpaid Class B-2 Liquidation Loss Interest Shortfall" means, as to any
Payment Date, the amount, if any, of the Class B-2 Liquidation Loss Interest
Shortfall for the prior Payment Date, plus one month's interest thereon (to the
extent payment thereof is legally permissible) at the Class B-2 Pass-Through
Rate.
"Weighted Average Loan Rate" means, for any Payment Date, the weighted
average (determined by Scheduled Principal Balance) of the Loan Interest Rates
for all Loans that were outstanding during the immediately preceding month.
"Weighted Average Pass-Through Rate" means, for any Payment Date, with
respect to any Loan, the sum of the weighted average (expressed as a percentage
and rounded to four decimal places) of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class B-1 and Class B-2 Pass-Through Rates, weighted on
the basis of the respective Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class B-1 and Class B-2 Principal Balances for such Payment Date.
SECTION 1.03. Calculations. Except as otherwise provided in this Agreement,
all interest rate and basis point calculations under this Agreement will be made
on the basis of a 360-day year and twelve 30-day months and will be carried out
to at least three decimal places.
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<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-D. The
Trust shall be administered pursuant to the provisions of this Agreement
for the benefit of the Certificateholders and the Class C
Certificateholder.
b. The Seller hereby transfers, assigns, sets over and otherwise
conveys to the Trustee on behalf of the Trust, by execution and delivery of
an assignment substantially in the form of Exhibit D hereto, all the right,
title and interest of the Seller in and to the Initial Loans and Additional
Loans, including all rights to receive payments on or with respect to the
Initial Loans and Additional Loans due after the applicable Cut-off Date,
all rights of the Seller under the Transfer Agreement and all other assets
now or hereafter included in the Trust Fund. Each such transfer and
assignment is intended by the Seller to be a sale of such assets for all
purposes, including, without limitation, the Federal Bankruptcy Code, to
the end that all such assets will hereafter cease to be the property of the
Seller and would not be includable in the estate of the Seller or the
Originator for purposes of Section 541 of the Federal Bankruptcy Code.
c. Although the parties intend that each conveyance pursuant to this
Agreement of the Seller's right, title and interest in and to the Loans
(including the Subsequent Loans) shall constitute a purchase and sale and
not a loan, if such conveyances are deemed to be loans, the parties intend
that the rights and obligations of the parties to such loans shall be
established pursuant to the terms of this Agreement. If the conveyances are
deemed to be loans, the parties further intend and agree that the
Originator and the Seller shall be deemed to have granted to the Trustee
and the Originator and the Seller do hereby grant to the Trustee, a
perfected first-priority security interest in the Trust Fund and that this
Agreement shall constitute a security agreement under applicable law. If
the trust created by this Agreement terminates prior to the satisfaction of
the claims of any Person under any Certificate or Class C Certificate, the
security interest created hereby shall continue in full force and effect
and the Trustee shall be deemed to be the collateral agent for the benefit
of such Person.
SECTION 2.02. Conditions to the Closing. On or before the Closing Date, the
Seller shall deliver or cause to be delivered the following documents to the
Trustee:
a. The List of Loans attached to this Agreement as Exhibit L,
certified by the Chairman of the Board, President or any Vice President of
the Seller.
b. A certificate of an officer of the Originator substantially in the
form of Exhibit E- 1 hereto on behalf of the Originator and a certificate
of an officer of the Seller substantially in the form of Exhibit E-2
hereto.
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<PAGE>
c. An Opinion of Counsel for the Seller substantially in the form of
Exhibit F hereto.
d. A letter, acceptable to the Underwriters and the Certificate
Insurer, from PricewaterhouseCoopers LLP or another nationally recognized
accounting firm, stating that such firm has reviewed the Initial Loans on a
statistical sampling basis and setting forth the results of such review.
e. Copies of resolutions of the board of directors of the Seller or of
the executive committee of the board of directors of the Seller approving
the execution, delivery and performance of this Agreement and the
transactions contemplated hereunder, certified in each case by the
secretary or an assistant secretary of the Seller.
f. Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota.
g. An Officer's Certificate listing the Servicer's Servicing Officers.
h. Evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy.
i. Evidence of deposit in the Certificate Account of all funds
received with respect to the Loans from the Cut-off Date to the Closing
Date, other than principal due on or before the Cut-off Date, together with
an Officer's Certificate to the effect that such amount is correct.
j. The Loan Files for the Initial Loans and Additional Loans and an
Officer's Certificate confirming that the Originator has reviewed the
original of each related promissory note and each related Loan File, that
each such Loan and Loan File conforms in all material respects with the
List of Loans and that each such Loan File is complete in accordance with
the definition thereof and has been delivered to the Trustee (or its
custodian).
k. An executed copy of each of the Insurance Agreement, the
Certificate Insurance Policy, the Premium Letter and the Indemnification
Agreement.
l. Evidence of the deposit of $386,840,759.01 in the Pre-Funding
Account, $3,568,930.02 in the Capitalized Interest Account, and, in the
Undelivered Loan Account, an amount equal to the aggregate of the Cut-off
Date Principal Balances of the Undelivered Loans.
m. An executed copy of the Transfer Agreement.
n. Letters from each of the Rating Agencies evidencing the following
ratings for the Certificates:
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<PAGE>
Class S&P Moody's
--------------------- --------------------- ---------------------
A-1 AAA Aaa
A-2 AAA Aaa
A-3 AAA Aaa
A-4 AAA Aaa
A-5 AAA Aaa
B-1 BBB+ Baa1
o. An executed copy of the Backup Servicing Agreement.
p. UCC-1 financing statements identifying the Originator as debtor and
the Seller as secured party for filing in Minnesota and Delaware and
identifying the Seller as debtor and the Trustee as secured party for
filing in Minnesota.
q. A certificate of an officer of the Originator and the Seller to
which is attached a list of Loans identified for sale to the Trust as
Subsequent Loans.
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, other than under generally accepted accounting
principles, including, without limitation, the Federal Bankruptcy Code, to
the end that all such assets will hereafter cease to be the property of the
Seller and would not be includable in the estate of the Seller for purposes
of Section 541 of the Federal Bankruptcy Code.
The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Loans. The purchase price of Subsequent Loans shall be paid solely with
amounts in the Pre-Funding Account, as provided in Section 8.08(b). 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:
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<PAGE>
(i) the Seller shall have provided the Trustee with an Addition
Notice at least five Business Days prior to the Subsequent Transfer
Date and shall have provided any information reasonably requested by
the Trustee with respect to the Subsequent Loans;
(ii) the Seller shall have delivered the related Loan File for
each Subsequent Loan to the Trustee at least two Business Days prior
to the Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument substantially in the form of
Exhibit O, which shall include a List of Loans identifying the related
Subsequent Loans;
(iv) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the Seller shall not
be insolvent nor shall it have been made insolvent by such transfer
nor shall it be aware of any pending insolvency;
(v) such sale and transfer shall not result in a material adverse
tax consequence to the Trust (including the REMIC) or the
Certificateholders or Class C Certificateholder;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an Officer's
Certificate, substantially in the form attached hereto as Exhibit P,
confirming the satisfaction of each condition precedent and the
representations specified in this Section 2.03 and in Sections 3.01
and 3.03;
(viii) the Seller and the Originator shall have delivered to the
Trustee Opinions of Counsel addressed to the Rating Agencies, the
Certificate Insurer and the Trustee with respect to the transfer of
the Subsequent Loans substantially in the form of the Opinions of
Counsel delivered to the Trustee on the Closing Date regarding certain
bankruptcy, corporate and tax matters;
(ix) no Subsequent Loan will have a Combined LTV greater than
100%;
(x) the Seller shall have delivered to the Trustee an executed
copy of a Subsequent Transfer Agreement between the Originator and the
Seller; and
(xi) the Trustee shall have delivered its Acknowledgment as
described in Section 2.04(a).
c. On or before the earlier of the day of last transfer of Subsequent
Loans to the Trust or the last day of the Pre-Funding Period, the Seller
shall deliver to the Trustee:
(i) A letter from PricewaterhouseCoopers LLP or another
nationally recognized accounting firm retained by the Seller (with
copies provided to the Rating Agencies, the Underwriters and the
Trustee) that is in form, substance and methodology
2-4
<PAGE>
the same as that delivered under Section 2.02(d) of this Agreement and
is acceptable to the Certificate Insurer, except that it shall address
the Subsequent Loans and their conformity in all material respects to
the characteristics described in Sections 2.03(b)(ix) and 3.04(b) of
this Agreement.
(ii) Evidence that, as a result of the purchase by the Trust of
the Subsequent Loans, none of the ratings assigned to the Class A
Certificates as of the Closing Date by the Rating Agencies will be
reduced, withdrawn or qualified.
(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.
(iv) The acknowledgment of the Certificate Insurer that the
Subsequent Loans, as represented by the Originator, satisfy the
Certificate Insurer's criteria for their inclusion in the Trust.
SECTION 2.04. Acceptance by Trustee.
a. On the Closing Date and each Subsequent Transfer Date, if the
conditions set forth in Section 2.02 and 2.03, respectively, have been
satisfied, the Trustee shall deliver a certificate to the Seller
substantially in the form of Exhibit G hereto (an "Acknowledgment")
acknowledging conveyance of the Loans identified on the applicable List of
Loans and the related Loan Files to the Trustee and declaring that the
Trustee, directly or through a Custodian, will hold all Loans that have
been delivered in trust, upon the trusts herein set forth, for the use and
benefit of all Certificateholders and the Class C Certificateholder.
b. The Trustee or a Custodian shall review each Loan File, as
described in Exhibit G, within 60 days of the Closing Date or later receipt
by it of the Loan File. If, in its review of the Loan Files as described in
Exhibit G, the Trustee or a Custodian discovers a breach of the
representations or warranties set forth in Sections 2.03, 3.02, 3.03, 3.04
or 3.05 of this Agreement, or in the Officer's Certificates delivered
pursuant to Section 2.02(j), 2.03(b)(vii), 2.06(ii) or 3.06(b)(ii) of this
Agreement, the Trustee or Custodian, as the case may be, shall notify the
Seller and the Certificate Insurer and the Originator shall cure such
breach or repurchase or replace such Loan pursuant to Section 3.06.
c. The Trustee or the Custodian shall promptly, and in any event no
later than [thirty (30)] days following its receipt of a Loan File
containing any note endorsed in blank or assignment of mortgage, deed of
trust or other security deed, assigned in blank, (i) endorse the note as
follows: "Pay to the order of U.S. Bank Trust National Association, not in
its individual capacity but as trustee for Conseco Finance Home Equity Loan
Trust 2000-D," and (ii) complete each assignment to U.S.Bank Trust National
Association, not in its individual capacity but as trustee for Conseco
Finance Home Equity Loan Trust 2000-D."
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<PAGE>
SECTION 2.05. REMIC Provisions.
a. The Originator, as Servicer, and the Class C Certificateholder, by
acceptance thereof, each agrees that, in accordance with the requirements
of Section 860D(b)(1) of the Code, the federal tax return of the Trust for
its first taxable year shall provide an election for the Trust (exclusive
of the Pre-Funding Account, Undelivered Loan Account and the Capitalized
Interest Account) to be treated as a REMIC under the Code for such taxable
year and all subsequent taxable years, and the Trustee shall sign such
return. In furtherance of the foregoing, the Trustee (at the direction of
the Originator, the Seller or the Servicer), the Originator, the Seller and
the Servicer shall take, or refrain from taking, all such action as is
necessary to maintain the status of the Trust as a REMIC under the REMIC
Provisions of the Code, including, but not limited to, the taking of such
action as is necessary to cure any inadvertent termination of REMIC status.
For purposes of the REMIC election (i) the Certificates shall be designated
as the "regular interests" in the REMIC and (ii) the Class C Certificate
shall be designated as the sole class of "residual interests" in the REMIC.
The Trustee shall not permit the creation of any "interests" in the REMIC
(within the meaning of the REMIC Provisions) other than the Certificates
and the Class C Certificate.
b. The Certificates are being issued in seven classes. The following
terms of the Certificates are irrevocably established as of the Closing
Date:
<TABLE>
<CAPTION>
Original Class
Class Pass-Through Rate Per Annum Principal Balance
------------------- ------------------------------------------------------- ---------------------
<S> <C> <C>
Class A-1 7.52% $ 356,000,000
Class A-2 7.67% $ 74,000,000
Class A-3 7.89% $ 226,000,000
Class A-4 8.17% $ 141,000,000
Class A-5 8.41% $ 138,000,000
Class B-1 a floating rate equal to the Weighted Average $ 6,000,000
Loan Rate, but in no event greater than 11.26%
Class B-2 a floating rate equal to the Weighted Average $ 59,000,000
Loan Rate, but in no event greater than 11.30%
</TABLE>
c. The Closing Date, which is the day on which the Trust will issue
all of its regular and residual interests, is hereby designated as the
"startup day" of the REMIC within the meaning of Section 860G(a)(9) of the
Code.
d. After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall (i) accept any contribution of assets to the
Trust, (ii) dispose of any portion of the Trust other than as provided in
Sections 3.06, 3.07 and 8.06, (iii) engage in any transaction that would
result in the imposition of tax on "prohibited transactions," as defined in
Section 860F(a)(1) of the Code, (iv) accept any contribution after the
Closing Date that is subject to the tax imposed by Section 860G(d) of the
Code or (v) engage in any activity or enter into any agreement that would
result in the receipt by the Trust of any "net income from foreclosure
property" as defined in Section 860G(c)(2) of the Code, unless, prior to
any such action set forth in clauses (i), (ii), (iii), (iv) or (v), the
Trustee shall have received an unqualified Opinion of
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Counsel, which opinion shall not be an expense of the Trust, stating that
such action will not, directly or indirectly, (A) adversely affect the
status of the Trust as a REMIC or the status of the Certificates and Class
C Certificate as "regular interests" and the sole class of "residual
interests," respectively, therein, in each case for federal income tax
purposes, (B) affect the distributions payable hereunder to the
Certificateholders or the Class C Certificateholder or (C) result in the
imposition of any lien, charge or encumbrance upon the Trust.
e. Upon the acquisition of any real property (including interests in
real property), or any personal property incident thereto, in connection
with the default of a Loan, the Servicer and the Trustee (at the direction
of the Servicer) shall take, or cause to be taken, such action as is
necessary to sell or otherwise dispose of such property within such period
as is then required by the Code in order for such property to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the
Code, unless the Servicer and the Trustee receive an Opinion of Counsel to
the effect that the holding by the Trust of such property subsequent to the
period then permitted by the Code will not result in the imposition of any
taxes on "prohibited transactions" of the Trust, as defined in Section 860F
of the Code, or cause the Trust to fail to qualify as a REMIC at any time
that the Certificates or Class C Certificate are outstanding. The Servicer
shall manage, conserve, protect and operate such real property, or any
personal property incident thereto, so that such property will not fail to
qualify as "foreclosure property," as defined in Section 860G(a)(8) of the
Code, and that the management, conservation, protection and operation of
such property will not result in the receipt by the Trust of any income
attributable to any asset which is neither a qualified mortgage nor a
permitted investment within the meaning of the REMIC Provisions.
SECTION 2.06. Seller Option to Substitute for Prepaid Loans. The Seller
may, at its option, substitute new loans for Loans as to which a Principal
Prepayment in Full has been received by the Servicer prior to September 26, 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) 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 26, 2000;
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<PAGE>
(v) 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 11 of Exhibit F hereto;
(vi) 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; and
(vii) the acknowledgment of the Certificate Insurer that the Eligible
Substitute Loan, as represented by the Originator, satisfies the
Certificate Insurer's criteria for its inclusion in the Trust.
Upon satisfaction of such conditions, the Trustee shall add such Loan to be
substituted to the List of Loans.
Any substitutions pursuant to this Section 2.06 may be accomplished on
a loan-by-loan basis or on an aggregate basis as to all Prepaid Loans with
respect to a given calendar month.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
The Seller and the Originator make the following representations and
warranties. The Trustee will rely on the representations and warranties in
accepting the Loans in trust and issuing the Certificates and the Class C
Certificate on behalf of the Trust, and the Certificate Insurer will rely on the
representations and warranties in issuing the Certificate Insurance Policy. 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
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<PAGE>
Seller, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Seller is a party or by which the
Seller may be bound.
e. Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement, the Certificates or the Class
C Certificate which, if adversely determined, would in the opinion of the
Seller have a material adverse effect on the transactions contemplated by
this Agreement.
f. Licensing. The Seller is duly licensed in each state in which Loans
were originated to the extent the Seller is required to be licensed by
applicable law in connection with the origination and servicing of the
Loans.
g. Chief Executive Office. The Seller is incorporated under the laws
of the State of Minnesota and its chief executive office is at 1100
Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639.
h. Absolute Sale. The Seller intends that the transfer of Loans
constitute a complete and absolute sale, removing the Loans from the
Seller's estate, for purposes of Section 541 of the United States
Bankruptcy Code, as amended.
i. No Default. The Seller is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default would materially and
adversely affect the condition (financial or other) or operations of the
Seller or its properties or the consequences of which would materially and
adversely affect its performance under this Agreement and under the other
Transaction Documents. The Seller is not in default under any agreement
involving financial obligations or on any outstanding obligation which
would materially adversely impact the financial condition or operations of
the Seller or legal documents associated with the transaction contemplated
by this Agreement or the other Transaction Documents.
j. No Material Adverse Change. To the best knowledge of the Seller,
there has been no material adverse change in any information submitted by
the Seller in writing to the Certificate Insurer with respect to the
transactions contemplated by this Agreement (unless such information was
subsequently supplemented in writing).
k. Non-consolidation. For so long as Green Tree Finance Corp.--Two
("GTFC2") is the Class C Certificateholder, the Seller covenants that:
(i) it will at all times hold out to the public, including the
respective creditors of the Seller and GTFC2, that each is a separate
entity from the other. The Seller and GTFC2 will not share a common
logo. The Seller will not hold out or consider GTFC2 as a department
or division of the Seller.
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<PAGE>
(ii) Other than the payment of certain of the organizational
expenses of GTFC2 by the Seller, GTFC2 will be responsible for the
payment of all its losses, obligations and expenses, and it will be
adequately capitalized to conduct its business.
(iii) All transactions and dealings between the Seller and GTFC2
will be on such terms and conditions as would be generally available
to entities unaffiliated with the Seller in comparable transactions.
All such transactions have been and will be made only with prior
approval of GTFC2's Board of Directors, at arm's length, in good
faith, and without the intent to hinder, delay or defraud creditors of
either entity, and transfers between the Seller and GTFC2 will not be
made if the party making the transfer is insolvent or would be
rendered insolvent by the transfer.
(iv) Following the issuance of the Certificates, the Seller will
disclose all material transactions associated with the transaction in
communications to its shareholders and in public announcements which
will disclose the separate corporate identity of GTFC2 and that the
assets of GTFC2 will not be available for payment of creditors' claims
in the event of the insolvency of the Seller.
(v) GTFC2 will comport itself in a manner consistent with the
factual assumptions contained in the "nonconsolidation opinion" of
Briggs and Morgan, Professional Association, dated June 28, 2000
rendered in connection with the issuance of the Certificates.
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 and the Certificate Insurer, 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 30 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.
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<PAGE>
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 flood insurance has been made available in
the locale where the property is located), the property is covered by a
flood insurance policy of the nature and in an amount which is consistent
with the servicing standard set forth in Section 5.02.
g. Combined LTV. The Combined LTV for the Loan is not greater than
100%.
h. Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Loan under this Agreement or pursuant to transfers of the
Certificates or Class C 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.
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<PAGE>
j. Loan in Force. The Loan has not been satisfied or subordinated in
whole or in part or rescinded, and the real estate securing such Loan has
not been released from the lien of such Loan in whole or in part.
k. Valid Lien. The Loan has been duly executed and delivered by the
Obligor, and the lien created thereby has been duly recorded, or has been
delivered to the appropriate governmental authority for recording and will
be duly recorded within 180 days, and constitutes a valid and perfected
first, second or third priority lien, as the case may be, on the real
estate described in such Loan.
l. Capacity of Parties. The signature(s) of the Obligor(s) on the Loan
are genuine and all parties to the Loan had full legal capacity to execute
the Loan.
m. Good Title. The Originator is the sole owner of the Loan and has
the authority to sell, transfer and assign such Loan to the Seller under
the terms of the Transfer Agreement. There has been no assignment, sale or
hypothecation of the Loan by the Originator except the usual past
hypothecation of the Loan in connection with the Originator's normal
banking transactions in the conduct of its business, which hypothecation
terminates upon sale of the Loan to the Seller. The Originator has good and
marketable title to the Loan, free and clear of any encumbrance, equity,
loan, pledge, charge, claim, lien or encumbrance of any type and has full
right to transfer the Loan to the Seller.
n. No Defaults. As of the applicable Cut-off Date, there was no
default, breach, violation or event permitting acceleration existing under
the Loan and no event which, with notice and the expiration of any grace or
cure period, would constitute such a default, breach, violation or event
permitting acceleration under such Loan (except payment delinquencies
permitted by clause (b) above). The Originator has not waived any such
default, breach, violation or event permitting acceleration except payment
delinquencies permitted by clause (b) above.
o. Equal Installments. The Loan provides for monthly payments (except,
in the case of a Balloon Loan, for the final monthly payment of such Loan)
which fully amortize the Loan over its term.
p. [Reserved].
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).
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<PAGE>
s. Origination. The Loan was originated by a home equity lender in the
ordinary course of such lender's business or was originated by the
Originator directly.
t. Underwriting Guidelines. The Loan was originated or purchased in
accordance with the Originator's then-current underwriting guidelines.
u. Good Repair. The property described in the Loan is, to the best of
the Originator's knowledge, free of damage and in good repair.
v. Qualified Mortgage. The Loan is a "qualified mortgage" within the
meaning of the REMIC Provisions. The Originator represents and warrants
that, either as of (i) the date of origination (within the meaning of the
REMIC Provisions) or (ii) the Closing Date or, if a Subsequent Loan, the
Subsequent Transfer Date, the fair market value of the interest in real
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. Title Insurance. The Loan is covered by an American Land Title
Association lender's title insurance policy.
x. Prepayment Term. No Prepayment Charges are payable under the Loan
after the 60th month following the origination date of the Loan.
y. No Government Loans. No Obligor is the United States government or
an agency, authority, instrumentality or other political subdivision of the
United States government.
z. Consolidation of Advances. Any advances made after the date of
origination of the Loan but prior to the Cutoff Date have been consolidated
with the outstanding principal amount secured by the related mortgage, and
the secured principal amount, as consolidated, bears a single interest rate
and single repayment term reflected on the List of Loans. The consolidated
principal amount does not exceed the original principal amount of the Loan.
The Loan does not obligate the Servicer to make future advances to the
Obligor at the option of the Obligor.
aa. Condemnation. There is no proceeding pending or threatened for the
total or partial condemnation of the real property that is described in the
Loan, nor is such a proceeding currently occurring.
bb. Encroachments. Any improvements which were included for the
purposes of determining the appraised value of any real property securing
the Loan are wholly within the boundaries and building restriction lines of
such real property, and no improvements on adjoining properties encroach
upon such real property.
cc. Zoning. No improvement located on or part of any real property
that is described in the Loan is in violation of any applicable zoning law
or regulation, and all
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<PAGE>
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the property and, with respect to the
use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained
from the appropriate authorities and such property is lawfully occupied
under the applicable law.
dd. Deeds of Trust. If the Loan constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Loan, and
no fees or expenses are or will become payable by the Trustee to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the related Obligor.
ee. Remedies. The Loan contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the related property of the benefits of the security,
including (i) in the case of a mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption, other than any applicable redemption rights
available to the related Obligor, which would materially interfere with the
right to sell the related property at a trustee's sale or the right to
foreclose the related mortgage.
ff. Appraisal. The Loan was, to the extent required by the
Originator's underwriting guidelines, originated based upon a full
appraisal, which included an interior inspection of the subject property by
a qualified appraiser, duly appointed by the Originator, who had no
interest, direct or indirect in the related real property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Loan.
gg. Hazardous Substances. The Originator has no actual knowledge that
there exist any hazardous substances, hazard wastes or solid wastes, as
such terms are defined in the Comprehensive Environmental Response
Compensation and Liability Act, the Resource Conservation and Recovery Act
of 1976, or other federal, state or local environmental legislation, on any
real property described in the Loan.
hh. Ground Lease. With respect to any real property described in the
Loan subject to a ground lease (i) the current ground lessor has been
identified and all ground rents which have previously become due and owing
have been paid, (ii) the ground lease term extends, or is automatically
renewable, for at least five years beyond the maturity date of the Loan,
(iii) the ground lease has been duly executed and recorded, (iv) the amount
of the ground rent and any increases therein are clearly identified in the
lease and are for predetermined amounts at predetermined times, (v) the
ground rent payment is included in the Obligor's monthly payment as an
expense item in determining the qualification of the borrower for the Loan,
(vi) the Originator has the right to cure defaults on the ground lease, and
(vii) the terms and conditions of the leasehold do not prevent the free and
absolute marketability of the property.
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<PAGE>
ii. Defaults on Prior Liens. The Originator has not received notice of
default of any prior mortgage loan secured by any real property described
in the Loan which default has not been cured by a party other than the
Originator.
jj. Certain Advances. The Originator has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a party
other than the owner of any real property described in the Loan or the
Obligor, directly or indirectly, for the payment of any amount required by
any Loan.
kk. Review of the Loan File. The Originator has reviewed all of the
documents constituting the Loan File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein.
ll. Knowledge of Certain Facts. The Originator has no knowledge of any
circumstances or conditions not reflected in the representations set forth
herein, or in the Loan File with respect to the Loan, the related real
property or the related Obligor which, in the Originator's opinion, could
reasonably be expected to affect materially and adversely the value of
related real property, the marketability of the Loan, or cause the Loan to
become delinquent or otherwise in default.
mm. Manufactured Home. The Loan is not a loan in respect of a
manufactured home or the land on which a manufactured home or manufactured
home will be placed.
nn. No Errors, Omissions, Etc. No error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to the Loan has taken
place on the part of any person, including without limitation the Obligor,
any appraiser, any builder or developer, or any other party involved in the
origination of the Loan or in the application of any insurance in relation
to the Loan.
oo. Servicing. The Loan has been serviced in accordance with all
applicable laws and, to the best of the Originator's knowledge, no fraud or
misrepresentation was committed by any Person in connection therewith.
pp. Inspection. Upon completion of all home improvements in excess of
$5,000, the real property securing such Loan was inspected by the
Originator or its agents.
qq. No Bankruptcies. The real property described in the Loan has not
been subject to any bankruptcy proceeding or foreclosure proceeding to
which the Obligor was a party, and the Obligor has not filed for protection
under applicable bankruptcy laws. There is no homestead or other exemption
available to the Obligor which would interfere with the right to sell the
real property at a trustee's sale or the right to foreclose the related
mortgage. The Obligor has not notified the Originator, and the Originator
has no knowledge of, any relief requested or allowed to the Obligor under
the Soldier's and Sailors' Civil Relief Act of 1940, as amended.
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rr. Certain Disclosure Statements. Each Obligor has executed a
statement to the effect that it has received all disclosure materials
required by applicable law with respect to the making of fixed rate
mortgage loans and rescission materials with respect to home improvement
loans, and such statement will be retained.
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 and the Certificate Insurer, as of the Closing
Date with respect to each Loan identified on the List of Loans attached to this
Agreement as Exhibit L and as of each Subsequent Transfer Date with respect to
each Subsequent Loan identified on the List of Loans attached to the related
Subsequent Transfer Instrument:
a. Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer
of the Loan under this Agreement or pursuant to transfers of the
Certificates or Class C Certificate unlawful or render the Loan
unenforceable. The Seller has duly executed a valid blanket assignment of
the Loans transferred to the Trust, and has transferred all its right,
title and interest in such Loans. The blanket assignment, any and all
documents executed and delivered by the Seller pursuant to Sections 2.01(b)
and 2.03(b), and this Agreement each constitutes the legal, valid and
binding obligation of the Seller enforceable in accordance with its
respective terms.
b. Good Title. The Seller is the sole owner of the Loan and has the
authority to sell, transfer and assign such Loan to the Trust under the
terms of this Agreement. There has been no assignment, sale or
hypothecation of the Loan by the Seller. The Seller has good and marketable
title to the Loan, free and clear of any encumbrance, equity, loan, pledge,
charge, claim, lien or encumbrance of any type and has full right to
transfer the Loan to the Trust.
SECTION 3.04. Representations and Warranties Regarding the Loans in the
Aggregate. The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders and the Class C
Certificateholder, as of the Closing Date with respect to the Initial Loans and
Additional Loans, and as of each Subsequent Transfer Date with respect to the
related Subsequent Loans, that:
a. Amounts. As of the Closing Date, the sum of the Cut-off Date Pool
Principal Balance, plus the Original Pre-Funded Amount, equals at least the
Original Aggregate Certificate Principal Balance. By Cut-off Date Principal
Balance, the Initial Loans and Additional Loans plus the Subsequent Loans
specifically identified as of the Closing Date represent at least 75% of
the Original Aggregate Certificate Principal Balance.
b. Characteristics. The Loans have the following characteristics: (i)
100% are secured by a mortgage, deed of trust or security deed creating a
first, second or third lien on the related real estate; (ii) none has a
remaining or original maturity of more than
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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 June 2030 and no Subsequent Loan has a final scheduled payment date
later than September 2030; (iv) none had a principal balance at origination
of more than $370,000; and (v) none of the Initial or Additional Loans has
a Loan Interest Rate less than 7.03%.
LTV. The weighted average (by Scheduled Principal Balance) Combined
LTV of the Loans as of the Post-Funding Payment Date will not be more than
200 basis points more than such ratio with respect to the Initial Loans.
Loan Interest Rate. 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.
Underwriting Criteria. 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.
Lien Priority. 75.65% (by Scheduled Principal Balance) of the Initial
Loans are secured by a first priority lien, 24.09% by a second priority
lien and 0.26% by a third priority lien. As of the Post-Funding Payment
Date, the percentage of the Loans secured by a second priority lien is not
more than 27.00% and not more than 0.70% are secured by a third priority
lien.
Debt Consolidation. The percentage (by Scheduled Principal Balance) of
the Loans as of the Closing Date which are identified by the Originator as
debt consolidation loans is 22.96%. As of the Subsequent Transfer Date,
such percentage of debt consolidation loans will not be greater than
27.00%.
Debt-to-Income. The weighted average (by Scheduled Principal Balance)
of the debt-to-income ratio of the Loans as of the Post-Funding Payment
Date will not be more than 44%.
Owner-Occupied. The percentage (by Scheduled Principal Balance) of the
Loans as of the Post-Funding Payment Date which are owner-occupied will be
at least 97.00%.
Single Family. The percentage (by Scheduled Principal Balance) of the
Loans as of the Post-Funding Payment Date which are single family will be
at least 90.00%.
FICO Score. The percentage (by Scheduled Principal Balance) of the
Loans as of the Post-Funding Payment date which have FICO scores below 620
is no more than 47.5%.
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c. Geographic Concentrations. By Cut-off Date Principal Balance,
10.76% of the Initial and Additional Loans are secured by property located
in California, 6.30% in New York, 5.77 % in Florida and 5.56% in Michigan.
No other state represents more than 5% 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 Principal Balance, were originated by any one lender (other than the
Originator).
g. Home Ownership and Equity Protection Act. With respect to any Loan
subject to the Home Ownership and Equity Protection Act of 1994, each such
Loan has been originated and serviced in compliance with the provisions
thereof.
SECTION 3.05. Representations and Warranties Regarding the Loan Files. The
Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders and the Class C
Certificateholder that:
a. Possession. On the Closing Date, the Trustee or a Custodian will
have possession of each original Initial Loan and Additional Loan and the
related Loan File. On each Subsequent Transfer Date, the Originator will
have possession of each original Subsequent Loan being transferred to the
Trust on that Subsequent Transfer Date and the related Loan File. There are
and there will be no custodial agreements or servicing contracts in effect
materially and adversely affecting the rights of the Originator to make, or
cause to be made, any delivery required hereunder or under the Transfer
Agreement.
b. Bulk Transfer Laws. The transfer, assignment and conveyance of the
Loans and the Loan Files by the Originator pursuant to the Transfer
Agreement is not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
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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 Certificate Insurer, the Seller or the
Trustee first discovers, or the Originator or the Servicer 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 an Officer's Certificate delivered
pursuant to Sections 2.02(j), 2.03(b)(vii), 2.06(ii) or 3.06(b)(vi), that
materially and adversely affects the Trust's, the Certificate Insurer's,
the Certificateholders' or the Class C Certificateholder's interest in such
Loan and which breach has not been cured within such time; provided,
however, that (i) in the event that a party other than the Originator first
becomes aware of such breach, such discovering party shall notify the
Originator in writing within 5 Business Days of the date of such discovery,
(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, plus interest, at the Loan Interest Rate, on the amount of
such deficiency, from the Cut-off Date to the date of deposit, and (iii)
any repurchase of Loans as a result of the breach of a representation and
warranty set forth in Section 3.03 shall be without adverse selection of
Loans, as determined by the Certificate Insurer. 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;
(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
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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 11 of Exhibit F hereto;
(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; and
(vi) the Certificate Insurer shall have acknowledged that the
Loan to be substituted as an Eligible Substitute Loan, as represented
by the Originator, satisfies the Certificate Insurer's criteria for
its inclusion in the Trust.
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 the Rating Agencies.
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 Certificate Insurer, the Certificateholders, and the Class C
Certificateholder against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may
be asserted against or incurred by any of them as a result of any
third-party action arising out of any breach of any such representation and
warranty.
SECTION 3.07. No Repurchase Under Certain Circumstances. Notwithstanding
any provision of this Agreement to the contrary, no repurchase or substitution
pursuant to Section 3.06 shall be made unless the Originator (at its own
expense) obtains for the Trustee an Opinion of Counsel addressed to the Trustee
that any such repurchase or substitution would not, under the REMIC Provisions,
(i) cause the Trust to fail to qualify as a REMIC while any regular interest in
such REMIC is outstanding, (ii) result in a tax on prohibited transactions
within the meaning of Section 860F(a)(2) of the Code or (iii) constitute a
contribution after the startup day subject to tax under Section 860G(d) of the
Code. The Originator diligently shall attempt to obtain such Opinion of Counsel.
In the case of a repurchase or deposit pursuant to Section 3.06(a) or (b), the
Originator shall, notwithstanding the absence of such opinion as to the
imposition of any tax as
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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.
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ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
-----------------------------------------------------------
SECTION 4.01. Transfer of Loans.
a. On or prior to the Closing Date, or the Subsequent Transfer Date in
the case of Subsequent Loans, the Originator shall deliver the Loan Files
to the Trustee. The Trustee shall maintain the Loan Files at its office or
with a duly appointed Custodian, who shall act as the agent of the Trustee
on behalf of the Certificateholders. The Trustee may release a Loan File to
the Servicer pursuant to Section 5.07. The Originator has filed a form
UCC-1 financing statement regarding the sale of the Loans to the Seller,
and shall file continuation statements in respect of such UCC-1 financing
statement as if such financing statement were necessary to perfect the
security interest granted pursuant to Section 2.01. The Originator shall
take any other actions necessary to maintain the perfection of such
security interest.
b. The Originator has delivered to the Trustee and the Certificate
Insurer an Opinion of Counsel to the effect that the execution and
recording of the assignments of the mortgages, deeds of trust and security
deeds securing the Loans is not necessary, in any jurisdiction other than
the State of Maryland, to effect the assignment to the Trustee of the
Originator's lien on the real property securing each Loan. The Originator
will, or will cause the Trustee, at the Originator's expense, to file in
the appropriate recording offices within 60 days of the Closing Date, each
mortgage, deed of trust and security deed that encumbers real property
located in Maryland.
c. Notwithstanding the delivery of the Opinion of Counsel referred to
in Section 4.01(b), the Originator, as Servicer, and at its expense, will,
or will cause the Trustee to, deliver to the appropriate recording office,
an assignment of each mortgage, deed of trust and security deed securing a
Loan for recording within ten (10) Business Days after the earlier to occur
of (i) a Service Transfer, (ii) a Servicer Termination Event, and (iii) an
Event of Default under the Insurance Agreement.
SECTION 4.02. Costs and Expenses. The Originator, as Servicer, agrees to
pay all reasonable costs and disbursements in connection with the vesting
(including the perfection and the maintenance of perfection, as against all
third parties) in the Trust of all right, title and interest in and to the Loans
(including, without limitation, the mortgage or deed of trust on the related
real estate granted thereby).
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ARTICLE V
SERVICING OF LOANS
------------------
SECTION 5.01. Responsibility for Loan Administration. The Servicer will
have the sole obligation to manage, administer, service and make collections on
the Loans and perform or cause to be performed all contractual and customary
undertakings of the holder of the Loans to the Obligor. Conseco Finance Corp.,
if it is the Servicer, may delegate some or all of its servicing duties to a
wholly owned subsidiary of Conseco Finance Corp., for so long as such subsidiary
remains, directly or indirectly, a wholly owned subsidiary of Conseco Finance
Corp. Notwithstanding any such delegation Conseco Finance Corp. shall retain all
of the rights and obligations of the Servicer hereunder. The Trustee, at the
request of a Servicing Officer, shall furnish the Servicer with any powers of
attorney or other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder. Conseco Finance
Corp. is hereby appointed the Servicer until such time as any Service Transfer
shall be effected under Article VII.
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 the Certificate Insurer and their 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 Certificate Insurer or their authorized agents. The
examination referred to in this Section will be conducted in a manner which
does not unreasonably interfere with the Servicer's normal operations or
customer or employee relations. Without otherwise limiting the scope of the
examination the Trustee or the Certificate Insurer may make, the Trustee
and the Certificate Insurer may, using generally accepted audit procedures,
verify the status of each Loan and review the Electronic Ledger and records
relating thereto for conformity to Monthly Reports prepared pursuant to
Article VI and compliance with the standards represented to exist as to
each Loan in this Agreement.
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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 the Trustee, the Certificate Insurer, the Certificateholders
and the Class C 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, but excluding Ancillary Income, which Ancillary Income
shall be retained by the Servicer as compensation for servicing the Loans,
and excluding Liquidation Expenses and Maintenance Expenses permitted by
Section 5.08. The Trustee shall hold all amounts paid into the Certificate
Account under this Agreement in trust for the Trustee, the
Certificateholders and the Class C Certificateholder until payment of any
such amounts is authorized under this Agreement. Only the Trustee may
withdraw funds from the Certificate Account.
b. If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as
such, invest the amounts in the Certificate Account in Eligible Investments
that mature not later than one Business Day prior to the next succeeding
Payment Date. Any investment of funds in the Certificate Account shall be
made in Eligible Investments held by a financial institution in accordance
with the following requirements: (1) all Eligible Investments shall be held
in an account with such financial institution in the name of the Trustee,
and the agreement governing such account shall be governed by the laws of
the State of Minnesota, (2) with respect to securities held in such
account, such securities shall be (i) certificated securities (as such term
is used in N.Y. U.C.C. ss. 8-102(4)(i)), securities deemed to be
certificated securities under applicable regulations of the United States
government, or uncertificated securities issued by an issuer organized
under the laws of the State of New York or the State of Delaware, (ii)
either (A) in the possession of such institution, (B) in the possession of
a clearing corporation (as such term is used in Minn. Stat. ss. 8-102(5))
in the State of New York, registered in the name of such clearing
corporation or its nominee, not endorsed for collection or surrender or any
other purpose not involving transfer, not containing any evidence of a
right or interest inconsistent with the Trustee's security interest
therein, and held by such clearing corporation in an account of such
institution, (C) held in an account of such institution with the Federal
Reserve Bank of New York or the Federal Reserve Bank of Minneapolis, or (D)
in the case of uncertificated securities, issued in the name of such
institution, and (iii) identified, by book entry or otherwise, as held for
the account of, or pledged to, the Trustee on the records of such
institution, and such institution shall have sent the Trustee a
confirmation thereof, and (3) with respect to repurchase obligations held
in such account, such repurchase obligations shall be identified by such
institution, by book entry or otherwise, as held for the account of, or
pledged to, the Trustee on the records of such institution, and the related
securities shall be held in accordance with the requirements of clause (2)
above. Once such funds are invested, such
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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
and P-1 by Moody's (if rated by Moody's), 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 and Aaa by
Moody's, and whose only investments are in securities described in
clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any State thereof which have a credit rating of at least AA
from each of the Rating Agencies that has rated the corporation;
provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the corpus
of the Trust to exceed 10% of amounts held in the Certificate Account;
(vi) commercial paper having a rating of at least A-1+ from S&P
and at least P-1 from Moody's (if rated by Moody's) at the time of
such investment;
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(vii) money market funds rated at least AA by S&P and at least
Aa2 by Moody's; and
(viii) other obligations or securities that are approved by the
Certificate Insurer in advance and in writing and 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,
incur any Maintenance Expenses, commence proceedings for the foreclosure of
any subject real estate, or may take such other steps that in the
Servicer's reasonable judgment will maximize Liquidation Proceeds with
respect to the Loan, including, for example, the sale of the Loan to a
third party for foreclosure or enforcement and, in the case of any default
on a related prior mortgage loan, the advancing of funds to correct such
default and the advancing of funds to pay off a related prior mortgage
loan, which advances are Liquidation Expenses that will be reimbursed to
the Servicer out of related Liquidation Proceeds before the related Net
Liquidation Proceeds are paid to Certificateholders and the Class C
Certificateholder. The Servicer shall also deposit in the Certificate
Account any Net Liquidation Proceeds received in connection with any Loan
which became a Liquidated Loan in a prior Due Period.
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c. The Servicer may sue to enforce or collect upon Loans, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Loan, the act of commencement
shall be deemed to be an automatic assignment of the Loan to the Servicer
for purposes of collection only. If, however, in any enforcement suit or
legal proceeding it is held that the Servicer may not enforce a Loan on the
ground that it is not a real party in interest or a holder entitled to
enforce the Loan, the Trustee on behalf of the Trust shall, at the
Servicer's expense, take such steps as the Servicer deems necessary to
enforce the Loan, including bringing suit in its name or the names of the
Certificateholders and the Class 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, 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. No Loan may be modified, waived or extended more than
twice during any 5 year period without the Certificate Insurer's prior
written consent. The Servicer may not purchase any Loan from the Trust
other than (i) pursuant to Section 3.06 or (ii) up to 5% of the Cut-off
Date Pool Principal Balance in the order of the most delinquent, or (iii)
with the prior written consent of the Certificate Insurer.
g. The Servicer shall enforce any provision in a Loan for the payment
of Prepayment Charges if such enforcement is permitted by applicable law
and will not adversely affect any applicable insurance policy.
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
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such delivery and request, the Trustee shall promptly release or cause to
be released such Loan and Loan File to the Servicer. Upon receipt of such
Loan and Loan File, each of Conseco Finance Corp. (if different from the
Servicer) and the Servicer is authorized to execute an instrument in
satisfaction of such Loan and to do such other acts and execute such other
documents as the Servicer deems necessary to discharge the Obligor
thereunder and eliminate any lien on the related real estate. The Servicer
shall determine when a Loan has been paid in full; provided that, to the
extent that insufficient payments are received on a Loan credited by the
Servicer as prepaid or paid in full and satisfied, the shortfall shall be
paid by the Servicer out of its own funds, without any right of
reimbursement therefor (except from additional amounts recovered from the
related Obligor or otherwise in respect of such Loan), and deposited in the
Certificate Account.
b. From time to time as appropriate for servicing and foreclosing in
connection with a Loan, the Trustee shall, upon written request of a
Servicing Officer and delivery to the Trustee of a receipt signed by such
Servicing Officer, cause the original Loan and the related Loan File to be
released to the Servicer and shall execute such documents as the Servicer
shall deem necessary to the prosecution of any such proceedings. The
Trustee shall stamp the face of each such Loan to be released to the
Servicer with a notation that the Loan has been assigned to the Trustee.
Upon request of a Servicing Officer, the Trustee shall perform such other
acts as reasonably requested by the Servicer and otherwise cooperate with
the Servicer in enforcement of the Certificateholders' and Class C
Certificateholder's rights and remedies with respect to Loans.
c. The Servicer's receipt of a Loan and/or Loan File shall obligate
the Servicer to return the original Loan and the related Loan File to the
Trustee when its need by the Servicer has ceased unless the Loan shall be
liquidated or repurchased or replaced as described in Section 3.06 or
Section 8.06.
SECTION 5.08. Costs and Expenses. All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, including payment of all fees and
expenses incurred in connection with the enforcement of Loans, foreclosure upon
real estate securing Loans, all other fees and expenses not expressly stated
hereunder to be for the account of the Trust or the Originator, and, while the
Originator is Servicer, payment of the Trustee's fees pursuant to Section 11.06
and fees and expenses of accountants, shall be paid by the Servicer and the
Servicer shall not be entitled to reimbursement hereunder, except as provided in
Section 7.03, Section 8.04(a), and Section 8.04(b)(14), and except that the
Servicer shall be reimbursed for all Maintenance Expenses and out of the
Liquidation Proceeds of a Liquidated Loan for customary out-of-pocket
Liquidation Expenses incurred by it. The Servicer shall not incur such
Liquidation Expenses unless it determines in its good faith business judgment
that incurring such expenses will increase the Net Liquidation Proceeds on the
related Loan.
SECTION 5.09. Maintenance of Insurance. The Servicer shall at all times
keep in force a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement, and a fidelity
bond. Such policy or policies and such fidelity bond shall be in such form and
amount as is generally customary among persons who service a portfolio of home
equity loans having an aggregate principal amount of $10,000,000 or more, and
which are generally regarded as servicers acceptable to institutional investors.
The Servicer
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shall cause to be maintained with respect to the real property securing a Loan
hazard insurance (excluding flood insurance coverage) if such Loan is secured by
a first priority mortgage, deed of trust or security deed or the initial
principal balance of such Loan exceeds $30,000.
SECTION 5.10. Merger or Consolidation of Servicer. Any Person into which
the Servicer may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Servicer shall be a party shall be the successor of the Servicer hereunder,
provided such Person shall be an Eligible Servicer, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. The Servicer shall promptly
notify each of the Rating Agencies in the event it is a party to any merger,
conversion or consolidation.
SECTION 5.11 Appointment of Servicer. The Servicer shall act as servicer
under this Agreement, subject to the right of removal set forth in subsection
7.01, for an initial period commencing on the Closing Date and ending on the
last day of the calendar quarter in which such Closing Date occurred, which
period may be extended by the Certificate Insurer in its sole discretion for a
succeeding quarterly period on December 31, March 31, June 30 and September 30
of each year as provided below (each such quarterly period for which the
Servicer shall be designated to act as servicer hereunder, a "Term of Service");
provided that nothing in this Section shall prohibit the Certificate Insurer or
the Trustee from removing the Servicer pursuant to Section 7.01(a).
Notwithstanding the foregoing, the Certificate Insurer may, in its sole
discretion, extend the period for which the Servicer is to act as such for a
period in excess of one quarter (provided such extension shall be an additional
one or more quarters), but any such extension shall be revocable at any time by
the Certificate Insurer upon written notice delivered to the Trustee and the
Servicer at least fifteen days prior to the expiration of the related quarterly
period. Until such time as a Certificate Insurer Default shall have occurred and
be continuing, the Trustee agrees that if as of the fifteenth day prior to the
last day of a Term of Service, the Trustee shall not have received a notice
extending the term of the Servicer from the Certificate Insurer, the Trustee
shall, within five days thereafter, give written notice of such non-receipt to
the Certificate Insurer.
SECTION 5.12. Maintenance of Lien Interests in Real Property.
(a) Consistent with the policies and procedures required by this
Agreement or as directed by the Certificate Insurer, the Trustee or their
respective counsel, the Servicer shall take such steps as are necessary to
maintain perfection of the lien interest created by each Loan in the
related real property on behalf of the Trust, including but not limited to
obtaining the execution by the Obligors and the recording, registering,
filing, re-recording, re-filing, and re-registering of all security
agreements, financing statements, mortgages, deeds of trust, and
continuation statements as are necessary to maintain the security interest
granted by the Obligors under the respective Loans. In the event that the
assignment of a Loan to the Trust is insufficient, without a notation on
the related real estate's certificate of title, or without fulfilling any
additional administrative requirements under the laws of the state in which
the real estate is located, to perfect a security interest in the related
real estate in favor of the Trust, the Servicer hereby
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agrees that the Servicer's designation as the secured party on the
certificate of title is in its capacity as agent of the Trust.
(b) Upon the occurrence of a Servicer Termination Event, the Servicer
shall take or cause to be taken such action as may, in the opinion of the
Certificate Insurer, the Trustee, or their respective counsel, be necessary
to perfect or re-perfect the lien interests in the real estate securing the
Loans in the name of the Trustee by amending the title documents of real
estate or by such other reasonable means as may, in the opinion of the
Certificate Insurer, the Trustee, or their respective counsel, be necessary
or prudent. The Servicer hereby agrees to pay all expenses related to such
perfection or re-perfection and to take all action necessary therefor.
SECTION 5.13. Covenants, Representations, and Warranties of Servicer. By
its execution and delivery of this Agreement, the Servicer makes the following
representations, warranties and covenants on which the Trustee relies in
accepting the Loans and issuing the Certificates and on which the Certificate
Insurer relies in issuing the Certificate Insurance Policy.
(a) Liens in Force. The real estate securing each Loan shall not be
released in whole or in part from the lien interest granted by the Loan,
except upon payment in full of the Loan or as otherwise contemplated
herein;
(b) No Impairment. The Servicer shall do nothing to impair the rights
of the Trustee, the Certificate Insurer, or the Certificateholders in the
Loans, the Certificate Insurance Policy or the other property comprising
the Trust Fund; and
(c) No Amendments. The Servicer shall not extend or otherwise amend
the terms of any Loan, except in accordance with Section 5.06.
SECTION 5.14. Purchase of Loans Upon Breach of Covenant.
Upon discovery by any of the Servicer, Certificate Insurer, or the Trustee
of a breach of any of the covenants set forth in Section 5.12 or 5.13, the party
discovering such breach shall give prompt written notice to the others;
provided, however, that the failure to give any such notice shall not affect any
obligation of the Servicer. Not later than the last day of the Due Period that
is 90 days after its discovery or receipt of notice of any breach of any such
covenant which materially and adversely affects the interests of the
Certificateholders or the Trustee in any Loan (including any Liquidated Loan),
the Servicer shall, unless it shall have cured such breach in all material
respects, purchase from the Trust the Loan affected by such breach and pay the
related Repurchase Price. It is understood and agreed that the obligation of the
Servicer to purchase any Loan (including any Liquidated Loan) with respect to
which such a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against the Servicer for such breach
available to the Certificateholders, the Certificate Insurer, or the Trustee on
behalf of the Certificateholders; provided, however, that the Servicer shall
indemnify the Trustee, the Certificate Insurer, and the Certificateholders
against all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
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ARTICLE VI
REPORTS AND TAX MATTERS
-----------------------
SECTION 6.01. Monthly Reports. No later than one Business Day following
each Determination Date, the Servicer shall deliver to the Trustee, the
Certificate Insurer 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 Servicer Termination Event or event that with notice or lapse
of time or both would become a Servicer Termination Event 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, the
Certificate Insurer, or either of the Rating Agencies, furnish the Trustee, the
Certificate Insurer, 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, while the Originator is Servicer, commencing May 1, 2001, and within four
months after the fiscal year end of any successor Servicer, 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 deliver to the
Trustee, the Certificate Insurer and the Rating Agencies 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 and the
Class B Certificates on or before the third Business Day next preceding
each Payment Date.
b. Concurrently with each distribution to Certificateholders, the
Trustee shall, so long as it has received the Monthly Report from the
Servicer, forward or cause to be forwarded by mail to each Holder of a
Class A Certificate and (if the Originator is not the Servicer) the
Originator a statement setting forth the following:
(i) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to interest, separately identifying any
Unpaid Class A Interest Shortfall included in such distribution and
any remaining Unpaid Class A Interest Shortfall after giving effect to
such distribution;
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(ii) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the Class A Formula
Distribution Amount for such Payment Date exceeds the Class A
Distribution Amount for such Payment Date;
(iv) the 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) the Senior Enhancement Percentage;
(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 Loans in foreclosure and REO);
(x) the number and aggregate principal balance of Loans that have
been granted extensions to their payment schedules;
(xi) the Average Ninety-Day Delinquency Ratio Test (as set forth
in Exhibit M hereto);
(xii) the Cumulative Realized Losses Test (as set forth in
Exhibit M hereto);
(xiii) the number of Liquidated Loans, their aggregate unpaid
principal balance (separately identifying the unpaid principal balance
of all REO), and the Net Liquidation Loss on such Loans;
(xiv) the Pre-Funded Amount for such Payment Date;
(xv) the amount of any payment by the Certificate Insurer under
the Certificate Insurance Policy and any reimbursement paid to the
Certificate Insurer; and
(xvi) if a Trigger Event, Servicer Termination Trigger Event or
an Overcollateralization Trigger Event exists, an explanation of the
relevant facts;
(xvii) the Overcollateralization Amount, after giving effect to
distributions of principal on such Payment Date, and the Target
Overcollateralization Amount; and
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(xviii) the Prepayment Charges collected or waived and, if
waived, an identification of the related Loan.
The Trustee and the Servicer shall, if any Certificateholder, Class C
Certificateholder or Underwriter inquires by telephone, provide the
information contained in the most recent Monthly Report.
In the case of information furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount per Class A
Certificate with a 1% Percentage Interest or per $1,000 denomination of
Class A Certificate.
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. [RESERVED]
d. [RESERVED]
e. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
monthly statements forwarded to the Holders of Class A 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;
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(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)(8)(ii); and
(vi) the information set forth in clauses (v) through (xviii) 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.
f. On each Payment Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
monthly statements forwarded to the Holders of Class A and Class B-1
Certificates on such Payment Date. The Servicer shall also furnish to the
Trustee, which shall forward such information to the Class B-2
Certificateholders as part of their monthly statement, the following
information:
(i) the amount of such distribution to Holders of Class B-2
Certificates allocable to interest, separately identifying any Unpaid
Class B-2 Interest Shortfall included in such distribution and any
remaining Unpaid Class B-2 Interest Shortfall after giving effect to
such distribution;
(ii) the amount of such distribution to Holders of Class B-2
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein;
(iii) the amount, if any, by which the sum of the Class B-2
Formula Distribution Amount and the Class B-2 Liquidation Loss
Principal Amount, if any, for such Payment Date exceeds the Class B-2
Distribution Amount for such Payment Date;
(iv) the Class B-2 Principal Balance after giving effect to the
distribution of principal on such Payment Date;
(v) the Unpaid Class B-2 Liquidation Loss Interest Shortfall
after giving effect to any distribution on such Payment Date pursuant
to Section 8.04(b)(10)(ii).
(vi) the information set forth in clauses (v) through (xviii) of
Section 6.05(b).
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In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate
with a 1% Percentage Interest or per $1,000 denomination of Class B-2
Certificate.
Within 75 days after the end of each calendar year, the Certificate
Registrar shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-2 Certificate a
statement containing the applicable distribution information provided
pursuant to this Section aggregated for such calendar year or applicable
portion thereof during which such Person was the Holder of a Class B-2
Certificate. Such obligation of the Certificate Registrar shall be deemed
to have been satisfied to the extent that substantially comparable
information shall be provided by the Certificate Registrar pursuant to any
requirements of the Code as from time to time in force.
g. Copies of all reports and statements provided to the Trustee for
the Certificateholders shall also be provided to the Rating Agencies and
the Class C Certificateholder.
SECTION 6.06. Payment of Taxes. The Servicer shall be responsible for and
agrees to prepare, make and timely file all federal, state, local or other tax
returns, information statements and other returns and documents of every kind
and nature whatsoever required to be made or filed by or on behalf of the Trust
pursuant to the Code and other applicable tax laws and regulations. Each such
return, statement and document shall, to the extent required by the Code or
other applicable law and at the request of the Servicer, be signed on behalf of
the Trust by the Trustee. The Trustee shall have no responsibility whatsoever
for the accuracy or completeness of any such return, statement or document. The
Servicer agrees to indemnify the Trustee and hold it harmless for, from, against
and in respect to any and all liability, loss, damage and expense which may be
incurred by the Trustee based upon or as a result of the Trustee's execution of
any and all such tax returns, statements and documents. The Servicer, if and for
so long as it is a Class C Certificateholder, shall be designated the "tax
matters person" on behalf of the Trust in the same manner as a partnership may
designate a "tax matters partner," as such term is defined in Section 6231(a)(7)
of the Code. To the extent permitted by the REMIC Provisions, any subsequent
holder of the Class C Certificate, by acceptance thereof, irrevocably designates
and appoints the Servicer as its agent to perform the responsibilities of the
"tax matters person" on behalf of the Trust if, and during such time as, the
Servicer is not the holder of the Class C Certificate. The Servicer may, at its
expense, if the Originator or a subsidiary or affiliate is the Servicer, or as
subject to reimbursement in Section 7.03 and 8.04(a)(iii) if a successor
Servicer, 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
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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 2.05 or 3.07, or a failure by
any Servicer to comply with the provisions of this Section 6.06, the Trustee,
the Originator or such Servicer, as the case may be, shall indemnify the Class C
Certificateholder for the payment of any such tax or charge. The Trustee shall
be entitled to withhold from amounts otherwise distributable to the Class C
Certificateholder any taxes or charges payable by the Class C Certificateholder
hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Originator shall provide to the Internal
Revenue Service and the persons specified in Sections 860(E)(e)(5) and (6) of
the Code all information necessary for the application of Section 860E(e) and
any other applicable provision of the Code with respect to the transfer of the
Class C Certificate to such disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Originator shall, upon the written request of
persons designated in Section 860E(e)(5) of the Code, furnish to such requesting
party and the Internal Revenue Service information sufficient to compute the
present value of anticipated excess inclusions within 60 days of the receipt of
such written request.
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ARTICLE VII
SERVICE TRANSFER
----------------
SECTION 7.01. Servicer Termination Event.
a. Subject to Section 7.08, the Certificate Insurer or the Trustee
(with the prior written consent of the Certificate Insurer, or, except in
the case of item (vi) below, the Certificateholders, with the consent of
the Certificate Insurer, may remove the Servicer (such removal being herein
called a "Service Transfer") upon the occurrence of any of the following
events (each a "Servicer Termination Event"):
(i) The Servicer or the Seller shall (A) apply for or consent to
the appointment of a receiver, trustee, liquidator or custodian or
similar entity with respect to itself or its property, (B) admit in
writing its inability to pay its debts generally as they become due,
(C) make a general assignment for the benefit of creditors, (D) be
adjudicated a bankrupt or insolvent, (E) commence a voluntary case
under the federal bankruptcy laws of the United States of America or
file a voluntary petition or answer seeking reorganization, an
arrangement with creditors or an order for relief or seeking to take
advantage of any insolvency law or file an answer admitting the
material allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding or (F) take corporate action
for the purpose of effecting any of the foregoing; or
(ii) If without the application, approval or consent of the
Servicer or the Seller, as applicable, a proceeding shall be
instituted in any court of competent jurisdiction, under any law
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking in respect of the Servicer or the Seller an order for
relief or an adjudication in bankruptcy, reorganization, dissolution,
winding up, liquidation, a composition or arrangement with creditors,
a readjustment of debts, the appointment of a trustee, receiver,
liquidator or custodian or similar entity with respect to the Servicer
or of all or any substantial part of its assets, or other like relief
in respect thereof under any bankruptcy or insolvency law, and, if
such proceeding is being contested by the Servicer in good faith, the
same shall (A) result in the entry of an order for relief or any such
adjudication or appointment or (B) continue undismissed or pending and
unstayed for any period of sixty (60) consecutive days; or
(iii) The Servicer shall fail to perform any one or more of its
material obligations hereunder and shall continue in default thereof
for a period of thirty (30) days (one (1) Business Day in the case of
a delay in making a payment required of the Servicer under this
Agreement), or the Servicer shall fail to deliver the Monthly Report
on any Determination Date, after the earlier of (A) actual knowledge
of an officer of the Servicer or (B) receipt of notice, except with
respect to the Servicer's failure to make a payment required of it
under this Agreement, from the Trustee or the Certificate Insurer of
said failure; provided, however, that if the Servicer can demonstrate
to the reasonable satisfaction of the Certificate Insurer that it is
diligently pursuing remedial action, then the cure period may be
extended with the written approval of the Certificate Insurer; or
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(iv) The Servicer shall fail to cure any breach of any of its
representations and warranties set forth in Section 5.13 which
materially and adversely affects the interests of the
Certificateholders or the Certificate Insurer for a period of sixty
(60) days after the earlier of the Servicer's discovery or receipt of
notice thereof; provided, however, that if the Servicer can
demonstrate to the reasonable satisfaction of the Certificate Insurer
that it is diligently pursuing remedial action, then the cure period
may be extended with the written approval of the Certificate Insurer;
or
(v) The merger, consolidation or other combination of the
Servicer with or into any other entity, unless (A) the Servicer or an
Affiliate of the Servicer is the surviving entity of such combination
or (B) the surviving entity (I) is servicing at least $300,000,000 of
home equity loans that are similar to the Loans, (II) has equity of
not less than $10,000,000 (as determined in accordance with generally
acceptable accounting principles), (III) is consented to by the
Certificate Insurer (such consent not to be unreasonably withheld) and
(IV) agrees to assume the Servicer's obligations thereunder; or
(vi) The occurrence of a Servicer Termination Trigger Event or an
Event of Default under the Insurance Agreement; or
(vii) Failure of the Certificate Insurer to renew quarterly
appointment of the Servicer under Section 5.11; or
(viii) Election by the Certificate Insurer to remove any
successor Servicer.
b. [RESERVED]
c. The Servicer shall not resign from the obligations and duties
hereby imposed on it, except upon determination that its duties hereunder
are no longer permissible under applicable law or are in material conflict
by reason of applicable law with any other activities carried on by it (the
other activities of the Servicer so causing such a conflict being of a type
and nature carried on by the Servicer at the date of this Agreement) and
provided that the Certificate Insurer shall not have waived compliance with
the servicing duties giving rise to such impermissibility or conflict. Any
such determination permitting the resignation of the Servicer shall be
evidenced by an Opinion of Counsel acceptable to the Trustee and the
Certificate Insurer at the expense of the Servicer to such effect which
shall be delivered to the Trustee and the Certificate Insurer.
d. Notwithstanding the provisions of Section 7.01(c), 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.
e. Notwithstanding any other provision in this Agreement, no removal
or resignation of the Servicer shall become effective until a successor
Servicer acceptable to the Certificate
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Insurer (which successor Servicer may be the Backup Servicer) shall have
assumed the Servicer's responsibilities and obligations in accordance with
this Section.
f. Upon removal or resignation of the Servicer, or expiration of its
Term of Service without renewal, the Servicer at its own expense also shall
promptly deliver or cause to be delivered to a successor Servicer all the
books and records (including, without limitation, records kept in
electronic form) that the Servicer has maintained for the Loans, including
all tax bills, assessment notices, insurance premium notices and all other
documents as well as all original documents then in the Servicer's
possession.
g. Any collections then being held by the Servicer prior to its
removal and any collections received by the Servicer after removal or
resignation shall be endorsed by it to the Trustee and remitted directly
and immediately to the successor Servicer.
h. Upon removal or resignation of the Servicer, or expiration of its
Term of Service, without renewal, the Trustee shall, at the direction of
the Certificate Insurer, and may, if a Certificate Insurer Default exists
and is continuing or the Certificate Insurer's rights have been terminated
as described in Section 12.14(b), (i) solicit bids for a successor servicer
as described below or (ii) appoint the Backup Servicer (or such other
Person as may be designated by the Certificate Insurer) as Servicer. If the
Trustee solicits bids for a successor Servicer, the Trustee agrees, if
requested by the Certificate Insurer, to act as Backup Servicer during the
solicitation process and to assume all duties of the Servicer (except as
otherwise provided in this Agreement). The Trustee shall, if it is unable
to obtain a qualifying bid and is prevented by law from acting as Servicer,
appoint, or petition a court of competent jurisdiction to appoint, any
housing and home finance institution, bank or mortgage servicing
institution which has been designated as an approved seller-servicer by
Fannie Mae or Freddie Mac for first and second lien home equity loans and
having equity of not less than $15,000,000 (or such lower level as may be
acceptable to the Certificate Insurer), as determined in accordance with
generally accepted accounting principles and acceptable to the Certificate
Insurer 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. The compensation of any successor Servicer so appointed shall be
the Monthly Servicing Fee.
i. In the event the Trustee solicits bids as provided above, the
Trustee shall solicit, by public announcement, bids from housing and home
finance institutions, banks and mortgage servicing institutions meeting the
qualifications set forth above. Such public announcement shall specify that
the successor Servicer shall be entitled to servicing compensation in
accordance with clause (h) above, together with the other servicing
compensation in the form of Ancillary Income as provided in Section 5.05.
Within thirty days after any such public announcement, the Trustee shall
negotiate and effect the sale, transfer and assignment of the servicing
rights and responsibilities hereunder to the qualified party approved by
the Certificate Insurer submitting the highest satisfactory bid as to the
price it will pay to obtain servicing. The Trustee shall deduct from any
sum received by the Trustee from the successor to the Servicer in respect
of such sale, transfer and assignment all costs and expenses of any public
announcement and of any sale, transfer and assignment of the servicing
rights and responsibilities hereunder. After such deductions, the remainder
of such sum less any amounts due the Trustee or the Trust from the
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Servicer shall be paid by the Trustee to the Servicer at the time of such
sale, transfer and assignment to the Servicer's successor.
j. The Trustee and such successor Servicer shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any
such succession, including the notification to all Obligors of the transfer
of servicing. The Servicer agrees to cooperate with the Trustee, the
Certificate Insurer and any successor Servicer in effecting the termination
of the Servicer's servicing responsibilities and rights hereunder and shall
promptly provide such successor Servicer all documents and records
reasonably requested by it to enable it to assume the Servicer's functions
hereunder and shall promptly also transfer to the Trustee or such successor
Servicer, as applicable, all amounts which then have been or should have
been deposited in the Certificate Account by the Servicer or which are
thereafter received with respect to the Loans. No successor Servicer shall
be held liable by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof caused by (i) the failure
of the Servicer to deliver, or any delay in delivering, cash, documents or
records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer. If the Servicer resigns or is
replaced hereunder, or its Term of Service expires without renewal, the
Servicer agrees to reimburse the Trust, the Certificateholders and the
Certificate Insurer for the costs and expenses associated with the transfer
of servicing to the replacement Servicer.
k. Any successor Servicer, upon assuming the duties of Servicer
hereunder, shall at the expense of the previous Servicer immediately record
all assignments of Loans not previously recorded in the name of the Trustee
as required by Section 4.01(b).
SECTION 7.02. Backup Servicer.
a. Upon appointment of the Backup Servicer as Servicer, pursuant to
Section 7.01(h) hereof, the Backup Servicer shall be the successor 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 by the terms
and provisions hereof. The appointment of the Backup Servicer as successor
Servicer shall not affect any liability of the predecessor Servicer that
may have arisen under this Agreement prior to its termination as Servicer,
nor shall any successor Servicer be liable for any acts or omissions of the
predecessor Servicer or for any breach by such Servicer of any of its
representations or warranties contained herein or in any Transaction
Document.
b. The Backup Servicer shall only be responsible to perform those
duties specifically imposed upon it as Backup Servicer by the provisions
hereof and in the Backup Servicer Agreement.
SECTION 7.03. Third Party Fees. The Servicer, so long as the Servicer is
not the Originator or any subsidiary or affiliate of the Originator, shall be
reimbursed for any third-party costs incurred by it pursuant to Sections 6.06 or
11.06.
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SECTION 7.04. Notification to Certificateholders and Class C
Certificateholder.
a. Promptly following the occurrence of any Servicer Termination
Event, the Servicer shall give written notice thereof to the Trustee, the
Rating Agencies, the Certificate Insurer, the Certificateholders and the
Class C Certificateholder at their respective addresses appearing on the
Certificate Register.
b. Within 10 days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall
give written notice thereof to the Rating Agencies, the Certificateholders
and 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 7.01, if the Certificate Account shall be maintained with
the Servicer and a Servicer Termination Event 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 Servicer Termination Event,
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.
SECTION 7.07. Limits on Liability. Except as provided in Article X, the
Servicer will be liable to the Trust, the Trustee, the Certificate Insurer and
the Certificateholders and Class C Certificateholder under this Agreement only
to the extent of the obligations specifically undertaken by the Servicer under
this Agreement and will have no other obligations or liabilities hereunder.
Except as provided in Article X, neither the Servicer nor any of its directors,
officers, employees or agents will have any liability to the Trustee, the
Certificateholders and Class C
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Certificateholder (except as explicitly provided in this Agreement) for any
action taken, or for refraining from taking any action, pursuant to this
Agreement, other than any liability that would otherwise be imposed by reason of
the Servicer's breach of this Agreement or willful misfeasance, bad faith or
negligence (including errors in judgment) in the performance of its duties, or
by reason of reckless disregard of obligations and duties under this Agreement
or any violation of law.
SECTION 7.08. Waiver of Past Defaults. The Certificate Insurer (or, if a
Certificate Insurer Default shall have occurred and be continuing, a Certificate
Majority of each Class) may, on behalf of all Holders of Certificates, waive any
default by the Servicer in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Termination Event arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
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ARTICLE VIII
PAYMENTS
--------
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a
Certificate or Class C Certificate as of a Record Date shall be paid on the
next succeeding Payment Date by check mailed to such Certificateholder or
Class C Certificateholder at the address for such Certificateholder or
Class C Certificateholder appearing on the Certificate Register (or, if
such Certificateholder holds Certificates of a Class with an aggregate
Percentage Interest of at least 5% of such Class and so requests, by wire
transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date), the sum equal to such Certificateholder's or
Class C Certificateholder's Percentage Interest of the Class A-1
Distribution Amount, Class A-2 Distribution Amount, Class A-3 Distribution
Amount, Class A-4 Distribution Amount, Class A-5 Distribution Amount, the
Class B-1 Distribution Amount, the Class B-2 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.
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SECTION 8.02. Advances.
a. Not later than one Business Day following the Determination Date,
the Servicer shall advance all Delinquent Payments, including insurance and
taxes due, 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 with respect to any Loan only to the extent that the
Servicer, in its sole discretion, expects to be able to recover such
Advances from funds subsequently collected with respect to such Loan. The
monthly Advance for a Balloon Loan with a Delinquent Payment is equal to
the assumed interest portion of the monthly payment that would have been
due during the related Due Period based on the original principal
amortization schedule for the Balloon Loan. 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
payments on the related Loan in accordance with Section 8.04(a) and
8.04(b)(14).
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 for Maintenance Expenses,
Advances made as provided in Section 8.02(a), and amounts described in
Section 7.03 and to reimburse the Trustee for Trustee Advances made as
provided in Section 11.15, in each case from funds collected in
respect of the related Loan;
(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.
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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 the Servicer that
portion of the Monthly Servicing Fee described in clause (a) of the
definition of the Monthly Servicing Fee;
(2) the Premium Amount to the Certificate Insurer, the Backup
Servicer Fees to the Backup Servicer and any compensation owed to it
under Section 7.03 to the Servicer;
(3) the Class A Formula Interest Distribution Amount to the Class
A Certificateholders as follows:
(i) the amount in clause (a)(i) of the definition of Class A
Formula Distribution Amount to the Class A-1 Certificateholder;
the amount in clause (a)(ii) of the definition of Class A Formula
Distribution Amount to the Class A-2 Certificateholders; the
amount in clause (a)(iii) of the definition of Class A Formula
Distribution Amount to the Class A-3 Certificateholders; the
amount in clause (a)(iv) of the definition of Class A Formula
Distribution Amount to the Class A-4 Certificateholders; the
amount in clause (a)(v) of the definition of Class A Formula
Distribution Amount to the Class A-5 Certificateholders; or, if
the Amount Available is less than the amount necessary to pay all
Class A Formula Interest Distribution Amounts, to each Class of
Class A Certificates pro rata in accordance with its respective
entitlement to interest; and
(ii) to each Class of Class A Certificates the amount, if
any, of the Unpaid Class A Interest Shortfall of such Class or,
if the remaining Amount Available is less than the amount
necessary to pay all Unpaid Class A Interest Shortfalls, pro rata
to each Class of Class A Certificates based on the Unpaid Class A
Interest Shortfall of each such Class;
(4) to the Class B-1 Certificateholders the Class B-1 Formula
Interest Distribution Amount;
(5) to the Class B-2 Certificateholders the Class B-2 Formula
Interest Distribution Amount;
(6) to the Class A Certificateholders in respect of principal as
follows:
(i) if there is a Class A Principal Deficiency Amount for
such Payment Date, the remaining Amount Available pro rata to
each Class of Class A Certificates based on the Class Principal
Balance of each Class; and
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(ii) if there is no Class A Principal Deficiency Amount for
such Payment Date, the remaining Amount Available up to the Class
A Formula Principal Distribution Amount as follows:
(A) if the remaining Amount Available is less than the
Class A Formula Principal Distribution Amount, then pro rata
to each Class of Class A Certificates based upon the amounts
that would have been distributed pursuant to clause (B),
below, had the remaining Amount Available been at least
equal to the Class A Formula Principal Distribution Amount;
(B) if the remaining Amount Available is not less than
the Class A Formula Principal Distribution Amount, then
(a) to the Class A-1 Certificateholders, any
remaining Class A Formula Principal Distribution
Amount, but in no event more than is necessary to
reduce the Class A-1 Principal Balance to zero;
(b) to the Class A-2 Certificateholders, any
remaining Class A Formula Principal Distribution
Amount, but in no event more than is necessary to
reduce the Class A-2 Principal Balance to zero;
(c) to the Class A-3 Certificateholders, any
remaining Class A Formula Principal Distribution
Amount, but in no event more than is necessary to
reduce the Class A-3 Principal Balance to zero;
(d) to the Class A-4 Certificateholders, any
remaining Class A Formula Principal Distribution
Amount, but in no event more than is necessary to
reduce the Class A-4 Principal Balance to zero; and
(e) to the Class A-5 Certificateholders, any
remaining Class A Formula Principal Distribution
Amount, but in no event more than is necessary to
reduce the Class A-5 Principal Balance to zero;
(7) to the Certificate Insurer the Reimbursement Amount;
(8) to the Class B-1 Certificateholders:
(i) the Class B-1 Formula Principal Distribution Amount; and
(ii) the Class B-1 Formula Liquidation Loss Interest Amount;
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(9) to the Servicer (if not Conseco Finance Corp. or a
wholly-owned subsidiary), any portion of the Monthly Servicing Fee in
excess of 1/12 of the product of 0.50% and the Pool Scheduled
Principal Balance, including any accrued and unpaid Monthly Servicing
Fee;
(10) to the Class B-2 Certificateholders:
(i) the Class B-2 Formula Principal Distribution Amount; and
(ii) the Class B-2 Formula Liquidation Loss Interest Amount;
(11) if the Payment Date is on or after the July 2001 Payment
Date, to the Class A Certificateholders in the order of priority
described in clause 6(ii)(B) of Section 8.04(b) in respect of
principal, and thereafter to the Class B-1 Certificateholders in
respect of principal, the amount, if any, by which the Target
Overcollateralization Amount for such Payment Date exceeds the
Overcollateralization Amount for such Payment Date, but in no case to
the Certificateholders of any Class in excess of the Class Principal
Balance of such Class;
(12) to the Servicer, if Conseco Finance Corp. or a wholly owned
subsidiary of Conseco Finance Corp. is the Servicer, the Monthly
Servicing Fee;
(13) if the Payment Date is before the July 2001 Payment Date, to
the Class A Certificateholders in the order of priority described in
clause 6(ii)(B) of Section 8.04(b) in respect of principal, and
thereafter to the Class B-1 Certificateholders in respect of
principal, the amount, if any, by which the Target
Overcollateralization Amount for such Payment Date exceeds the
Overcollaterization Amount for such Payment Date, but in no case to
the Certificateholders of any Class in excess of the Class Principal
Balance of such Class;
(14) the Servicer or the Trustee, as applicable, in reimbursement
for any unreimbursed Advance made with respect to a Loan in respect of
current or prior Payment Dates to the extent determined by the
Servicer to be not recoverable from payments on the related Loan, or
to the Servicer in reimbursement for unreimbursed Liquidation Expenses
or Maintenance Expenses incurred by the Servicer as permitted by
Section 5.06 or 5.08;
(15) if such Payment Date is on or after the Additional Principal
Entitlement Date, then, pursuant to Section 8.06(f), to the
Certificateholders as payment of principal in the following order of
priority, and in no case in excess of the Class Principal Balance of
any Class of Certificates:
(i) first to the Class A Certificateholders, pro rata based
upon the Class Principal Balance of each outstanding Class of
Class A Certificates until paid in full;
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(ii) then to the Class B-1 and Class B-2 Certificateholders,
pro rata based on the Class Principal Balance of each such Class,
until paid in full;
(16) to reimburse the Class C Certificateholder for expenses
incurred by and reimbursable to it pursuant to Section 10.06; and
(17) to the Class C Certificateholder the remainder, if any, of
the Amount Available.
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-1 Certificates and any amount withdrawn from the
Capitalized Interest Account and deposited in the Certificate Account shall
be solely as described in Section 8.07, and Insured Payments shall be
distributed solely to the Class A Certificateholder solely to pay the
Scheduled Payments.
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 2.06 or 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 (y) the fair market value of such acquired
property (as reasonably determined
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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 B-1 Formula Interest
Distribution Amount, the Class B-1 Formula Liquidation Loss Interest
Distribution Amount and the Class B-2 Formula Interest Distribution
Amount due on the Payment Date occurring in the calendar month
following such purchase date (less any amounts on deposit in the
Certificate Account on such purchase date and representing payments of
interest in respect of the Loans at a rate per annum equal to the
Weighted Average Pass-Through Rate).
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,
(iv) the Trustee not having accepted a qualifying bid for the
Loans pursuant to subsection (e) below; and
(v) the payment of all amounts due and owing to the Certificate
Insurer, the Backup Servicer and the Trustee.
If such option is exercised, the Class C Certificateholder shall provide to
the Trustee and the Certificate Insurer (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 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).
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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 and the Certificate Insurer 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 (as defined in
Section 8.06(a)) and (ii) the fair market value of the Loans and related
property (such amount being referred to as the "Minimum Auction Price"). If
less than two bids are received or the highest bid after the resolicitation
process is completed is not equal to or in excess of the Minimum Auction
Price, the Trustee shall not consummate such sale. If a bid meeting the
Minimum Purchase Price is received, then the Trustee may, and if so
requested by the Class C Certificateholder shall, consult with a financial
advisor, which may be an underwriter of the Certificates, to determine if
the fair market value of the Loans and related property has been offered.
If the first auction conducted by the Trustee does not produce any bid
at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Payment Date occurring approximately three months after
the Auction Date for the failed first auction, commence another auction in
accordance with the requirements of this subsection (e). If such second
auction does not produce any bid at least equal to the Minimum Auction
Price, then the Trustee shall, beginning on the Payment Date occurring
approximately three months after the Auction Date for the failed second
auction, commence another auction in accordance with the requirements of
this subsection (e), and shall continue to conduct similar auctions
approximately every three months thereafter until the earliest of (i)
delivery by the Class C Certificateholder or its assignee of notice of
exercise of its purchase option under subsection (a), (ii) receipt by the
Trustee of a bid meeting the conditions specified in the preceding
paragraph, or (iii) the Payment Date on which the principal balance of all
the Loans is reduced to zero.
If the Trustee receives a bid meeting the conditions specified in this
subsection (e), then the Trustee's written acceptance of such bid shall
constitute a plan of complete liquidation within the meaning of Section
860F of the Code, and the Trustee shall release to the winning bidder, upon
payment of the bid purchase price, the Loan Files pertaining to the Loans
being purchased.
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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 that portion of the
Additional Principal Distribution Amount described in Section 8.04(b)(15)
in the order of priority described in Section 8.04(b).
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 $3,568,930.02 received from the
Seller pursuant to Section 2.02(l). 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-D." On the Payment Date occurring in each of July
2000, August 2000 and September 2000, if the Monthly Report for such
Payment Date indicates that the Amount Available (after payment of the
amount specified in clauses (1) and (2) 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 B-1 Formula Interest Distribution Amount and the Class B-2 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 B-1 Formula Interest Distribution Amount
and third to pay any deficiency in the Amount Available to pay the Class
B-2 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 September 2000 shall be distributed to the Seller. After
such date no further amounts shall be deposited in or withdrawn from the
Capitalized Interest Account. Any losses on such investments shall be
deposited in the Capitalized Interest Account by the Seller out of its own
funds immediately as realized.
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SECTION 8.08. Pre-Funding Account.
a. On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit in the Pre- Funding Account the amounts received
from the Seller pursuant to Section 2.02(l). 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. Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall withdraw
an amount equal to 100% of the Cut-off Date Principal Balance of each
Subsequent 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. Undelivered Loan Account.
a. On or before the Closing Date, the Trustee shall establish the
Undelivered Loan 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). Funds deposited in the Undelivered Loan
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
Undelivered Loan Account the amount specified in Section 2.02(l). Amounts
on deposit in such account shall be withdrawn by the Trustee as follows:
(i) If the Originator delivers the related Loan for an
Undelivered Loan to the Trustee on or before July 28, 2000, the
Trustee shall withdraw an amount equal to 100%
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of the Cut-off Date Principal Balance of such Loan and pay such amount
to or upon the order of the Originator.
(ii) The Originator shall give the Trustee telephonic notice of
its intended delivery of such Loans. The Trustee will use reasonable
efforts to process the Loans and remit any amount payable for them to
the Originator in a timely manner.
(iii) On August 15, 2000, the Trustee shall deposit into the
Certificate Account any amounts remaining in the Undelivered Loan
Account. Any amount so deposited shall constitute the payment of the
Repurchase Price for the related Undelivered Loan(s).
c. The Undelivered Loan 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 Undelivered Loan Account. The Seller shall be the beneficial
owner of the Undelivered Loan Account, subject to the foregoing power of
the Trustee to transfer amounts in the Undelivered Loan Account to the
Certificate Account. Funds in the Undelivered Loan 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
Undelivered Loan Account shall be taxable to the Seller. The Trustee shall
release to the Seller all investment earnings in the Undelivered Loan
Account on the August 2000 Payment Date.
SECTION 8.10. Claims Upon Policy.
a. If any Monthly Report delivered to the Trustee pursuant to Section
6.01 discloses a Shortfall, the Trustee shall, promptly on the Business Day
it receives the Monthly Report, give notice to the Certificate Insurer of
the amount of the Shortfall. In the event that a payment becomes due
pursuant to the terms of the Certificate Insurance Policy, the Trustee
shall submit a Notice (in the form attached to such Certificate Insurance
Policy) in accordance with the terms of the Certificate Insurance Policy.
b. The Trustee shall establish a separate special purpose trust
account for the benefit of the Holders of the Class A Certificates and the
Certificate Insurer (the "Policy Payments Account") over which the Trustee
shall have exclusive control and sole right of withdrawal. Amounts paid
under the Certificate Insurance Policy shall be deposited in the Policy
Payments Account and transferred to the Certificate Account in accordance
with the next succeeding paragraph and disbursed by the Trustee to Holders
of the Class A Certificates in accordance with Section 8.04(b). It shall
not be necessary for such payments to be made by checks or wire transfers
separate from the checks or wire transfers used to pay the Insured Payments
with other funds available to make such payment. However, the amount of any
payment of principal of or interest on the Class A Certificates to be paid
from funds transferred from the Policy Payments Account shall be noted as
provided in paragraph (c) below and in the statement to be furnished to
Class A Certificateholders pursuant to Section 6.05. Funds held in the
Policy Payments Account shall not be invested by the Trustee.
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On any Payment Date with respect to which a claim has been made under
the Certificate Insurance Policy, the amount of funds received by the
Trustee as a result of any claim under the Certificate Insurance Policy, to
the extent required to make the Scheduled Payments on such Payment Date,
shall be withdrawn from the Policy Payments Account and deposited in the
Certificate Account and applied by the Trustee, together with the other
funds to be withdrawn from the Certificate Account, directly to the payment
in full of the Scheduled Payments due on the Class A Certificates. Funds
received by the Trustee as a result of any claim under the Certificate
Insurance Policy shall be deposited by the Trustee in the Policy Payments
Account and used solely for payment to the Holders of the Class A
Certificates and may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Seller, the Trustee or the Trust. Any
funds remaining in the Policy Payments Account on the first Business Day
following a Payment Date shall be remitted to the Certificate Insurer,
pursuant to the instructions of the Certificate Insurer, by the end of such
Business Day.
c. The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Class A Certificate from
moneys received under the Certificate Insurance Policy. The Certificate
Insurer shall have the right to inspect such records at reasonable times
during normal business hours upon one Business Day's prior notice to the
Trustee.
d. The Trustee shall promptly notify the Certificate Insurer and the
Fiscal Agent (as defined in the Certificate Insurance Policy) of any
proceeding or the institution of any action, of which an authorized officer
of the Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership
or similar law (a "Preference Claim") of any distribution made with respect
to the Certificates. Each Holder of a Class A Certificate by its purchase
of such Certificate, the Servicer and the Trustee hereby agree that, the
Certificate Insurer (so long as no Certificate Insurer Default exists) may
at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim,
including without limitation, (i) the direction of any appeal of any order
relating to such Preference Claim and (ii) the posting of any surety,
supersede as or performance bond pending any such appeal. In addition and
without limitation of the foregoing, the Certificate Insurer shall be
subrogated to the rights of the Servicer, the Trustee and each Holder of a
Class A Certificate in the conduct of any such Preference Claim, including,
without limitation, all rights of any party to an adversary proceeding
action with respect to any court order issued in connection with any such
Preference Claim.
e. The Trustee shall, at the time it provides notice to the
Certificate Insurer, notify the Class A Certificateholders by mail that, in
the event any such Certificateholder's Scheduled Payment is avoided as a
preferential transfer, such Certificateholder will be entitled to payment
pursuant to the terms of the Certificate Insurance Policy, a copy of which
shall be made available through the Trustee, or the Fiscal Agent, if any,
and the Trustee shall furnish to the Certificate Insurer or its Fiscal
Agent, if any, its records evidencing the payments of principal of and
interest on the Class A Certificates, if any, which have been made by the
Trustee and subsequently recovered from Class A Certificateholders, and the
dates on which such payments were made.
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f. The Trustee shall, upon retirement of the Class A Certificates,
furnish to the Certificate Insurer a notice of such retirement, and, upon
the retirement of the Class A Certificates and the expiration of the term
of the Certificate Insurance Policy, surrender the Certificate Insurance
Policy to the Certificate Insurer for cancellation.
SECTION 8.11. Effect of Payments by the Certificate Insurer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect
to principal of or interest on any of the Class A Certificates which is made
with moneys received pursuant to the terms of the Certificate Insurance Policy
shall not be considered payment of such Certificates from the Trust and shall
not result in the payment of or the provision for the payment of the principal
of or interest on such Certificates within the meaning of Section 8.04(b). The
Servicer acknowledges, and each Holder by its acceptance of a Class A
Certificate agrees, that without the need for any further action on the part of
the Certificate Insurer, the Seller, the Servicer, the Trustee or the Paying
Agent (a) to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of principal of or interest on any Class A Certificates
to the Holder of such Class A Certificates, the Certificate Insurer will be
fully subrogated to the rights of such Certificateholders to receive such
principal and interest from the Trust and (b) the Certificate Insurer shall be
paid such principal and interest but only from the sources and in the manner
provided herein for the payment of such principal and interest.
The Trustee and the Servicer shall cooperate in all respects with any
reasonable request by the Certificate Insurer for action to preserve or enforce
the Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Class A Certificateholders
as otherwise set forth therein.
SECTION 8.12. Notices to the Certificate Insurer.
All notices, statements, reports, certificates or opinions required by this
Agreement to be sent to any other party hereto or to any of the
Certificateholders shall also be sent to the Certificate Insurer.
SECTION 8.13. Rights of the Certificate Insurer To Exercise Rights of
Certificateholders.
By accepting its Certificate, each Class A Certificateholder agrees that
unless a Certificate Insurer Default has occurred and is continuing and until
payment in full of the Class A Certificates and all amounts owing to the
Certificate Insurer under the Insurance Agreement, the Certificate Insurer shall
have the right to exercise all rights of the Class A Certificateholders as
specified under this Agreement without any further consent of the Class A
Certificateholders.
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ARTICLE IX
THE CERTIFICATES AND THE CLASS C CERTIFICATE
--------------------------------------------
SECTION 9.01. The Certificates and the Class C Certificate. The Class A and
Class B Certificates and the Class C Certificate shall be substantially in the
forms set forth in Exhibits A, C, 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 and Class B Certificates shall be evidenced by (i)
one or more Class A-1 Certificates evidencing $356,000,000 in Original Class A-1
Principal Balance, (ii) one or more Class A-2 Certificates evidencing
$74,000,000 in Original Class A-2 Principal Balance, (iii) one or more Class A-3
Certificates evidencing $226,000,000 in Original Class A-3 Principal Balance,
(iv) one or more Class A-4 Certificates evidencing $141,000,000 in Original
Class A-4 Principal Balance, (v) one or more Class A-5 Certificates evidencing
$138,000,000 in Original Class A-5 Principal Balance, (vi) one or more Class B-1
Certificates evidencing $6,000,000 in Original Class B-1 Principal Balance, and
(vii) one or more Class B-2 Certificates evidencing $59,000,000 in Original
Class B-2 Principal Balance, beneficial ownership of such Classes of
Certificates to be held through Book-Entry Certificates in minimum dollar
denominations of $1,000 and integral multiples of $1,000 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
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herein. The Trustee will give prompt written notice to Certificateholders,
the Class C Certificateholder and the Servicer of any change in the
Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class C
Certificate shall be made by the Seller or any other Person unless such
transfer is exempt from the registration requirements of the Securities Act
of 1933 (the "Act"), as amended, and any applicable state securities laws
or is made in accordance with the Act and laws. In the event that any such
transfer is to be made, (A) the Originator may require a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the
Originator that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the Act
and laws or is being made pursuant to the Act and laws, which Opinion of
Counsel shall not be an expense of the Trustee or the Originator, and (B)
the Trustee shall require the transferee to execute an investment letter
substantially in the form of Exhibit K attached hereto, which investment
letter shall not be an expense of the Trustee or the Originator. The Class
C Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Originator and the Certificate
Registrar against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
(2) No transfer of a Class B 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 Certificates that are not Definitive
Certificates, each person acquiring such a Certificate or a 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
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deliver to the Trustee, under penalties of perjury, an affidavit that
such transferee is not a Disqualified Organization, with respect to
which the Trustee shall have no actual knowledge that such affidavit
is false, and the transferor and the proposed transferee shall each
deliver to the Trustee an affidavit with respect to any other
information reasonably required by the Trustee pursuant to the REMIC
Provisions, including, without limitation, information regarding the
transfer of noneconomic residual interests and transfers of any
residual interest to or by a foreign person; provided, however, that,
upon the delivery to the Trustee of an Opinion of Counsel, in form and
substance satisfactory to the Trustee and rendered by Independent
counsel, to the effect that the beneficial ownership of a Class C
Certificate by any Disqualified Organization will not result in the
imposition of federal income tax upon the Trust or any
Certificateholder or Class C Certificateholder or any other person or
otherwise adversely affect the status of the Trust as a REMIC, the
foregoing prohibition on transfers, sales and other dispositions, as
well as the foregoing requirement to deliver a certificate prior to
any registration thereof, shall, with respect to such Disqualified
Organization, terminate. Notwithstanding any transfer, sale or other
disposition of a Class C Certificate, or any interest therein, to a
Disqualified Organization or the registration thereof in the
Certificate Register, such transfer, sale or other disposition and any
registration thereof, unless accompanied by the Opinion of Counsel
described in the preceding sentence, shall be deemed to be void and of
no legal force or effect whatsoever and such Disqualified Organization
shall be deemed not to be a Class C Certificateholder for any purpose
hereunder, including, but not limited to, the receipt of distributions
on a Class C Certificate, and shall be deemed to have no interest
whatsoever in a Class C Certificate. Each Class C Certificateholder,
by his acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this Section 9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance
with the provisions of this Section 9.02(b) shall be deemed to be void
and of no legal force or effect whatsoever and such transferee shall
be deemed not to be the Certificateholder or Class C
Certificateholder, as applicable, for any purpose hereunder,
including, but not limited to, the receipt of distributions on the
Certificate or Class C Certificate, and shall be deemed to have no
interest whatsoever in the Certificate or Class C Certificate.
(5) The Trustee shall give notice to the Rating Agencies promptly
following any transfer, sale or other disposition of a Class C
Certificate.
c. At the option of a Certificateholder or a Class C
Certificateholder, Certificates and the Class C Certificate may be
exchanged for other Certificates or Class C Certificate of 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.
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d. Except as provided in paragraph (e) below, the Book-Entry
Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to another
Depository; (ii) the Depository shall maintain book-entry records with
respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses
from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of such Certificates for purposes
of exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners;
and (vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
e. If (x)(i) the Seller or the Depository advises the Trustee in
writing that the Depository is no longer willing or able properly to
discharge its responsibilities as Depository and (ii) the Trustee or the
Originator is unable to locate a qualified successor or (y) the Originator
at its sole option advises the Trustee in writing that it elects to
terminate the book-entry system through the Depository, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of
any such event and of the availability of definitive, fully registered
Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Certificates by
the Depository, accompanied by registration instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Originator nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Trustee, to the extent applicable with respect to
such Definitive Certificates and the Trustee shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1 Certificate, one Class A-2 Certificate, one Class
A-3 Certificate, one Class A-4 Certificate, one Class A-5 Certificate, one
Class 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,
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respectively. Each such Certificate registered in the name of the
Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the
Trustee or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such
other name as requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein."
g. Each of the Certificates and the Class C Certificate shall be a
"security" for purposes of Article 8, Section 102(a)(15)(8) of the Uniform
Commercial Code and shall be governed by such Article 8 as in effect in the
State of Minnesota from time to time.
SECTION 9.03. No Charge; Disposition of Void Certificates or Class C
Certificate. No service charge shall be made to a Certificateholder or Class C
Certificateholder for any transfer or exchange of a Certificate or a Class C
Certificate, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of a Certificate or a Class C
Certificate. All Certificates and Class C Certificate surrendered for transfer
and exchange shall be disposed of in a manner approved by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates or Class C
Certificate. If (a) any mutilated Certificate or Class C Certificate is
surrendered to the Certificate Registrar, or the Certificate Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate or Class C Certificate, and (b) there is delivered to the
Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate or Class C
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate or Class C Certificate, a new Certificate
or Class C Certificate of like tenor and original denomination. Upon the
issuance of any new Certificate or Class C Certificate under this Section 9.04,
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. Any 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
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of the Servicer, the Seller, the Trustee, the Certificate Registrar, the Paying
Agent or any agent of the Servicer, the Seller, the Trustee, the Paying Agent or
the Certificate Registrar shall be affected by notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' and Class C
Certificateholder's Names and Addresses. The Certificate Registrar will furnish
to the Trustee and the Servicer, within five days after receipt by the
Certificate Registrar of a request therefor from the Trustee in writing, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders and the Class C Certificateholder as of the most
recent Record Date. If Holders of Certificates representing, in the aggregate,
25% or more of the Aggregate Certificate Principal Balance apply in writing to
the Trustee (hereinafter referred to as "Applicants"), and such application
states that the Applicants desire to communicate with other Certificateholders
or the Class C Certificateholder with respect to their rights under this
Agreement or under the Certificates or the Class C Certificate and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders and the Class C Certificateholder
held by the Trustee. If such list is as of a date more than 90 days prior to the
date of receipt of such Applicants' request, the Trustee shall promptly request
from the Certificate Registrar a current list as provided above, and shall
afford such Applicants access to such list promptly upon receipt. Every
Certificateholder and the Class C Certificateholder, by receiving and holding a
Certificate or a Class C Certificate, agrees with the Certificate Registrar and
the Trustee that none of the Originator, the Certificate Registrar or the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders or the Class
C Certificateholder hereunder, regardless of the source from which such
information was derived.
SECTION 9.07. Authenticating Agents. The Trustee may appoint one or more
Authenticating Agents with power to act on its behalf and subject to its
direction in the execution and delivery of the Certificates or the Class C
Certificate. For all purposes of this Agreement, the execution and delivery of
Certificates or the Class C Certificate by the Authenticating Agent pursuant to
this Section shall be deemed to be the execution and delivery of Certificates or
the Class C Certificate "by the Trustee."
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ARTICLE X
INDEMNITIES
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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), the Certificate Insurer 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
Certificate Insurer, 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 Certificate Insurer, 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 Certificate Insurer, 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, the Certificate Insurer 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 Certificate Insurer, 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.
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If the Originator or the Servicer has made any indemnity payments to the Trustee
pursuant to this Article and the Trustee thereafter collects any of such amounts
from others, the Trust will repay such amounts collected to the Originator or
the Servicer, as the case may be, without interest.
SECTION 10.06. REMIC Tax Matters. If a Class C Certificateholder, pursuant
to Section 6.06, pays any taxes or charges imposed upon the Trust 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.
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ARTICLE XI
THE TRUSTEE
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SECTION 11.01. Duties of Trustee. The Trustee, prior to the occurrence of a
Servicer Termination Event 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 a Servicer Termination Event
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 a Servicer Termination Event, and after
the curing of all such Events of Termination which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent facts;
c. The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders representing, in
the aggregate, 25% or more of the Aggregate Certificate Principal Balance
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement; and
d. The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at
the Corporate Trust Office obtains actual knowledge of such event or the
Trustee receives written notice of such
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event from the Servicer or the Certificateholders representing, in the
aggregate, 25% or more of the Aggregate Certificate Principal Balance.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Originator, the Seller or the
Servicer under this Agreement, except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with the terms of this
Agreement. The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it.
SECTION 11.02. Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of a
Servicing Officer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any counsel
for the Originator, the Seller or the Servicer shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by the Trustee hereunder in good faith and in accordance with such
Opinion of Counsel;
c. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation hereunder or in relation hereto, at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
provided, however, that nothing contained herein shall relieve the Trustee
of the obligations, upon the occurrence of a Servicer Termination Event
(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 a Servicer Termination Event and after
the curing of all Events of Termination which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by
Certificateholders representing, in the aggregate, 25% or more of the
Aggregate Certificate Principal Balance; provided, however, that if the
payment within a reasonable
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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. The Certificate Insurer or, if a Certificate Insurer
Default shall have occurred and be continuing, the 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 Certificate Insurer or the
Certificateholders. The Certificate Insurer or, if a Certificate Insurer Default
shall have occurred and be continuing, the 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
Servicer Termination Event hereunder and its consequences, except a default in
respect of a covenant or provision hereof which under Section 12.07(c) cannot be
modified or amended without the consent of all Certificateholders, and upon any
such waiver, such Servicer Termination Event shall cease to exist and shall be
deemed to have been cured for every purpose
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of this Agreement; but no such waiver shall extend to any subsequent or other
Servicer Termination Event 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. If any entity other than
the Originator or a subsidiary or affiliate of the Originator is the Servicer,
the Servicer shall be reimbursed for any costs and expenses incurred by it in
this Section 11.06 pursuant to Sections 8.04(b)(2) and 7.03.
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 and (b) have a long-term deposit rating from Moody's of at least Baa2 or as
shall be otherwise acceptable to Moody's. In case at any time the Trustee shall
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cease to be eligible in accordance with the provisions of this Section 11.07,
the Trustee shall resign immediately in the manner and with the effect specified
in Section 11.08.
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 with the consent of the Certificate Insurer 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 the Certificate Insurer, 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, with the
prior written consent of the Certificate Insurer, by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.08 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.09.
SECTION 11.09. Successor Trustee. Any successor Trustee appointed as
provided in Section 11.08 shall execute, acknowledge and deliver to the
Servicer, the Originator and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The predecessor Trustee shall deliver
or cause to be delivered to the successor Trustee the Loans and the Loan Files
and any related documents and statements held by it hereunder; and, if the Loans
are then held by a Custodian pursuant to a custodial agreement, the predecessor
Trustee and the Custodian shall amend such custodial agreement to make the
successor Trustee the successor to the predecessor Trustee thereunder; and the
Servicer, the Originator and the predecessor Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
11.09 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.07.
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Upon acceptance of appointment by a successor Trustee as provided in this
Section 11.09, the Servicer shall cause notice of the succession of such Trustee
hereunder to be mailed to the Rating Agencies and to each Certificateholder and
the Class C 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;
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;
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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 a Servicer Termination Event
shall have occurred and be continuing, the Trustee alone, with the prior written
consent of the Certificate Insurer, shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 11.07
hereunder and no notice to Certificateholders or the Class C Certificateholder
of the appointment of co-trustee(s) or separate trustee(s) shall be required
under Section 11.09.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 11.13 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such co-trustee or separate trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed (whether as Trustee hereunder or as successor to the
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed by such co-trustee or separate
trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then co-trustees and separate trustees, as
effectively as if given to each of them. Every instrument appointing any
co-trustee or separate trustee shall refer to this Agreement and the conditions
of this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its
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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 payments on the
related Loan in accordance with Section 8.04(a).
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(a).
11-8
<PAGE>
ARTICLE XII
MISCELLANEOUS
-------------
SECTION 12.01. [RESERVED]
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 expiration of
applicable preference periods with respect to the payments made on the
earlier of (a) the Payment Date on which the principal balance of all of
the Loans is reduced to zero (without taking into account payments on the
Certificate Insurance Policy); or (b) the Payment Date occurring in the
month following the sale of the Loans pursuant to Section 8.06; provided,
that in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States
to the Court of St. James, living on the date hereof, and provided,
further, that the Servicer's and the Originator's representations and
warranties and indemnities by the Originator and the Servicer shall survive
termination. Any termination of the Trust must be conducted so as to
qualify as a "qualified liquidation" of the 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
12-1
<PAGE>
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 Certificate Insurer, 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 and one month's interest at the Pass-Through Rate for each Class
of Class A Certificates on the Class Principal Balance, respectively, (ii)
as to the Class B-1 Certificates, the Class B-1 Principal Balance, together
with any Unpaid Class B-1 Interest Shortfall, any Unpaid Class B-1
Liquidation Loss Interest Shortfall and one month's interest at the Class
B-1 Pass-Through Rate on the Class B-1 Principal Balance and (iii) as to
the Class B-2 Certificates, the Class B-2 Principal Balance, together with
any Unpaid Class B-2 Interest Shortfall any Unpaid Class B-2 Liquidation
Loss Interest Shortfall, and one month's interest at the Class B-2
Pass-Through Rate on the Class B-2 Principal Balance; 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.
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
12-2
<PAGE>
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 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
12-3
<PAGE>
Trustee, the Servicer or the Originator in reliance thereon, whether or not
notation of such action is made upon such Certificates or Class C
Certificate.
f. The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 12.06. Assignment or Delegation by Company. Except as specifically
authorized hereunder, and except for its obligations as Servicer which are dealt
with under Article V and Article VII, the Originator may not convey and assign
or delegate any of its rights or obligations hereunder absent the prior written
consent of the Certificate Insurer or, if a Certificate Insurer Default exists,
the 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 12.07. Amendment.
a. This Agreement may be amended from time to time by the Originator,
the Servicer and the Trustee, with the prior written consent of the
Certificate Insurer and 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
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. This Agreement may be amended from time to time by the
Originator, the Servicer and the Trustee, with the prior written consent of
the Certificate Insurer and without the consent of any of the
Certificateholders or the Class C Certificateholder, to provide for such
changes as the Certificate Insurer and Backup Servicer or successor
Servicer may require in connection with the succession of a successor
Servicer or the Backup Servicer provided that the Rating Agencies shall
confirm that such changes shall not cause the reduction, withdrawal or
qualification of any of the ratings assigned to the Certificates; 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
12-4
<PAGE>
"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.
b. This Agreement may also be amended from time to time by the
Servicer, the Originator and the Trustee, with the prior written consent of
the Certificate Insurer and 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, the Certificate Insurer 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 the Rating
Agencies. Promptly after the execution of any amendment or consent pursuant
to this Section 12.08, the Trustee shall furnish written notification of
the substance of such amendment to the Rating Agencies, each
Certificateholder and the Class C 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 12.08. Notices. All communications and notices pursuant hereto to
the Seller, the Servicer, the Originator, the Trustee, the Rating Agencies and
the Certificate Insurer 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 "servicerreports@moody's.com"
If to Certificate Insurer:
Financial Security Assurance Inc.
350 Park Avenue
New York, New York 10022
Attn: Surveillance Department
Re: Conseco Finance Home Equity Loan Trust 2000-D
Confirmation: (212) 826-0100
Telecopy Nos: (212) 359-3518, (212) 339-3529
(in each case in which notice or other communication to the
Certificate Insurer refers to a Servicer Termination Event, a
claim on the Certificate Insurance Policy or with respect to
which failure on the part of the Certificate Insurer to
respond shall be deemed to constitute consent or acceptance,
then a copy of such notice or other communication should also
be sent to the attention of each of the General Counsel and
the Head-Financial Group of the Certificate Insurer and shall
be marked on the outside "URGENT MATERIAL ENCLOSED")
12-7
<PAGE>
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder or
the Class C Certificateholder shall be in writing and delivered or mailed at the
address shown in the Certificate Register.
SECTION 12.09. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 12.10. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 12.11. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Minnesota.
SECTION 12.12. Grant of Owner Rights to Certificate Insurer.
In consideration for the guarantee of the Class A Certificates by the
Certificate Insurer pursuant to the Certificate Insurance Policy, the Class A
Certificateholders hereby grant to the Certificate Insurer the right to act as
the Certificateholder of 100% of the Outstanding Class A Certificates for the
purpose of exercising the rights of the Holders of the Class A Certificates
hereunder, including the voting rights of such Holders, but excluding any rights
of such Holders to distributions under Section 8.04(b); provided that the
preceding grant of rights to the Certificate Insurer by the Class A
Certificateholders shall be subject to Section 12.14 hereof. The rights of the
Certificate Insurer to direct certain actions and consent to certain actions of
the Certificateholders hereunder will terminate at such time as the Class A
Principal Balance has been reduced to zero and the Certificate Insurer has been
reimbursed for all Insured Payments and any other amounts owed under the
Certificate Insurance Policy and the Insurance Agreement and the Certificate
Insurer has no further obligation under the Certificate Insurance Policy.
SECTION 12.13. Third Party Beneficiary.
The parties hereto acknowledge that the Certificate Insurer is an express
third party beneficiary hereof entitled to enforce any rights reserved to it
hereunder as if it were actually a party hereto.
SECTION 12.14. Suspension and Termination of Certificate Insurer's Rights.
(a) During the continuation of a Certificate Insurer Default, rights
granted or reserved to the Certificate Insurer hereunder shall vest instead
in the Certificateholders; provided that the Certificate Insurer shall be
entitled to payment of any Premium Amounts due to it and any distributions
in reimbursement of the Reimbursement Amount, and the Certificate Insurer
shall retain those rights under Section 12.07 to consent to any amendment
to this Agreement.
12-8
<PAGE>
(b) At such time as either (i) the Class A Principal Balance has been
reduced to zero or (ii) the Certificate Insurance Policy has been
terminated following a Certificate Insurer Default, and in either case of
(i) or (ii) the Certificate Insurer has been paid all Premium Amounts due
to it and has been reimbursed for all Insured Payments and any other
amounts owed under the Certificate Insurance Policy and the Insurance
Agreement (and the Certificate Insurer no longer has any obligation under
the Certificate Insurance Policy, except for breach thereof by the
Certificate Insurer), then the rights and benefits granted or reserved to
the Certificate Insurer hereunder (including the rights to direct certain
actions and receive certain notices) shall terminate and the
Certificateholders shall be entitled to the exercise of such rights and to
receive such benefits of the Certificate Insurer following such termination
to the extent that such rights and benefits are applicable to the
Certificateholders.
12-9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized this 28th 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:
-------------------------------------
Lori Anne Rosenberg
Assistant Vice President
12-10
<PAGE>
STATE OF INDIANA )
) ss.
COUNTY OF HAMILTON )
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 INDIANA )
) ss.
COUNTY OF HAMILTON )
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 Lori Anne Rosenberg, Assistant Vice President, of U.S. Bank Trust
National Association, a national banking association, on behalf of the national
banking association.
-----------------------------
Notary Public
12-11
<PAGE>
EXHIBIT A
---------
FORM OF CLASS A-[1][2][3][4][5] CERTIFICATE
-------------------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class A-[1][2][3][4][5] No.
(Senior)
Cut-off Date: Pass-Through Rate: %
----------
as defined in the Pooling and
Servicing Agreement dated Denomination: $
June 1, 2000 ---------------
First Payment Date: Aggregate Denomination of
July 17, 2000 all Class A-[1][2][3][4][5] 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-D, CLASS A-[1][2][3][4][5] (SENIOR)
-----------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that _________________ 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-D, Class
A-[1][2][3][4][5] issued by Conseco Finance Home Equity Loan Trust 2000-D (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
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
A-1
<PAGE>
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-[1][2][3][4][5] Certificates with an aggregate Percentage Interest
of at least 5% of the Class A-[1][2][3][4][5] Certificates and so desires, by
wire transfer pursuant to instructions delivered to the Trustee at least 10 days
prior to such Payment Date) to the registered Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Payment Date, in an amount equal to the Certificateholder's
Percentage Interest of the Class A-[1][2][3][4][5] Distribution Amount and any
Additional Principal Distribution Amount for such Payment Date. Distributions of
interest and principal on the Class A-[1][2][3][4][5] Certificates will be made
primarily from amounts available in respect of the Loans. The final scheduled
Payment Date of this Certificate is 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.
Financial Security Assurance Inc. (the "Certificate Insurer") has issued a
Certificate Insurance Policy in the name of the Trustee for the benefit of the
Holders of the Class A Certificates. Unless a Certificate Insurer Default shall
be continuing, subject to Section 8.13 of the Agreement, the Certificate Insurer
shall be deemed to be the Holder of the Class A Certificates for the purpose of
exercising the rights, including voting rights, under the Agreement. In
addition, on each Payment Date, after the Holders of the Class A Certificates
have been paid all amounts to which they are entitled, the Certificate Insurer
will be entitled to be reimbursed for any unreimbursed Insured Payments and any
other amounts owed under the Certificate Insurance Policy in respect of the
Class A Certificates.
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
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<PAGE>
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.
A-3
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-D 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-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-------------------------------------
Authorized Officer
A-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________ the within Certificate for Home Equity Loans, Series
2000-D, and does hereby irrevocably constitute and appoint _____________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated: By:
--------------------------- -------------------------------------
Signature
A-5
<PAGE>
EXHIBIT B
---------
[RESERVED]
----------
B-1
<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 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: %
---------
as defined in the Pooling and (or, the Weighted Average Loan
Servicing Agreement dated Rate, if less)
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-D, 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
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<PAGE>
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE SELLER OR THE SERVICER TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT, OR, IF NO SUCH OPINION IS
DELIVERED, IS DEEMED TO REPRESENT TO THE TRUSTEE, THE ORIGINATOR, THE SELLER AND
THE SERVICER EITHER (I) THAT THE PERSON ACQUIRING THE CERTIFICATE IS NEITHER A
PLAN, NOR ACTING ON BEHALF OF A PLAN, SUBJECT TO ERISA OR TO SECTION 4975 OF THE
CODE, OR (II) THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY SUCH PLAN
WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE PLAN ASSETS AND
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL
NOT SUBJECT THE TRUSTEE, THE ORIGINATOR, THE SELLER OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that _______________________ is the registered owner of the
undivided Percentage Interest represented by the original principal amount set
forth above in the Certificates for Home Equity Loans, Series 2000-D, Class
B-[1][2], issued by Conseco Finance Home Equity Loan Trust 2000-D (the "Trust"),
which includes among its assets a pool of closed-end home equity loans (the
"Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date. The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
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 Amount for such Payment Date. Distributions of interest and
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<PAGE>
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.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
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
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<PAGE>
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest
herein.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
This Certificate shall be a "security" for purposes of Article 8, Section
102(a)(15)(B) of the Uniform Commercial Code and shall be governed by such
Article 8 as in effect in the state of Minnesota from time to time.
C-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-D 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-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-------------------------------------
Authorized Officer
C-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________________ the within Certificate for Home Equity Loans,
Series 2000-D, and does hereby irrevocably constitute and appoint
______________________ Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: By:
-------------------------- -------------------------------------
Signature
C-6
<PAGE>
EXHIBIT D
---------
FORM OF ASSIGNMENT
------------------
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of 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, assign, set over and otherwise convey, without recourse, to Conseco
Finance Home Equity Loan Trust 2000-D, created by the Agreement, to be held in
trust as provided in the Agreement, (i) all right, title and interest in the
home equity loans identified in the List of Loans attached to the Agreement and
each Subsequent Transfer Instrument (including, without limitation, all related
mortgages, deeds of trust and security deeds and any and all rights to receive
payments on or with respect to the Loans due after the Cut-off Date, or
Subsequent Cut-off Date with respect to Subsequent Loans), (ii) all rights of
the Seller under the Transfer Agreement and any Subsequent Transfer Agreement
(as defined in the Transfer Agreement), (iii) all rights under any hazard, flood
or other individual insurance policy on the real estate securing a Loan for the
benefit of the creditor of such Loan, (iv) all rights the Originator may have
against the originating lender with respect to Loans originated by a lender
other than the Originator, (v) all rights under the Errors and Omissions
Protection Policy and the Fidelity Bond as such policy and bond relate to the
Loans, (vi) all rights under any title insurance policies, if applicable, on any
of the properties securing Loans, (vii) all documents contained in the related
Loan Files, (viii) amounts in the Certificate Account and any Capitalized
Interest Account, Pre-Funding Account and Undelivered Loan 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.
By:
------------------------------------
[Name]
[Title]
D-1
<PAGE>
EXHIBIT E-1
-----------
FORM OF CERTIFICATE OF OFFICER
------------------------------
CONSECO FINANCE CORP.
The undersigned certifies that she is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such she 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 relating to the
Conseco Finance Home Equity Loan Trust 2000-D among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank Trust National Association, as Trustee (the
"Pooling and Servicing Agreement"). All capitalized terms used herein without
definition have the respective meanings specified in the Pooling and Servicing
Agreement. The Pooling and Servicing Agreement, Underwriting Agreement and
Insurance Agreement are referred to in this Certificate collectively as the
"Transaction Documents". The undersigned 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) each of the representations and warranties of the Company
contained in Sections 3.02, 3.04 and 3.05 of the Pooling and Servicing
Agreement and in Section 2.04 of the Insurance Agreement is, to the best of
her knowledge, 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 a Servicer Termination Event or an event
that with notice or lapse of time or both would become a Servicer
Termination Event 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 Transaction
Documents has 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, which resolutions (i) constitute the only
resolutions adopted by the Board of Directors or any committee thereof
relating to the subject matter thereof, (ii) have not been amended,
modified, annulled or revoked, and (iii) are in full force and effect; and
the instruments referred to in said resolutions were executed pursuant
thereto and in compliance therewith; and
E-1
<PAGE>
(vii) each person who, as an officer of the Company, signed any of the
Transaction Documents 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
<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
she 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 relating to the Conseco Finance Home Equity Loan Trust 2000-D, among the
Company, Conseco Finance Corp. and U.S. Bank Trust National Association, as
Trustee (the "Pooling and Servicing Agreement"). All capitalized terms used
herein without definition have the respective meanings specified in the Pooling
and Servicing Agreement. The Pooling and Servicing Agreement, Underwriting
Agreement and Insurance Agreement are referred to collectively in this
Certificate as the "Transaction Documents." The undersigned 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) each of representations and warranties of the Company contained
in Section 3.01 of the Pooling and Servicing Agreement and in Section 2.01
of the Insurance Agreement is, to the best of her knowledge, 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 a Servicer Termination Event or an event
that with notice or lapse of time or both would become a Servicer
Termination Event 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 Transaction
Documents 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
Transaction Documents, 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
--------------------------
The opinion of Briggs and Morgan, Professional Association shall be to the
effect that undefined capitalized terms have the meanings set forth in the
Pooling and Servicing Agreement):
1. The Originator is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, with corporate power
to execute, deliver and perform its obligations under the Pooling and Servicing
Agreement, the Transfer Agreement, the Insurance Agreement, the Indemnification
Agreement and the Underwriting Agreement (collectively, the "Transaction
Documents"). The Seller is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Minnesota, with corporate power
to execute, deliver and perform in its obligations under the Transaction
Documents.
2. The Transaction Documents have been duly authorized by all requisite
corporate action, duly executed and delivered by the Originator and the Seller,
and constitute the valid and binding obligations of the Originator and the
Seller enforceable in accordance with their terms. The Certificates have been
duly authorized by all requisite corporate action and, when duly and validly
executed by the Trustee in accordance with the Pooling and Servicing Agreement,
will be validly issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator or the Seller for the consummation of the transactions contemplated
by the Transaction Documents, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriters pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Loans by the Originator to the Seller, nor
the assignment of the Originator's security interest in the real estate securing
the Loans, nor the issuance or sale of the Certificates, nor the execution and
delivery of the Transaction Documents, nor the consummation of any other of the
transactions contemplated in the Transaction Documents nor the fulfillment of
the terms of the Certificates, the Class C Certificate or the Transaction
Documents by the Originator, will conflict with, or result in a breach,
violation or acceleration of, or constitute a default under, any term or
provision of the Certificate of Incorporation or 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.
F-1
<PAGE>
6. Neither the transfer of the Loans by the Seller to the Trustee acting on
behalf of the Trust, nor the assignment of the Seller's security interest in the
real estate securing the Loans, nor the issuance or sale of the Certificates,
nor the execution and delivery of the Transaction Documents, nor the
consummation of any other of the transactions contemplated in the Transaction
Documents, nor the fulfillment of the terms of the Certificates, the Class C
Certificate or the Transaction Documents by the Seller, will conflict with, or
result in a breach, violation or acceleration of, or constitute a default under,
any term or provision of the Articles of Incorporation or Bylaws of the Seller
or of any indenture or other agreement or instrument known to us to which the
Seller is a party or by which it is bound, or result in a violation of, or
contravene the terms of any statute, order or regulation, applicable to the
Seller, of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it.
7. There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Originator or the Seller before any court, administrative agency or other
tribunal (A) asserting the invalidity of the Transaction Documents, the
Certificates, the Class C 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, the Class C Certificate, or
the consummation of any of the transactions contemplated by the Transaction
Documents, (C) which is likely materially and adversely to affect the
performance by the Originator or the Seller of its obligations under, or the
validity or enforceability of, the Transaction Documents, the Certificates or
the Class C 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 "Federal Income Tax
Consequences."
8. The transfer of the Initial and Additional Loans to the Trust in
accordance with Section 2.01 of the Pooling and Servicing Agreement would not be
avoidable as a preferential transfer under Section 547 of the United States
Bankruptcy Code (11 U.S.C. ss. 547), as in effect on the date hereof, in the
event that the Originator became a debtor under the United States Bankruptcy
Code.
9. Pursuant to the Transfer Agreement the Originator has transferred to the
Seller all of the Originator's right, title and interest in the Loans, free and
clear of any and all other assignments, encumbrances, options, rights, claims,
liens or security interests (except tax or possessory liens) that may affect the
right of the Seller in and to such Loans, and has delivered the Loan Files to
the Trustee (as the Seller's designee) or its custodian. No filing or other
action, other than the filing of a financing statement on Form UCC-1 with the
Secretary of State of the State of Minnesota identifying the Loans as collateral
and naming the Originator as debtor and the Seller as secured party, and the
filing of continuation statements as required by the Transfer Agreement, is
necessary to perfect as against third parties the assignment of the Loans by the
Originator to the Seller. We have separately provided you with our opinion
concerning whether such assignment could be recharacterized as a pledge rather
than a sale in the event the Originator became a debtor under the United States
Bankruptcy Code. However, in the event such assignment were recharacterized as a
pledge securing a loan from the Seller to the Originator, it is our opinion that
the Seller would be deemed to have a valid and perfected security interest in
the Initial and Additional Loans and the proceeds thereof, which security
interest would be prior to any other security interest that may be perfected
under the Uniform
F-2
<PAGE>
Commercial Code as in effect in the State of Minnesota and over any "lien
creditor" (as defined in Minn. Stat. ss.336.9-301(3)) who becomes such after the
Closing Date, except that a subsequent purchaser of any Loan who gives new value
and takes possession thereof in the ordinary course of his business would have
priority over the Seller's security interest in such Loans, if such purchaser
acts without knowledge that such Loan was subject to a security interest. We
have assumed for the purposes of this opinion that during the term of the
Pooling and Servicing Agreement the Trustee, or its custodian, shall maintain
possession of the Loan Files for the purpose of perfecting the assignment to the
Seller of the Loans. We express no opinion with respect to the enforceability of
any individual Loan or the existence of any claims, rights or other matters in
favor of any Obligor.
10. Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the Seller's
right, title and interest in the Loans, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Loans, and has delivered the Loan Files to the Trustee or its custodian.
No filing or other action, other than the filing of a financing statement on
Form UCC-1 with the Secretary of State of the State of Minnesota identifying the
Loans as collateral and naming the Seller as debtor and the Trustee as secured
party, and the filing of continuation statements as required by the Pooling and
Servicing Agreement, is necessary to perfect as against third parties the
assignment of the Loans by the Seller to the Trustee. We have separately
provided you with our opinion concerning whether such assignment could be
recharacterized as a pledge rather than a sale in the event the Seller became a
debtor under the United States Bankruptcy Code. However, in the event such
assignment were recharacterized as a pledge securing a loan from the
Certificateholders to the Seller, it is our opinion that the Trustee would be
deemed to have a valid and perfected security interest in the Loans and the
proceeds thereof, which security interest would be prior to any other security
interest that may be perfected under the Uniform Commercial Code as in effect in
the State of Minnesota and over any "lien creditor" (as defined in Minn. Stat.
ss.336.9-301(3)) who becomes such after the Closing Date, except that a
subsequent purchaser of any Loan, who gives new value and takes possession
thereof in the ordinary course of his business would have priority over the
Trustee's security interest in such Loan, if such purchaser acts without
knowledge that such Loan was subject to a security interest. We have assumed for
the purposes of this opinion that during the term of the Pooling and Servicing
Agreement the Trustee, or its custodian, shall maintain possession of the Loans
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.
11. In reliance upon certain representations and warranties set forth in
the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing of a proper election to be taxed as a REMIC, as of the date
hereof the REMIC created pursuant to the Pooling and Servicing Agreement will
qualify as a REMIC. Further, the 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 and franchise tax purposes, and subject to the foregoing assumptions, and
the provisions of Minnesota law as of the date hereof, the Trust (excluding the
Capitalized Interest Account and the Pre-Funding
F-3
<PAGE>
Account) will not be subject to tax and the income of the Trust will be taxable
to the holders of interests therein, all in accordance with the provisions of
the Code concerning REMICs. Moreover, ownership of Certificates will not be a
factor in determining whether such owner is subject to Minnesota income and
franchise taxes. Therefore, if the owner of Certificates is not otherwise
subject to Minnesota income or franchise taxes in the State of Minnesota, such
owner will not become subject to such Minnesota taxes solely by virtue of owning
Certificates.
12. The transfer of the Initial and Additional Loans and the proceeds
thereof by the Seller to the Trustee on the date hereof pursuant to the Pooling
and Servicing Agreement would not be avoidable as a fraudulent transfer under
the Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Seller become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. ss. 548) as in
effect on the date hereof.
F-4
<PAGE>
EXHIBIT G
---------
FORM OF TRUSTEE'S ACKNOWLEDGMENT
--------------------------------
U.S. Bank Trust National Association, a national banking association
organized under the laws of the United States, acting as trustee (the "Trustee")
of Conseco Finance Home Equity Loan Trust 2000-D (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, the
Undelivered Loan Account and the Pre-Funding Account (including all proceeds of
investments of funds in the Certificate Account, (viii) the Certificate
Insurance Policy, (ix) all rights of the Seller under the Transfer Agreement,
and (x) all proceeds and products of the foregoing; and declares that, directly
or through a Custodian, it will hold all Loan Files that have been delivered in
trust, upon the trusts set forth in the Agreement for the use and benefit of all
Certificateholders and the holders of the Class C Certificate.
[From Trustee or Custodian as applicable.] The [Trustee] acknowledges that
it has conducted a 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) in the case of Loans originated by a lender other than the
Originator, 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, U.S. Bank Trust National Association 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-D (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 Servicer Termination Event or event that
with notice or lapse of time or both would become a Servicer Termination
Event has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of__________, ____________.
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 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
I-1
<PAGE>
BE PLAN ASSETS AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND
THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE ORIGINATOR OR THE SERVICER TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Class C No.
(Subordinate)
Cut-off Date: Percentage Interest: 100%
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-D
Original Aggregate Certificate Principal Balance of the Trust: $1,000,000,000
-------------
This certifies that Green Tree Finance Corp.--Two is the registered owner
of the residual interest represented by this Certificate, and entitled to
certain distributions out of Conseco Finance Home Equity Loan Trust 2000-D (the
"Trust"), which includes among its assets a pool of closed-end home equity loans
(the "Loans") (including, without limitation, all mortgages, deeds of trust and
security deeds relating to such Loans and any and all rights to receive payments
due on the Loans after the applicable Cut-off Date). The Trust has been created
pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated as of
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 the amounts
distributed pursuant to clauses (1) through (16) of Section 8.04(b) of the
Agreement. 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
I-2
<PAGE>
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 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.
I-3
<PAGE>
The holder of this Class C Certificate, by acceptance hereof, agrees that,
in accordance with the requirements of Section 860D(b)(1) of the Code, the
federal tax return of the Trust for its first taxable year shall provide that
the Trust elects to be treated as a "real estate mortgage investment conduit" (a
"REMIC") under the Code for such taxable year and all subsequent taxable years.
The Certificates shall be "regular interests" in the REMIC and the Class C
Certificate shall be the "residual interest" in the REMIC. In addition, the
holder of this Class C Certificate, by acceptance hereof, (i) agrees to file tax
returns consistent with and in accordance with any elections, decisions or other
reports made or filed with regard to federal, state or local taxes on behalf of
the Trust, and (ii) agrees to cooperate with the Originator in connection with
examinations of the Trust's affairs by tax authorities, including administrative
and judicial proceedings, and (iii) makes the additional agreements,
designations and appointments, and undertakes the responsibilities, set forth in
Section 6.06 of the Agreement.
This Certificate shall be a "security" for purposes of Article 8, Section
102(a)(15)(B) of the Uniform Commercial Code and shall be governed by such
Article 8 as in effect in the state of Minnesota from time to time.
I-4
<PAGE>
IN WITNESS WHEREOF, Conseco Finance Home Equity Loan Trust 2000-D 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-D
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
-------------------------------------
Authorized Officer
I-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _________________ the within Certificate for Home Equity Loans, Series
2000-D, and does hereby irrevocably constitute and appoint _____________________
Attorney to transfer the said certificate on the Certificate Register maintained
by the Trustee, with full power of substitution in the premises.
Dated: By:
-------------------------- -------------------------------------
Signature
I-6
<PAGE>
EXHIBIT J-1
-----------
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
-----------------------------------------------
Conseco Finance Corp.
I, __________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06 and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of 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-D (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Loans on the attached schedule are to be repurchased by the
Company on the date hereof pursuant to Section 3.06 of the Agreement.
2. Upon deposit of the Repurchase Price for such Loans, such Loans
may, pursuant to Section 8.05 of the Agreement, be assigned by the Trustee
to the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _______ day
of _____________, 2000.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-1-1
<PAGE>
EXHIBIT J-2
-----------
FORM OF CERTIFICATE REGARDING REPURCHASED LOANS
-----------------------------------------------
Conseco Finance Corp.
I, __________________________, hereby certify that I am a [title] of
Conseco Finance Corp., a Delaware corporation (the "Company"), and that as such
I am duly authorized to execute and deliver this certificate on behalf of the
Company pursuant to Sections 3.06(b) and 8.05 of the Pooling and Servicing
Agreement (the "Agreement") dated as of 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-D (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement), and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the
date hereof pursuant to Section 3.06(b) of the Agreement and each such Loan
is an Eligible Substitute Loan [description, as to each Loan, as to how it
satisfies the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 3.05(b)(iii) of the Agreement,
have been filed with the appropriate offices.
4. The requirements of Section 3.06(b) of the Agreement have been met
with respect to each such Eligible Substitute Loan.
5. There has been deposited in the Certificate Account the amounts
listed on the schedule attached hereto as the amount by which the Scheduled
Principal Balance of each Replaced Loan exceeds the Scheduled Principal
Balance of each Loan being substituted therefor.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ______ day of
_____________________, ____________.
CONSECO FINANCE CORP.
By:
-------------------------------------
[Name]
[Title]
J-2-1
<PAGE>
EXHIBIT J-3
-----------
FORM OF CERTIFICATE REGARDING SUBSTITUTION FOR PREPAID LOANS
------------------------------------------------------------
Conseco Finance 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-D (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Loan and Loan File for each such Eligible Substitute Loan have
been delivered to [the Trustee] [the Custodian].
2. The Loans on the attached schedule are to be substituted on the
date hereof pursuant to Section 2.06 of the Agreement and each such Loan is
an Eligible Substitute Loan [description, as to each Loan, as to how it
satisfies the definition of "Eligible Substitute Loan"].
3. The UCC-1 financing statements in respect of the Loans to be
substituted, in the form required by Section 2.06(iii) of the Agreement,
have been filed with the appropriate offices.
4. The requirements of Section 2.06 of the Agreement have been met
with respect to each such Eligible Substitute Loan.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ______ day of
_______________, ____________.
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-D, Class C
The undersigned purchaser (the "Purchaser") understands that the
purchase of the above-referenced certificates (the "Certificates") may be made
only by institutions which are "Accredited Investors" under Regulation D, as
promulgated under the Securities Act of 1933, as amended (the "1933 Act"), which
includes banks, savings and loan associations, registered brokers and dealers,
insurance companies, investment companies, and organizations described in
Section 501(c)(3) of the Internal Revenue Code, corporations, business trusts
and partnerships, not formed for the specific purpose of acquiring the
Certificates offered, with total assets in excess of $5,000,000. The undersigned
represents on behalf of the Purchaser that the Purchaser is an "Accredited
Investor" within the meaning of such definition. The Purchaser is urged to
review carefully the responses, representations and warranties it is making
herein.
Representations and Warranties
------------------------------
The Purchaser makes the following representations and warranties in
order to permit the Trustee, Conseco Finance Corp., and _______________ to
determine its suitability as a purchaser of Certificates and to determine that
the exemption from registration relied upon by Conseco Finance Corp. under
Section 4(2) of the 1933 Act is available to it.
1. The Purchaser understands that the Certificates have not been and
will not be registered under the 1933 Act and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Conseco Finance
Corp. is not required to register the Certificates and that any transfer must
comply with Section 9.02 of the Pooling and Servicing Agreement relating to the
Certificates.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
3. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The
K-1
<PAGE>
Purchaser has reviewed the Prospectus Supplement dated June 1, 2000, to the
Prospectus dated June 1, 2000 (the "Prospectus") with respect to the
Certificates, and has been given such information concerning the Certificates,
the underlying home equity loans and Conseco Finance Corp. as it has requested.
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. The Purchaser either (check one box):
|_| is not, and is not acting on behalf of or with assets
of, an employee benefit plan that is subject to the
Employee Retirement Income Security Act of 1974, as
amended or that is described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or
|_| has provided the Trustee and Servicer with the
opinion of counsel described in Section 9.02(b)(2) of
the Pooling and Servicing Agreement, or
|_| acknowledges that it is deemed to make the
representation set forth in Section 9.02(b)(2) of the
Pooling and Servicing Agreement.
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
7. The Purchaser, as holder of the Class C Certificate, acknowledges
(i) it may incur tax liabilities in excess of any cash flows generated by the
interest and (ii) it intends to pay the taxes associated with holding the Class
C Certificate as they become due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8. The
representations and warranties contained herein shall be binding upon the heirs,
executors, administrators and other successors of the undersigned. If there is
more than one signatory hereto, the obligations, representations, warranties and
agreements of the undersigned are made jointly and severally.
K-2
<PAGE>
Executed at , , this day of .
------------------ ------------------- ------- ---------
Purchaser's Name (Print)
By:
------------------------
Signature
Its:
--------------------
Address of Purchaser
Purchaser's Taxpayer
Identification Number
K-3
<PAGE>
EXHIBIT L
LIST OF INITIAL AND ADDITIONAL LOANS
[To Be Supplied]
L-1
<PAGE>
EXHIBIT M
---------
FORM OF MONTHLY REPORT
----------------------
CERTIFICATES FOR HOME EQUITY LOANS, SERIES 2000-D
Payment Date:
----------------------
1. Amount Available
----------
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. Monthly Servicing Fee (if Originator or subsidiary
is not Servicer)
----------
4. Insured Payment
----------
5. Premium Amount
----------
6. Backup Servicer Fees and Servicer reimbursement
Class A Certificates
--------------------
Interest
7. Aggregate current interest
(a) Class A-1 Pass-Through Rate (7.52%)
----------
(b) Class A-1 Interest
----------
(c) Class A-2 Pass-Through Rate (7.67%)
----------
(d) Class A-2 Interest
----------
(e) Class A-3 Pass-Through Rate (7.89%)
----------
(f) Class A-3 Interest
----------
(g) Class A-4 Pass-Through Rate (8.17%)
----------
(h) Class A-4 Interest
----------
(i) Class A-5 Pass-Through Rate (8.41%)
----------
(j) Class A-5 Interest
----------
M-1
<PAGE>
8. Amount applied to Unpaid Class A Interest Shortfall
----------
9. Remaining Unpaid Class A Interest Shortfall
----------
Class B-1 Certificates
----------------------
10. Amount Available less all preceding
distributions and Insured Payment
----------
Interest on Class B-1 Adjusted Principal Balance
11. Class B-1 Adjusted Principal Balance
----------
Current Interest
(a) Class B-1 Pass-Through Rate (11.26%) (or the
Weighted Average Loan Rate, if less)
----------
(b) Class B-1 Interest
----------
12. Amount applied to Unpaid Class B-1 Interest Shortfall
----------
13. Remaining Unpaid Class B-1 Interest Shortfall
----------
Class B-2 Certificates
----------------------
14. Amount Available less all preceding
distributions and Insured Payment
----------
Interest on Class B-2 Adjusted Principal Balance
15. Class B-2 Adjusted Principal Balance
----------
Current Interest
(a) Class B-2 Pass-Through Rate (11.30%) (or the
Weighted Average Loan Rate, if less)
----------
(b) Class B-2 Interest
----------
16. Amount applied to Unpaid Class B-2 Interest Shortfall
----------
17. Remaining Unpaid Class B-2 Interest Shortfall
----------
Principal
M-2
<PAGE>
18. 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
Class A Principal Balance
----------
(b) the denominator of which is the Pool Scheduled
Principal Balance
----------
19. Trigger Event
(a) Average Ninety-Day Delinquency Ratio Test
(to be satisfied, line (ii) may not exceed line
(iii))
(i) Ninety-Day Delinquency Ratio for current
Payment Date
----------
(ii) Arithmetic average of Average Ninety-Day
Delinquency Ratios for current and two
preceding months
----------
(iii) 48.5% of the Senior Enhancement Percentage
----------
(b) Cumulative Realized Losses Test (to be satisfied,
line (ii) may not exceed 3.65% from July 2003
through June 2004 Payment Dates, 4.75% from July
2004 through June 2005 Payment Dates, 5.50% from
July 2005 through June 2007 Payment Dates, and
6.00% thereafter)
(i) Cumulative Realized Losses for
current Payment Date
----------
(ii) Cumulative Realized Losses as a percentage
of Cut-off Date Pool Principal Balance
----------
(c) Rolling Loss Test (to be satisfied, line (iii)
must be less than 2.50% for July 2003 through June
2004 Payment Dates, 3.00% for July 2004 through
June 2006 Payment Dates, 2.00% for July 2006
through June 2007 Payment Dates, 1.00% thereafter)
(i) Realized Losses for current Payment Date
(ii) Realized Losses for current and preceding
11 Payment Dates
(iii) Line (ii) as a percentage of Pool
Scheduled Principal Balance on earliest
of 12 Payment Dates referred to on line
(ii)
M-3
<PAGE>
20. Overcollateralization Trigger Event
Exists if:
(a) Arithmetic average of Ninety-Day Delinquency
Ratios for current and two preceding months
(line 19(a)(ii), above) exceeds 50.0% of the Senior
Enhancement Percentage, or
----------
(b) Cumulative Realized Losses as a percentage of
Cut-off Date Pool Principal Balance (line
19(b)(ii), above) exceeds 1.95% from July 2000
through June 2001 Payment Dates, 2.70% from June
2001 through June 2002 Payment Dates, 4.65% from
July 2002 through June 2003 Payment Dates, 5.50%
from July 2003 through June 2004 Payment Dates,
5.75% from July 2004 through June 2007, 6.25%
thereafter, or
----------
(c) Realized Losses as a percentage of Pool Scheduled
Principal Balance at beginning of 12 month period
(line 19(c)(ii), above), equals or exceeds 1.25%
from July 2000 through June 2002 Payment Dates,
1.75% from July 2002 through June 2003 Payment
Dates, 2.75% from July 2003 through June 2004
Payment Dates, 3.25% from July 2004 through June
2006 Payment Dates, 2.25% from July 2006 through
June 2007 Payment Dates, 1.25% thereafter
----------
Class A Certificates
21. Amount Available less all preceding distributions
----------
22. Class A Formula Principal Distribution Amount:/1/
(a) Class A-1
----------
(b) Class A-2
----------
(c) Class A-3
----------
(d) Class A-4
----------
(e) Class A-5
----------
23. (a) Class A-1 Principal Balance
----------
(b) Class A-2 Principal Balance
----------
------------------------
/1/ If a Class A Principal Deficiency Amount exists, the remaining
Amount Available is to be distributed pro rata to each Class of Class A
Certificate based on the Class A Principal Balance. If no Class A Principal
Deficiency Amount exists, but the remaining Amount Available is less than the
Class A Formula Principal Distribution Amount, then such remaining Amount
Available is to be distributed pro rata to each Class of Class A Certificate
based on the amount distributable had such remaining Amount Available not been
less than the Class A Formula Principal Distribution Amount.
M-4
<PAGE>
(c) Class A-3 Principal Balance
----------
(d) Class A-4 Principal Balance
----------
(e) Class A-5 Principal Balance
----------
24. Amount, if any, by which Class A Formula Principal
Distribution Amount exceeds amounts distributed
pursuant to item 23, above
----------
25. Amount Available less all preceding distributions
----------
26. Reimbursement Amount to Certificate Insurer
----------
Class B-1 Certificates
----------------------
27. Amount Available less all preceding
distributions
----------
Principal
28. Class B-1 principal distribution
----------
29. Class B-1 Principal Balance
----------
30. Amount, if any, by which Class B-1 Formula Principal
Distribution Amount exceeds Class B-1 Principal
Distribution Amount
----------
Liquidation Loss Interest
31. Amount applied to Class B-1 Liquidation Loss Interest Amount
----------
32. Class B-1 Liquidation Loss Interest Shortfall
----------
33. Amount applied to Unpaid Class B-1 Liquidation Loss
Interest Shortfall
----------
34. Remaining Unpaid Class B-1 Liquidation Loss
Interest Shortfall
----------
35. Monthly Servicing Fee (if Originator or subsidiary is not
Servicer) (Portion Not Paid Under (3), Above)
----------
Class B-2 Certificates
----------------------
36. Amount Available less all preceding
distributions
----------
M-5
<PAGE>
Principal
37. Class B-2 principal distribution
----------
36. Class B-2 Principal Balance
----------
38. Amount, if any, by which Class B-2 Formula Principal
Distribution Amount exceeds Class B-2 Principal
Distribution Amount
----------
Liquidation Loss Interest
39. Amount applied to Class B-2 Liquidation Loss Interest Amount
----------
40. Class B-2 Liquidation Loss Interest Shortfall
----------
41. Amount applied to Unpaid Class B-2 Liquidation Loss
Interest Shortfall
----------
42. Remaining Unpaid Class B-2 Liquidation Loss
Interest Shortfall
----------
Overcollateralization Distribution Amount (on or after July 2001 Payment Date)
43. Class [A-1] [A-2] [A-3] [A-4] [A-5] [B-1]
----------
44. Monthly Servicing Fee (if Originator or subsidiary is
Servicer)
----------
45. Reimbursement for unreimbursed Advances, Liquidation
Expenses, Maintenance Expenses
----------
46. Additional Principal Distribution Amount
----------
(a) Class A-1
----------
(b) Class A-2
----------
(c) Class A-3
----------
(d) Class A-4
----------
(e) Class A-5
----------
(f) Class B-1
----------
(g) Class B-2
----------
47. Monthly Servicing Fee (if Originator or subsidiary is not
Servicer) (Portion Not Paid Under (3), Above)
----------
Class A and Class B Certificates
--------------------------------
48. Pool Scheduled Principal Balance
----------
M-6
<PAGE>
49. Pool Factor
----------
50. Loans Delinquent:
30 - 59 days
----------
60 - 89 days
----------
90 or more days
----------
51. Principal Balance of Defaulted Loans
----------
52. Loans granted Extensions
(a) Aggregate unpaid principal balance
----------
(b) Number
----------
53. Liquidated Loans
(a) Number
----------
(b) Aggregate unpaid principal balance
----------
(c) REO
----------
(d) Net Liquidation Loss
----------
54. Number of Loans Remaining
----------
55. Pre-Funded Amount
----------
56. Reimbursement of Class C Certificateholder expenses
----------
57. Prepayment Charges
(a) collected
----------
(b) waived [identify by Loan]
----------
58. Overcollateralization Amount
----------
59. Target Overcollateralization Amount
----------
Class C Certificate
-------------------
60. Class C Distribution Amount
----------
61. Servicer Termination Trigger Event
Exists if:
(a) Arithmetic average of Ninety-Day Delinquency
Ratios for current and two preceding months (line
19(a)(ii) above), exceeds 52.0% of the Senior
Enhancement Percentage, or
----------
M-7
<PAGE>
(b) Cumulative Realized Losses as a percentage of
Cut-off Date Pool Principal Balance (line
19(b)(ii), above), exceeds 2.25% from July 2000
through June 2001 Payment Dates, 3.00% from July
2001 through June 2002 Payment Dates, 4.25% from
July 2002 through June 2003 Payment Dates, 4.75%
from July 2003 through June 2004 Payment Dates,
5.25% from July 2004 through June 2005, 6.00%
thereafter, or
----------
(c) Realized Losses as a percentage of Pool Scheduled
Principal Balance (line 19(c)(ii), above), equals
or exceeds 1.50% for July 2000 through June 2002
Payment Dates, 2.00% for July 2002 through June
2003 Payment Dates, 3.00% for July 2003 through
June 2004 Payment Dates, 3.50% for July 2004
through June 2006 Payment Dates, 2.50% for July
2006 through June 2007 Payment Dates, 1.50%
thereafter
----------
Please contact the Bondholder Relations Department of U.S. Bank Trust
National Association at (612) 224-0444 with any questions regarding this
Statement or your Distribution.
M-8
<PAGE>
EXHIBIT N
---------
FORM OF ADDITION NOTICE
-----------------------
, 2000
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, MN 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as
of 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-D
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the
meanings given them in the Agreement. The Seller hereby notifies the Trustee of
an assignment to the Trust of Subsequent Loans on the date and in the amounts
set forth below:
Subsequent Transfer Date:
-----------------------------
Cut-off Date Principal Balance of Subsequent Loans to be assigned to
Trust on Subsequent Transfer Date: $________________.
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
CONSECO FINANCE SECURITIZATIONS
CORP.
By:
---------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
---------------------------------
Name:
Title:
N-1
<PAGE>
EXHIBIT O
---------
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
--------------------------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of 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-D, 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.
By:
---------------------------------
Name:
Title:
O-1
<PAGE>
EXHIBIT P
---------
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
---------------------------------------------------
CONSECO FINANCE SECURITIZATIONS 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
