TRUST AGREEMENT
among
CONSECO HE/HI 2001-B-2, INC.
as Depositor
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 TRUST HE/HI 2001-B-2
Dated as of May 1, 2001
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS................................................... 1-1
SECTION 1.01 General................................................ 1-1
SECTION 1.02 Specific Terms......................................... 1-1
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 Acceptance by Trustee.................................. 2-2
SECTION 2.04 REMIC Provisions....................................... 2-3
SECTION 2.05 Depositor Option to Substitute for Prepaid Loans....... 2-4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR, THE
SERVICER AND THE TRUSTEE.................................... 3-1
SECTION 3.01 Representations and Warranties of the Depositor........ 3-1
SECTION 3.02 Representations and Warranties of the Servicer......... 3-2
SECTION 3.03 Representations and Warranties of the Trustee.......... 3-2
SECTION 3.04 Negative Covenants of the Trust........................ 3-3
ARTICLE IV. THE CERTIFICATES AND THE CLASS C CERTIFICATE................ 4-1
SECTION 4.01 The Certificates and the Class C Certificate........... 4-1
SECTION 4.02 Registration of Transfer and Exchange of
Certificates and the Class C Certificate............... 4-1
SECTION 4.03 No Charge; Disposition of Void Certificates or Class
C Certificate.......................................... 4-5
SECTION 4.04 Mutilated, Destroyed, Lost or Stolen Certificates or
Class C Certificate.................................... 4-5
SECTION 4.05 Persons Deemed Owners.................................. 4-5
SECTION 4.06 Access to List of Certificateholders' Names and
Addresses.............................................. 4-5
SECTION 4.07 Authenticating Agents.................................. 4-6
ARTICLE V. ACCOUNTS; PAYMENTS TO CERTIFICATEHOLDERS; DEPOSITOR
PAYMENT OBLIGATION.......................................... 5-1
SECTION 5.01 Collection of Money.................................... 5-1
SECTION 5.02 Establishment of Certificate Account................... 5-1
SECTION 5.03 Withdrawals and Application of Funds in Certificate
Account................................................ 5-2
SECTION 5.04 Method of Payment...................................... 5-3
SECTION 5.05 Reserve Account........................................ 5-5
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SECTION 5.06 Depositor Payment Obligation.......................................................... 5-6
SECTION 5.07 Acknowledgment of Obligation to Repurchase Reserve Account Loans...................... 5-6
ARTICLE VI. REPORTS AND TAX MATTERS....................................................................... 6-1
SECTION 6.01 Accounting and 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 Certificateholder Annual Statement.................................................... 6-1
SECTION 6.06 Payment of Taxes...................................................................... 6-1
ARTICLE VII. THE TRUSTEE................................................................................... 7-1
SECTION 7.01 Duties of Trustee..................................................................... 7-1
SECTION 7.02 Certain Matters Affecting the Trustee................................................. 7-2
SECTION 7.03 Trustee Not Liable for Certificates, Class C Certificate or Loans..................... 7-3
SECTION 7.04 Trustee May Own Certificates.......................................................... 7-3
SECTION 7.05 Rights of Certificateholders to Direct Trustee and to Waive Events of Termination..... 7-3
SECTION 7.06 The Servicer to Pay Trustee's Fees and Expenses....................................... 7-4
SECTION 7.07 Eligibility Requirements for Trustee.................................................. 7-4
SECTION 7.08 Resignation or Removal of Trustee..................................................... 7-4
SECTION 7.09 Successor Trustee..................................................................... 7-5
SECTION 7.10 Merger or Consolidation of Trustee.................................................... 7-6
SECTION 7.11 Tax Returns........................................................................... 7-6
SECTION 7.12 Obligor Claims........................................................................ 7-6
SECTION 7.13 Appointment of Co-Trustee or Separate Trustee......................................... 7-7
SECTION 7.14 Trustee and U.S. Bancorp.............................................................. 7-8
ARTICLE VIII. THE SERVICER.................................................................................. 8-1
SECTION 8.01 Responsibility for Reserve Account Loan Administration................................ 8-1
SECTION 8.02 Standard of Care...................................................................... 8-1
SECTION 8.03 Records............................................................................... 8-1
SECTION 8.04 Inspection............................................................................ 8-1
SECTION 8.05 Deposits in Reserve Account........................................................... 8-2
SECTION 8.06 Enforcement........................................................................... 8-2
SECTION 8.07 Trustee to Cooperate.................................................................. 8-3
SECTION 8.08 Costs and Expenses.................................................................... 8-3
SECTION 8.09 Maintenance of Insurance.............................................................. 8-4
SECTION 8.10 Merger or Consolidation of Servicer................................................... 8-4
SECTION 8.11 Removal of Servicer; Resignation of Servicer.......................................... 8-4
SECTION 8.12 Trustee to Act; Appointment of Successor.............................................. 8-5
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ARTICLE IX. INDEMNITIES...................................................................................... 9-1
SECTION 9.01 Real Estate.............................................................................. 9-1
SECTION 9.02 Liabilities to Obligors.................................................................. 9-1
SECTION 9.03 Tax Indemnification...................................................................... 9-1
SECTION 9.04 Servicer's Indemnities................................................................... 9-1
SECTION 9.05 Operation of Indemnities................................................................. 9-1
SECTION 9.06 REMIC Tax Matters........................................................................ 9-2
ARTICLE X. MISCELLANEOUS.................................................................................... 10-1
SECTION 10.01 Servicer Not to Resign; Delegation of Servicing Duties................................... 10-1
SECTION 10.02 Conseco and Depositor Not to Engage in Certain Transactions with Respect to the Trust.... 10-1
SECTION 10.03 Maintenance of Office or Agency.......................................................... 10-1
SECTION 10.04 Termination.............................................................................. 10-1
SECTION 10.05 Acts of Certificateholders and Class C Certificateholder................................. 10-3
SECTION 10.06 Calculations............................................................................. 10-3
SECTION 10.07 Assignment or Delegation by Depositors................................................... 10-3
SECTION 10.08 Amendment................................................................................ 10-4
SECTION 10.09 Notices.................................................................................. 10-5
SECTION 10.10 Merger and Integration................................................................... 10-6
SECTION 10.11 Headings................................................................................. 10-6
SECTION 10.12 Governing Law............................................................................ 10-6
SECTION 10.13 No Petition.............................................................................. 10-7
Exhibit A -- Form of Class B-2 Certificate
Exhibit B -- Form of Class C Certificate
Exhibit C -- REO
Exhibit D -- List of Reserve Account Loans
Exhibit E -- Form of Trustee's Acknowledgment
Exhibit F -- Form of Monthly Report and Officer's Certificate
Exhibit G -- Form of Representation Letter
Exhibit H -- Form of Request for Release of Reserve Account Loan Files
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AGREEMENT, dated as of May 1, 2001, among Conseco HE/HI 2001-B-2, Inc., a
corporation organized and existing under the laws of the State of Minnesota, as
Depositor (the "Depositor"), Conseco Finance Corp., a corporation organized and
existing under the laws of the State of Delaware, as the Originator of certain
Reserve Account Loans (as defined herein) ("the Originator") and as initial
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 Trust HE/HI 2001-B-2 (the "Trust").
WHEREAS, the Depositor intends to sell certificates that will evidence the
entire beneficial ownership interest in the Class B-2 Underlying Certificate (as
defined herein),
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
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ARTICLE I.
DEFINITIONS
-----------
SECTION 1.01 General. For the purpose of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article include the plural as well as the singular, the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular article, section or other
subdivision, and Section references refer to Sections of this Agreement. Unless
otherwise expressly defined herein, capitalized terms defined in the Pooling and
Servicing Agreement (defined below) shall have the same meanings in this
Agreement.
SECTION 1.02 Specific Terms.
"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.
"Agreement" means this Trust Agreement, as it may be amended from time to
time, including the Exhibits hereto.
"Applicants" has the meaning assigned in Section 4.06.
"Authenticating Agent" means any authenticating agent appointed to Section
4.07.
"Book-Entry Certificate" means any Certificate registered in the name of
the Depository or its nominee, ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than (a) a Saturday or a Sunday, or (b)
another day on which banking institutions in the city in which the Person taking
action hereunder is authorized or obligated by law, executive order, or
governmental decree to be closed.
"Certificate" means any of the Class B-2 Certificates. The term
"Certificates" does not include the Class C Certificate.
"Certificate Account" means a separate trust account created and maintained
pursuant to Section 5.02 in the name of the Trust in an Eligible Institution.
"Certificateholder" or "Holder" means the person in whose name a
Certificate or Class C Certificate is registered on the Certificate Register,
except that, solely for the purposes of giving any consent, waiver, request or
demand pursuant to this Agreement, any Certificate or Class C Certificate
registered in the name of the Originator or the Depositor or any Affiliate 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
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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 a Certificate or
Class C Certificate which the Trustee knows to be so owned shall be so
disregarded.
"Certificate Owner" means the person who is the beneficial owner of a Book-
Entry Certificate or, if Definitive Certificates have been issued,
Certificateholders.
"Certificate Principal Balance" means, as of any time of determination,
$7,718,000 less any amounts actually distributed on the Class B-2 Certificates
in respect of principal on all prior Payment Dates.
"Certificate Register" means the register maintained pursuant to Section
4.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 4.02.
"CFSC" means Conseco Finance Securitizations Corp., a Minnesota
corporation.
"Class" means the Class B-2 Certificates.
"Class B-2 Certificate" means any one of the certificates designated on the
face thereof as a Class B-2 Certificate, substantially in the form annexed
hereto as Exhibit A, authenticated and delivered by the Trustee, representing
the right to distributions as set forth herein and evidencing an interest
designated as a "regular interest" for purposes of the REMIC provisions.
"Class B-2 Interest Shortfall" means, for any Payment Date, the excess, if
any, of (a) the amount described in Section 5.03(b)(2)(i) over (b) the amount
distributed to the Certificateholders on such Payment Date pursuant to that
Section.
"Class B-2 Pass-Through Rate" means a per annum rate equal to the Pass-
Through Rate of the Class B-2 Underlying Certificate, which equals the least of
(i) 9.851%, (ii) the Group I Adjusted Weighted Average Loan Rate and (iii) the
Group II Weighted Average Loan Rate.
"Class B-2 Principal Balance" means the Certificate Principal Balance.
"Class B-2 Shortfall" means, for any Payment Date, the amount, if any, by
which (a) the Formula Distribution Amount for the Class B-2 Certificates exceeds
(b) the amount available for distribution on such Payment Date under Section
5.03(b).
"Class B-2 Underlying Certificate" means the Class B-2 Certificates issued
under the Pooling and Servicing Agreement.
"Class C Certificateholder" means the person in whose name the Class C
Certificate is registered on the Certificate Register.
"Class C Certificate" means a Certificate issued by Conseco Finance Trust
HE/HI 2001-B-2, bearing the designation Class C, executed and delivered by the
Trustee substantially in the
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form of Exhibit B, and evidencing an interest designated as a "residual
interest" for purposes of the REMIC Provisions.
"Class C Distribution Amount" means, for any Payment Date, the amount, if
any, available for distribution to the Class C Certificateholder pursuant to
Section 5.03(b)(4).
"Closing Date" means May 31, 2001.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" has the meaning assigned in Section 5.05(c)(ii).
"Contribution Agreement" means the Contribution Agreement dated as of May
1, 2001 between Conseco Finance Corp. and the Depositor.
"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 000
Xxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000.
"Counsel for the Depositor" means Xxxxxx and Xxxxxx, Professional
Association, or other legal counsel for the Depositor.
"Counsel for the Originator" means Xxxxxx and Xxxxxx, Professional
Association, or other legal counsel for the Originator.
"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 Depositor, which is subject to
supervision and examination by Federal or State authorities and whose commercial
paper or unsecured long-term debt (or, in the case of a member of a bank holding
company system, the commercial paper or unsecured long-term debt of such bank
holding company) has been rated A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's in
the case of commercial paper, or BBB+ or higher by each of S&P and Fitch and
Baa1 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 2.05.
"Cut-Off Date" means, with respect to the Reserve Account Loans, April 30,
2001.
"Definitive Certificates" has the meaning assigned in Section 4.02(e).
"Depositor" means Conseco HE/HI 2001-B-2, Inc., a Minnesota corporation.
"Depository" means the initial Depository, the Depository Trust Company,
the nominee of which is Cede & Co., and any successor Depository. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(5) of the Uniform Commercial Code of the State of New York.
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"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.
"Distribution Amount" means, for any Payment Date and (a) the Class B-2
Underlying Certificate, the amount paid to the Trustee on such Payment Date as
the Holder of the Class B-2 Underlying Certificate under Section 8.04(d) of the
Pooling and Servicing Agreement, (b) the Certificates, the amount paid to the
Class B-2 Certificateholders on such Payment Date under Section 5.03(b)(2) of
this Agreement, and (c) the Class C Certificate, the amount paid to the Class C
Certificateholder on such Payment Date under Section 5.03(b)(5).
"Electronic Ledger" means the electronic master record of promissory notes
of the Depositor.
"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 FDIC; (iii) a
trust account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Trustee hereunder, which depository institution
or trust company shall have capital and surplus of not less than $50,000,000; or
(iv) an account that will not cause any of the Rating Agencies to downgrade or
withdraw its then-current rating assigned to the Certificates, as evidenced in
writing by each of the Rating Agencies.
"Eligible Institution" means any depository institution (which may be the
Trustee or an Affiliate of the Trustee) organized under the laws of the United
States or any State, the deposits of which are insured to the full extent
permitted by law by the FDIC which is subject to supervision and examination by
Federal or State authorities and whose short-term deposits have been rated P-1
by Moody's (if rated by Moody's) and F-1 by Fitch (if rated by Fitch) or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by both Moody's (if rated by Moody's) and Fitch (if rated by Fitch).
"Eligible Investment" means 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
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or trust company are rated at least F-1+ by Fitch (if rated by Fitch) 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 FDIC;
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act
of 1933 and have a rating of AAA by each of the Rating Agencies, and whose
only investments are in securities described in clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which at the time of such investment has a credit rating
of at least AA from each of the Rating Agencies that has rated the
corporation; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount of securities
issued by such corporation and held as part of the corpus of the Trust to
exceed 10% of amounts held in the Certificate Account;
(vi) commercial paper having a rating of at least F-1+ from Fitch
(if rated by Fitch) and at least P-1 from Moody's (if rated by Moody's) at
the time of such investment;
(vii) money market funds rated at least Aa2 by Moody's; and
(viii) other obligations or securities that are acceptable to each of
the Rating Agencies as an Eligible Investment hereunder and will not reduce
the rating assigned to the Certificates by each of the Rating Agencies
below the lower of the then-current rating or the rating assigned to the
Certificates as of the Closing Date by each of the Rating Agencies, as
evidenced in writing;
provided that, with respect to Eligible Investments in the Certificate Account,
any such investment must constitute a "cash flow investment" within the meaning
of the REMIC Provisions.
"Event of Termination" has the meaning assigned in Section 7.01 of the
Pooling and Servicing Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, a corporate
instrumentality of the United States, or any successor thereto.
"Federal Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
"Final Payment Date" has the meaning given in Section 10.04(a).
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"Fitch" means Fitch, Inc., or any successor thereto; provided that, if
Fitch no longer has a rating outstanding on the Certificates, then references
herein to "Fitch" shall be deemed to refer to the NRSRO then rating the
Certificates (or, if more than one such NRSRO is then rating the Certificates,
to such NRSRO as may be designated by the Servicer), and references herein to
ratings by or requirements of Fitch shall be deemed to have the equivalent
meanings with respect to ratings by or requirements of such NRSRO.
"Formula Distribution Amount" means, for any Payment Date, the sum of the
amounts described in clauses (i) and (ii) of Section 5.03(b)(2).
"Independent" means, when used with respect to any specified Person, any
Person who (i) is in fact independent of the Depositor, the Servicer and the
Originator, (ii) does not have any direct financial interest or any material
indirect financial interest in the Depositor, the Servicer, the Originator or an
Affiliate of the Depositor, the Originator or the Servicer, and (iii) is not
connected with the Depositor, the Originator or the Servicer as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions. Whenever it is provided herein that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such opinion or
certificate shall state that the signatory has read this definition and is
Independent within the meaning set forth herein.
"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 Reserve Account 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 Reserve Account Loans, whether through
repossession, foreclosure sale or otherwise.
"List of Loans" means the list of Reserve Account Loans attached hereto as
Exhibit D.
"Loan File" means, as to each Reserve Account Loan, (a) the original
promissory note (or executed lost note affidavit, together with a copy of the
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 Reserve Account Loan was originated by
a lender or contractor other than the Originator, the original or a copy of an
assignment of the mortgage, deed of trust or security deed by such lender or
contractor to the Depositor, (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.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor thereto;
provided that, if Moody's no longer has a rating outstanding on the
Certificates, then references herein to "Xxxxx'x" shall be deemed to refer to
the NRSRO then rating the Certificates (or, if more than one such NRSRO is then
rating the Certificates, to such NRSRO as may be designated by the
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Servicer), and references herein to ratings by or requirements of Xxxxx'x shall
be deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
"Net REO Proceeds" has the meaning given in Section 5.07(a).
"NRSRO" means nationally recognized statistical rating organization.
"Obligor" means the person who owes payments under a Reserve Account Loan.
"Officer's Certificate" means a certificate signed by any Responsible
Officer of any Person delivering such certificate 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 Depositor
or the Servicer, as applicable, acceptable to the Trustee, the Originator and
the Depositor.
"Original Principal Balance" means $7,718,000.
"Originator Payment Obligation" means the obligation of the Originator to
deposit Net REO Proceeds in the Reserve Account as described in Section 5.07(a).
"Paying Agent" means the Paying Agent specified in Section 5.04(c) hereof.
"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 June 2001.
"Percentage Interest" means, as to any Certificate or the Class C
Certificate, the percentage interest evidenced thereby in distributions made on
the Certificates and Class C Certificate, respectively, such percentage interest
being equal to: (i) as to any Certificate, the percentage (carried to eight
places) obtained from dividing the denomination of such Certificate by the
Original Principal Balance, and (ii) as to the Class C Certificate, the
percentage specified on the face of such Certificate. The aggregate Percentage
Interests for the Certificates and the Class C Certificate shall equal 100%,
respectively.
"Permitted Transferee" means, in the case of a transfer of a Class B-2
Certificate or the Class C Certificate, a Person that is not a Plan or a
Disqualified Organization, except as permitted by Sections 4.02(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 4.02(b)(2).
"Pooling And Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of May 1, 2001, by and among Conseco Finance Corp., as the
Originator and Servicer, CFSC,
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as Seller, and U.S. Bank Trust National Association, as Trustee, with respect to
the Conseco Finance Home Equity and Home Improvement Loan Trust 2001-B.
"Purchase Agreement" means the Purchase Agreement dated May 23, 2001, among
the Originator, the Depositor, CFSC and the Purchaser, relating to the purchase
and sale of the Certificates.
"Purchaser" means Deutsche Banc Alex. Xxxxx Inc.
"Rating Agencies" means, collectively, Xxxxx'x and Fitch.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date.
"Related Documents" means the Pooling and Servicing Agreement and the
Contribution Agreement.
"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" has the meaning given in Section 5.07(a).
"Reserve Account" means the segregated trust account established under
Section 5.05(a).
"Reserve Account Collateral" has the meaning given in Section 5.05(c).
"Reserve Account Loan" means each of the home equity loans and home
improvement loans identified on Exhibit D hereto, including without limitation
all related mortgages, deeds of trust and security deeds and any and all rights
to receive payments due pursuant thereto.
"Reserve Account Required Amount" means, for any Payment Date (after giving
effect to distributions under Section 5.03(b) on such Payment Date), the lesser
of $4,116,000 and the Certificate Principal Balance.
"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.
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"S&P" means Standard & Poor's Ratings Services, a division of The XxXxxx-
Xxxx Companies, Inc., or any successor thereto.
"Servicer" means the Originator until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII of the
Pooling and Servicing Agreement and Section 8.11 of this Agreement.
"Service Transfer" has the meaning assigned in Section 8.11(a).
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Reserve Account 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.
"Tax Return" means the federal income tax return to be filed on behalf of
the Trust together with any and all other information reports or returns that
may be required to be furnished to the Holders of the Certificates or filed with
the Internal Revenue Service as any other governmental taxing authority under
any applicable provision of federal, state or local tax laws.
"Terms Agreement" means the Terms Agreement dated as of May 23, 2001, among
the Originator, the Depositor and the Purchaser, relating to the Purchase
Agreement and the purchase and sale of the Certificates.
"Transfer Agreement" means the Transfer Agreement dated as of May 1, 2001
between Conseco Finance Corp. as seller, and the Depositor as purchaser, of the
Class B-2 Underlying Certificate.
"Trust" means the trust created under this Agreement and known as Conseco
Finance Trust HE/HI 2001-B-2.
"Trust Property" means the property and proceeds of every description
conveyed pursuant to Section 2.01, the Originator Payment Obligation, the
Reserve Account and the Certificate Account, including all Eligible Investments
therein and all proceeds thereof, and the Reserve Account Collateral to the
extent of the Trustee's interest therein pursuant to Section 5.05.
"Trustee" means U.S. Bank Trust National Association.
"Unpaid Class B-2 Interest Shortfall" means, for 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.
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ARTICLE II.
ESTABLISHMENT OF TRUST; TRANSFER OF LOANS
-----------------------------------------
SECTION 2.01 Closing.
a. There is hereby created, by the Depositor as settlor, a separate trust
which shall be known as Conseco Finance Trust HE/HI 2001-B-2. The Trust shall be
administered pursuant to the provisions of this Agreement for the benefit of the
Certificateholders.
b. The Depositor hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee on behalf of the Trust all the right, title and interest
of the Depositor in and to the Class B-2 Underlying Certificate, all payments in
respect of the Class B-2 Underlying Certificate, and all funds or assets as are
from time to time deposited in the Certificate Account.
c. The conveyance pursuant to Section 2.01(b) is intended by the Depositor
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 Depositor and would not be includable in the estate of
the Depositor or the Originator for purposes of Section 541 of the Federal
Bankruptcy Code. If such conveyance is deemed to be a loan, the parties intend
that the rights and obligations of the parties to such property shall be
established pursuant to the terms of this Agreement and that the Depositor shall
be deemed to have granted to the Trustee, and the Depositor does hereby grant to
the Trustee, a perfected first-priority security interest in the Trust Property
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
Depositor shall deliver or cause to be delivered the following documents to the
Trustee:
a. The Class B-2 Underlying Certificate, endorsed to the Trustee.
b. Opinions of Counsel for the Originator and the Depositor in form
satisfactory to the Trustee, the Purchaser and the Rating Agencies.
c. With respect to each of the Depositor and the Originator, respectively,
copies of its articles or certificate of incorporation, bylaws and resolutions
of its board of directors approving the execution, delivery and performance of
this Agreement and the transactions contemplated hereunder, certified in each
case by its secretary or assistant secretary.
d. Officially certified recent evidence of good standing of the Originator
under the laws of the State of Minnesota and the State of Delaware and of the
Depositor under the laws of the State of Minnesota.
e. An Officer's Certificate listing the Servicer's Servicing Officers.
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f. Evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy.
g. Evidence of deposit in the Reserve Account of all funds received with
respect to the Reserve Account 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.
h. The Loan Files for the Reserve Account Loans and an Officer's
Certificate confirming that the Depositor has reviewed the original of each
Reserve Account Loan and each related Loan File, that each such Reserve Account
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).
i. Evidence of the deposit of $625,000 in the Reserve Account.
j. A UCC-1 Financing Statement covering the Reserve Account Collateral
identifying the Depositor as debtor and the Trustee as secured party.
k. A copy of the executed Contribution Agreement.
l. Letters from each of the Rating Agencies evidencing ratings for the
Certificates as required by the offering circular relating to the Certificates.
m. An executed copy of the Transfer Agreement.
n. A letter acceptable to the Purchaser from PricewaterhouseCoopers LLP or
another nationally recognized accounting firm, stating that such firm has
reviewed the Reserve Account Loans on a statistical sampling basis and setting
forth the results of such review.
SECTION 2.03 Acceptance by Trustee.
a. On the Closing Date, if the conditions set forth in Section 2.02 have
been satisfied, the Trustee shall deliver a certificate to the Depositor
substantially in the form of Exhibit E hereto (an "Acknowledgment")
acknowledging conveyance of the Trust Property to the Trustee and the Trustee
shall promptly cause the registration in its name of the Class B-2 Underlying
Certificate in accordance with Section 9.02 of the Pooling and Servicing
Agreement. In consideration of the assignment of the Trust Property to it, the
Trustee has issued on the Closing Date, to or upon the order of the Depositor,
the Certificates and the Class C Certificate representing, in the aggregate,
ownership of the entire beneficial interest in the assets of the Trust
comprising the REMIC.
b. The Trustee or a Custodian shall review each Loan File, as described in
Exhibit E, within 60 days of the Closing Date or later receipt by it of the Loan
File. If, in its review of the Loan Files, the Trustee or a Custodian discovers
a breach of the representations or warranties set forth in Section 3.05, the
Trustee or Custodian, as the case may be, shall notify the Originator and the
Originator shall cure such breach or repurchase such Reserve Account Loan
pursuant to Section 4.2 of the Contribution Agreement.
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SECTION 2.04 REMIC Provisions.
a. The 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, excluding the Reserve Account and the
Originator Payment Obligation, 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
Depositor or the Servicer), the Depositor 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 Section 860G of the Code) other
than the interests represented by the Certificates and the Class C Certificate.
b. The Certificates are being issued in one class. The following terms of
the Certificates are irrevocably established as of the Closing Date:
Original
Principal
Class Pass-Through Rate Per Annum Balance
------------ ---------------------------------------- -----------
Class B-2 The Pass-Through Rate on the Class B-2 $7,718,000
Underlying Certificate, which equals the
least of the Group I Adjusted Weighted
Average Loan Rate, the Group II Weighted
Average Loan Rate, and 9.851%.
The Class C Certificate is being issued in a single Class and is hereby
designated by the Depositor as constituting the sole class of "residual
interests" in the REMIC for purposes of Section 860G(a)(2) of the Code.
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
Depositor nor any Servicer shall (i) accept any contribution of assets to the
Trust, (ii) dispose of any portion of the Trust, (iii) engage in any transaction
that would result in the imposition of any tax on "prohibited transactions," as
defined in Section 860F(a)(1) of the Code, (iv) accept any contribution after
the Closing Date that is subject to the tax imposed by Section 860G(d) of the
Code or (v) engage in any activity or enter into any agreement that would result
in the receipt by the Trust of any "net income from foreclosure 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
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shall have received an unqualified Opinion of Counsel, which opinion shall not
be an expense of the Trust, stating that such action will not, directly or
indirectly, (A) adversely affect the status of the REMIC as a REMIC or the
status of the Certificates and Class C Certificate as "regular interests" and
the sole class of "residual interests," respectively, in the REMIC, in each case
for federal income tax purposes, (B) affect the distributions payable hereunder
to the Certificateholders or (C) result in the imposition of any lien, charge or
encumbrance upon the Trust.
SECTION 2.05 Transfer of Reserve Account Loan On or prior to the Closing
Date, the Originator shall deliver the Loan Files to the Trustee. The Trustee
shall maintain the Loan Files at its office or with a duly appointed 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 8.07.
The Originator has filed a form UCC-1 financing statement regarding the sale of
the Reserve Account 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.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
------------------------------
OF THE DEPOSITOR, THE SERVICER, THE ORIGINATOR AND THE TRUSTEE
--------------------------------------------------------------
SECTION 3.01 Representations and Warranties of the Depositor. The Depositor
hereby represents and warrants to the Trustee and the Holders that as of the
Closing Date:
a. Organization and Good Standing. The Depositor 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 Depositor 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 Depositor.
b. Authorization; Binding Obligations. The Depositor has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and 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. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Depositor 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 Depositor 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 Depositor will not violate any provision of any existing law or
regulation or any order or decree of any court or the Articles of Incorporation
or Bylaws of the Depositor, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Depositor is a party or by
which the Depositor 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 Depositor threatened, against the Depositor or any of its
properties or with respect to this Agreement, which, if adversely determined,
would in the opinion of the Depositor have a material adverse effect on the
transactions contemplated by this Agreement.
SECTION 3.02 Representations and Warranties of the Servicer. The Servicer
hereby represents and warrants to the Trustee and the Holders that as of the
Closing Date:
a. Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and
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has the corporate power to own its assets and to transact the business in which
it is currently engaged. The Servicer 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 Servicer.
b. Authorization; Binding Obligations. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and 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. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer 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 Servicer 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 Servicer 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 Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Servicer is a
party or by which the Servicer 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 Servicer threatened, against the Servicer or any of its properties or
with respect to this Agreement, which, if adversely determined, would in the
opinion of the Servicer have a material adverse effect on the transactions
contemplated by this Agreement.
SECTION 3.03 Representations and Warranties of the Trustee. The Trustee
hereby represents and warrants to the Holders, the Originator, the Depositor and
the Servicer that as of the Closing Date:
a. Organization and Good Standing. It is a banking corporation duly
organized and validly existing in good standing under the laws of the United
States. It has all requisite corporate power and authority and all franchises,
grants, authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations under this
Agreement.
b. Authorization; Binding Obligations. It has taken all corporate action
necessary to authorize the execution and delivery by it of this Agreement and
each Related Document to which the Trust is a party, and this Agreement and each
Related Document will be executed and
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delivered by one of its officers who is duly authorized to execute and deliver
this Agreement on its behalf. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Trustee 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 Violations. Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any Federal or Minnesota law, governmental rule or regulation governing the
banking or trust powers of the Trustee or any judgment or order binding on it,
or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound or result in the creation or
imposition of any lien, charge or encumbrance on the Trust Property resulting
from actions by or claims against the Trustee individually which are unrelated
to this Agreement or the Related Documents.
SECTION 3.04 Negative Covenants of the Trust. Except as otherwise expressly
permitted by this Agreement, the Trust shall not:
a. sell, transfer, exchange or otherwise dispose of any of the assets of
the Trust;
b. dissolve or liquidate in whole or in part;
c. engage, directly or indirectly, in any business other than that arising
out of the issue of the Certificates, and the actions contemplated or required
to be performed under this Agreement;
d. incur, create or assume any indebtedness for borrowed money other than
the Certificates;
e. voluntarily file a petition for bankruptcy, reorganization, assignment
for the benefit of creditors or similar proceeding; or
f. merge, convert or consolidate with any other Person.
SECTION 3.05 Representations and Warranties of the Originator. The
Originator hereby represents and warrants to the Trustee and the Holders that as
of the Closing Date the representations in Schedule 3.1 of the Contribution
Agreement, pertaining to the Reserve Account Loans, are true. The repurchase
obligations of the Originator set forth in Section 4.2(a) of the Contribution
Agreement are the sole remedies available to the Trust or the Certificateholders
for a breach of this representation.
SECTION 3.06 Covenants of Depositor. The Depositor covenants and agrees as
follows:
a. Maintenance of Depositor Assets. The Depositor shall not issue any
dividends, redeem any outstanding capital stock, grant any liens on its assets
(other than pursuant to this Agreement or similar agreements) or in any way
deplete corporate assets if, as a result of such
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issuance, redemption or depletion, the total net assets of the Depositor are
less than the sum of (a) the Reserve Account Required Amount and (b) the
Depositor's obligations under other agreements similar to this Agreement, plus
any income taxes then payable by the Depositor and the Depositor's foreseeable
administrative and operating expenses for the next year.
b. Limitation of Certain Actions. The Depositor will not, without the
unanimous agreement of its Board of Directors and the written consent of the
Trustee, take any of the following actions:
(i) Except as permitted by its Articles of Incorporation,
engage in any business, pledge assets for the benefit of any other
Person, make any loans or advances to any Person, guarantee or become
obligated for the debts of any other Person, or hold out its credit as
being available to satisfy the obligations of others;
(ii) voluntarily dissolve or liquidate;
(iii) commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consent
to the entry of any order for relief in an involuntary case under any
such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Depositor or for any substantial part of
its property, or make any general assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts as they
become due, or take any corporate action in furtherance of the
foregoing;
(iv) consolidate or merge with or into any other Person;
(v) delete or amend Articles 3, 5, 6 or 8 of its Articles of
Incorporation;
(vi) commingle assets with those of any other Person; or
(vii) acquire obligations or securities of the Originator or any
other shareholder of the Depositor except as contemplated by this
Agreement.
c. Required Actions. The Depositor shall (unless excused by unanimous
agreement of its Board of Directors and the written consent of the Trustee) take
the following actions:
(i) maintain books, records, accounts and financial statements
separate from any other Person;
(ii) conduct its own business in its own name, pay its own
liabilities out of its own funds (including paying the salaries of its
own employees) and maintain adequate capital in light of its
contemplated business operations;
(iii) hold appropriate meetings of its Board of Directors to
authorize its corporate actions, keep minutes of its meetings, and
observe all corporate formalities required by state and federal
statutes; and
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(iv) hold itself out as a separate entity and correct any known
misunderstanding regarding its separate identity.
d. Other Transactions. If the Depositor provides any partial guaranty or
other form of credit enhancement with respect to any pool of loans or securities
other than pursuant to this Agreement, the Depositor must obtain written
confirmation, from each of Fitch and Xxxxx'x, that providing such other credit
enhancement will not cause a reduction or withdrawal of such Person's ratings of
the Class B-2 Certificates.
e. Notices to Rating Agencies. The Depositor shall provide prompt written
notice to each of Fitch and Xxxxx'x of any amendment to the Depositor's Articles
of Incorporation.
f. Merger or Consolidation of the Depositor. The Depositor shall keep in
full effect its existence, rights and franchises as a corporation and shall
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement. Any person into which
the Depositor may be merged or consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Depositor shall be a party,
or any Person succeeding to all or substantially all of the business of the
Depositor, shall be the successor of the Depositor hereunder, 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.
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ARTICLE IV.
THE CERTIFICATES AND THE CLASS C CERTIFICATE
--------------------------------------------
SECTION 4.01 The Certificates and the Class C Certificate. The Class B-2
Certificates and the Class C Certificate shall be substantially in the forms set
forth in Exhibits A and B, respectively, 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 B-2 Certificates shall be evidenced by one or more Class
B-2 Certificates evidencing $7,718,000 in Certificate Principal Balance,
beneficial ownership of the Certificates to be held through Book-Entry
Certificates in minimum dollar denominations of $1,000 and integral multiples of
$1.00 in excess thereof. The Class C Certificate shall be evidenced by a single
Class C Certificate issued on the Closing Date to Green Tree Finance Corp.-Two
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 4.02 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 10.03 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and the Class C Certificate
and of transfers and exchanges of Certificates and the Class C Certificate as
herein provided. The Trustee initially appoints itself to be the "Certificate
Registrar" and transfer agent for the purpose of registering Certificates and
the Class C Certificate and transfers and exchanges of Certificates and the
Class C Certificate as provided herein. The Trustee will give prompt written
notice to Certificateholders, the Class C Certificateholder and the Servicer of
any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class B-2
Certificate or a Class C Certificate shall be made by the Depositor 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
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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, the Depositor or the Originator, and (B) the Trustee shall
require the transferee to execute an investment letter substantially in the form
of Exhibit G attached hereto, which investment letter shall not be an expense of
the Trustee, the Depositor or the Originator. The Class B-2 Certificateholder or
Class C Certificateholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor 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-2 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, at its expense, delivers to the Originator and the
Trustee, an Opinion of Counsel in form satisfactory to the Originator and the
Trustee that the purchase and holding of such Class B-2 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
Depositor or the Servicer to any obligation or liability in addition to those
undertaken in this Agreement. Unless such opinion is delivered and in the case
of Definitive Certificates, each person acquiring such a Certificate or Class C
Certificate will be deemed to represent to the Trustee, the Originator, the
Depositor 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, the Depositor or the
Servicer to any obligation or liability in addition to those undertaken in this
Agreement.
(3) Notwithstanding anything to the contrary contained herein, (A) no
Class C Certificate, nor any interest therein, shall be transferred, sold or
otherwise disposed of to a "disqualified organization," within the meaning of
Section 860E(e)(5) of the Code (a "Disqualified Organization"), including, but
not limited to, (i) the United States, a state or political subdivision thereof,
a foreign government, an international organization or an agency or
instrumentality of any of the foregoing, (ii) an organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the taxes
imposed by Chapter 1 of the Code and not subject to the tax imposed on unrelated
business income by Section 511 of the Code, or (iii) a cooperative described in
Section 1381(a)(2)(C) of the Code, and (B) prior to any registration of any
transfer, sale or other disposition of a Class C Certificate, the proposed
transferee shall deliver to the Trustee, under penalties of perjury, an
affidavit that such transferee is not a Disqualified Organization, with respect
to which the Trustee shall have no actual knowledge that such affidavit is
false, and the transferor and the proposed transferee shall each deliver to the
Trustee an affidavit with respect to any other information reasonably required
by the Trustee pursuant to the REMIC Provisions, including, without limitation,
information regarding the transfer of noneconomic residual interests and
transfers of any residual interest to or by a foreign person; provided, however,
that, upon the delivery to the Trustee of an Opinion of Counsel, in form and
substance satisfactory to the Trustee and rendered by Independent counsel,
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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
4.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance with the
provisions of this Section 4.02(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, 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 making the
exchange is entitled to receive. Every Certificate or Class C Certificate
presented or surrendered for transfer or exchange shall be duly endorsed by, or
shall be accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by, the holder thereof
or his or her attorney duly authorized in writing.
d. Except as provided in paragraph (e) below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of such Certificates for purposes of
exercising the rights of Holders under
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this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (vi) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
e. If (x)(i) the Depositor 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 Depositor 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 B-2 Certificate in registered form registered in the name
of the Depository's nominee, Cede & Co., the total face amount of which
represents 100% of the Certificate Principal Balance. 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."
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g. Each of the Certificates and the Class C Certificate shall be a
"security" for purposes of Section 8-102(a)(15) 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 4.03 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. Each Certificate and Class C Certificate surrendered for transfer
and exchange shall be disposed of in a manner approved by the Trustee.
SECTION 4.04 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 4.04,
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 4.04 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 4.05 Persons Deemed Owners. Prior to due presentation of a
Certificate or Class C Certificate for registration of transfer, the Servicer,
the Originator, the Depositor, 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 5.03
and for all other purposes whatsoever, and none of the Servicer, the Originator,
the Depositor, the Trustee, the Paying Agent, the Certificate Registrar or any
agent of the Servicer, the Originator, the Depositor, the Trustee, the Paying
Agent or the Certificate Registrar shall be affected by notice to the contrary.
SECTION 4.06 Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar will furnish to the Trustee and the Servicer, within
five days after receipt by the Certificate Registrar of a request therefor from
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders as of the most
recent Record Date. If Holders of Certificates representing, in the aggregate,
25% or more of the 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 with respect to
their rights under this Agreement or under the
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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 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, by receiving and holding a Certificate or a
Class C Certificate, agrees with the Certificate Registrar and the Trustee that
none of the Depositor, 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 hereunder, regardless of the source from
which such information was derived.
SECTION 4.07 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 V.
ACCOUNTS; PAYMENTS TO CERTIFICATEHOLDERS;
-----------------------------------------
ORIGINATOR PAYMENT OBLIGATION
-----------------------------
SECTION 5.01 Collection of Money. Except as otherwise expressly provided
herein, the Trustee shall demand payment or delivery of all money and other
property payable to or receivable by the Trustee pursuant to this Agreement or
the Class B-2 Underlying Certificate. The Trustee shall hold all such money and
property received by it as part of the Trust Property and shall apply it as
provided in this Agreement.
SECTION 5.02 Establishment of Certificate Account.
a. On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust. The Certificate Account shall be an
Eligible Account. The Certificate Account shall be identified as follows: "U.S.
Bank Trust National Association, as Trustee under the Trust Agreement for
Conseco Finance Trust HE/HI 2001-B-2, dated as of May 1, 2001."
b. The Trustee shall possess all right, title and interest in all funds on
deposit from time to time in the Certificate Account and in all proceeds
thereof. If, at any time, the Certificate Account ceases to be an Eligible
Account, the Trustee shall within 5 Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency may consent) establish a
new Certificate Account as an Eligible Account and shall transfer any cash
and/or any investments to such new Certificate Account.
c. All amounts held in the Certificate Account shall, to the extent
permitted by applicable laws, rules and regulations, be invested by the Trustee
in Eligible Investments pursuant to the written instructions of the Servicer
that mature not later than one Business Day prior to the Payment Date to which
such amounts relate. Investments in Eligible Investments shall be made in the
name of the Trust, and such investments shall not be sold or disposed of prior
to their maturity. 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. (S) 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. (S) 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
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a confirmation thereof, and (3) with respect to repurchase obligations held in
such account, such repurchase obligations shall be identified by such
institution, by book entry or otherwise, as held for the account of, or pledged
to, the Trustee on the records of such institution, and the related securities
shall be held in accordance with the requirements of clause (2) above. Once such
funds are invested, such institution shall not change the investment of such
funds. Funds in the Certificate Account not so invested must be insured to the
extent permitted by law by the FDIC. Losses, if any, realized on amounts in the
Certificate Account invested pursuant to this paragraph shall first be credited
against undistributed investment earnings on amounts in the Certificate Account
invested pursuant to this paragraph, and shall thereafter be deemed to reduce
the amount on deposit in the Certificate Account. The Servicer and the Trustee
shall not be liable for the amount of any loss incurred in respect of any
investment, or lack of investment, of funds held in the Certificate Account.
Subject to the other provisions hereof, the Trustee shall have sole control over
each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment, if any, shall be delivered directly
to the Trustee or its agent, together with each document of transfer, if any,
necessary to transfer title to such investment to the Trustee in a manner which
complies with this Section 5.02. All income and gain from such investments (net
of investment losses) shall be added to the Certificate Account and distributed
on each Payment Date pursuant to Section 5.03. Losses, if any, realized on
amounts in the Certificate Account invested pursuant to this paragraph shall
first be credited against undistributed investment earnings on amounts in the
Certificate Account invested pursuant to this paragraph, and shall thereafter be
deemed to reduce the amount on deposit in the Certificate Account and otherwise
available for distribution to Certificateholders pursuant to this Article V. The
Depositor, 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 FDIC. The Trustee may trade with itself or an Affiliate in the
purchase or sale of such Eligible Investments.
SECTION 5.03 Withdrawals and Application of Funds in Certificate Account.
a. The Trustee shall deposit in the Certificate Account the Distribution
Amount for the Class B-2 Underlying Certificate as and when paid to the Trustee
and any amount withdrawn from the Reserve Account pursuant to Section 5.06(a).
The Trustee shall, from time to time as provided herein, make withdrawals from
the amounts on deposit in the Certificate Account for the following purposes:
(i) to make disbursements in accordance with Section 5.03(b)
and Section 10.04;
(ii) to withdraw amounts that have been deposited to the
Certificate Account in error; and
(iii) to reimburse the Servicer for amounts described in Sections
6.06 and 7.06.
b. From amounts on deposit in the Certificate Account on any Payment Date
(after withdrawals pursuant to Section 5.03(a)), the Trustee shall, based on the
information provided by the Servicer pursuant to Section 6.01 hereof and
information furnished to the Trustee as holder of
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the Class B-2 Underlying Certificate, make distributions in the following order
of priority on such Payment Date:
1. To the Servicer, if other than the Originator or an Affiliate of
the Originator, a servicing fee equal to that agreed upon pursuant to
Section 8.12, but not in excess of 1/12 of 0.5% of the lesser of the
Certificate Principal Balance and $4,116,000, and such other compensation
as may be owing under Section 8.08;
2. To the Class B-2 Certificateholders on a pro rata basis,
(i) one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding June 15,
2001) at the Class B-2 Pass-Through Rate on the Certificate Principal
Balance plus the Unpaid Class B-2 Interest Shortfall, if any; and
(ii) principal in an amount equal to the sum of (A) the Class B-
2 Formula Principal Distribution Amount less the Class B-2 Holdback
and (B) the Class B-2 Liquidation Loss Principal Amount (as each such
term is defined in the Pooling and Servicing Agreement in respect to
the Class B-2 Underlying Certificate), but in no event more than the
Certificate Principal Balance; and
(iii) additional principal in an amount equal to the excess, if
any, of the amount available for distribution under this Section
5.03(b)(2) over amounts distributed pursuant to clauses (1), 2(i) and
(2)(ii) of this Section 5.03(b), but in no event more than the
Certificate Principal Balance;
3. To the Servicer (if the Originator or an Affiliate of the
Originator), a servicing fee equal to 1/12 of 0.5% of the lesser of the
Certificate Principal Balance and $4,116,000 and, if the Servicer is not
the Originator or an Affiliate of the Originator, to the Servicer such
additional compensation as may be agreed upon pursuant to Section 8.12;
4. To reimburse the Class C Certificateholder for expenses incurred
by and reimbursable to it pursuant to Section 6.06; and
5. To the Class C Certificateholder.
SECTION 5.04 Method of Payment.
a. Subject to the terms of this Article V, each Holder of a Certificate or
the Class C Certificate as of a Record Date shall be paid on the next succeeding
Payment Date by check mailed to such Certificateholder at the address for such
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 Percentage Interest of the
Distribution Amount for its Class. 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.
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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
Originator nor the Depositor 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 Exhibit A hereto, and the Class C
Certificate as set forth in Exhibit B 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 required hereunder. The
Trustee's corporate trust operations department, with an office at 000 Xxxx
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Xxxxxx Xxxxxxx-
Xxxx, shall initially act as Paying Agent. The Trustee shall require the Paying
Agent (if other than the Trustee) to agree in writing that all amounts held by
the Paying Agent for payment hereunder will be held in trust for the benefit of
the Certificateholders and 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.
SECTION 5.05 Establishment, Investment and Pledge of Reserve Account.
a. On or prior to the Closing Date, the Depositor shall establish for the
benefit of the Holders of the Class B-2 Certificates a segregated trust account
referred to in this Agreement as the "Reserve Account" bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Holders of the Class B-2 Certificates. The Reserve Account shall
be an Eligible Account. It shall be under the sole dominion and control of the
Trustee. Except as otherwise provided in this Agreement, the Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Reserve Account and in all proceeds thereof. The Reserve Account shall be
maintained in the name of the Trustee and designated "U.S. Bank Trust National
Association, as Trustee, on behalf of the Holders of the Class B-2 Certificates
issued by Conseco Finance Trust HE/HI 2001-B-2 (Reserve Account, Conseco HE/HI
2001-B-2, Inc., Depositor)." Amounts shall be withdrawn from the Reserve Account
only in accordance with the provisions of Section 5.06. No passbook, certificate
of deposit or other similar instrument evidencing the Reserve Account shall be
issued, and all contracts, receipts and other papers governing or evidencing the
Reserve Account or any of the Eligible Investments of funds therein shall be
delivered to the Trustee. The Trustee on behalf of the Class B-2 Certificates
shall be the legal owner of the Reserve Account. The Depositor shall be the
beneficial owner of the Reserve Account, subject to the power of the Trustee to
release funds from the Reserve Account pursuant to the terms of this Agreement.
All income or loss on funds held in the Reserve Account and in respect of the
Reserve Account Loans and Collateral Security shall be taxable to the Depositor.
The Reserve Account is a segregated trust account and is part
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of the Trust but not part of the REMIC. For federal income tax purposes, the
Reserve Account shall be owned by the Depositor.
b. The Trustee shall at the written direction of the Servicer invest the
funds in the Reserve Account in Eligible Investments that mature on or before
the Business Day prior to each Payment Date. Any investment of funds in the
Reserve 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. (S) 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. (S) 8-102(5)) in the State of New York, registered in the
name of such clearing corporation or its nominee, not endorsed for collection or
surrender or any other purpose not involving transfer, not containing any
evidence of a right or interest inconsistent with the Trustee's security
interest therein, and held by such clearing corporation in an account of such
institution, (C) held in an account of such institution with the Federal Reserve
Bank of New York or the Federal Reserve Bank of Minneapolis, or (D) in the case
of uncertificated securities, issued in the name of such institution, and (iii)
identified, by book entry or otherwise, as held for the account of, or pledged
to, the Trustee on the records of such institution, and such institution shall
have sent the Trustee a confirmation thereof, and (3) with respect to repurchase
obligations held in such account, such repurchase obligations shall be
identified by such institution, by book entry or otherwise, as held for the
account of, or pledged to, the Trustee on the records of such institution, and
the related securities shall be held in accordance with the requirements of
clause (2) above. Once such funds are invested, such institution shall not
change the investment of such funds. Funds in the Reserve Account not so
invested must be insured to the extent permitted by law by the FDIC. Losses, if
any, realized on amounts in the Reserve Account invested pursuant to this
paragraph shall first be credited against undistributed investment earnings on
amounts in the Reserve Account invested pursuant to this paragraph, and shall
thereafter be deemed to reduce the amount on deposit in the Reserve Account. The
Depositor and the Trustee shall not be liable for the amount of any loss
incurred in respect of any investment, or lack of investment, of funds held in
the Reserve Account.
c. To secure the payment on each Payment Date of any Class B-2 Shortfall
on such Payment Date, subject to the limit of the amount available in the
Reserve Account plus any subsequent deposits into the Reserve Account, the
Depositor hereby pledges, assigns, hypothecates, transfers and delivers to the
Trustee (for the benefit of the Class B-2 Certificateholders), and hereby grants
the Trustee (for the benefit of the Class B-2 Certificateholders) a security
interest in, all of the Depositor's right, title, interest and power, free and
clear of any other interest, in, to and with respect to, the following
(collectively, the "Reserve Account Collateral"):
(i) The Reserve Account Loans;
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(ii) (A) all rights under any hazard, flood or other individual
insurance policy on the real estate securing each Reserve Account Loan
for the benefit of the owner of such Reserve Account Loan, (B) all
rights the Originator may have against the originating lender or
contractor with respect to each Reserve Account Loan originated by a
lender or contractor other than the Originator, (C) all rights under
the Errors and Omissions Protection Policy and the Fidelity Bond as
such policy and bond relate to the Reserve Account Loans, (D) all
rights under any title insurance policies, if applicable, on any of
the properties securing Reserve Account Loans, and (E) proceeds and
products of the foregoing (the "Collateral Security");
(iii) the Contribution Agreement;
(iv) the Reserve Account, the amounts deposited therein, the
investments thereof and all proceeds of the liquidation of any
investment thereof; and
(v) all proceeds of the foregoing.
d. The Depositor and the Trustee shall maintain at all times during the
term of this Agreement, except as otherwise expressly provided in this Section
5.05(d), the lien on, or security interest in, the Reserve Account Collateral as
a valid and perfected security interest of first priority under the Uniform
Commercial Code (or other applicable law) as in effect from time to time.
Amounts properly withdrawn by the Trustee and paid into the Certificate Account
pursuant to Section 5.03(b) or properly withdrawn by the Trustee and paid to the
Depositor pursuant to Section 5.03(b) shall be deemed released from the
provisions of this Section 5.05 and the security interest established by this
Section 5.05, and the Depositor shall in no event be required to refund any such
distributed amount.
e. All payments on or in respect of the Reserve Account Loans or any
other Reserve Account Collateral, and all income and gain realized from any
investments of amounts in the Reserve Account as well as any interest earned on
deposits in the Reserve Account, shall be deposited in the Reserve Account.
f. On the Closing Date the Depositor has delivered to the Trustee for
deposit in the Reserve Account $625,000 from the proceeds of the sale of the
Certificates.
SECTION 5.06 Withdrawals from Reserve Account. Withdrawals from the
Reserve Account will be made only by the Trustee and only on the terms of this
Section 5.06.
a. On each Payment Date the Trustee shall withdraw from the Reserve
Account (to the extent of funds on deposit), and shall deposit in the
Certificate Account, any amount by which the amount available for distribution
under Section 5.03(b) is less than the sum of the Formula Distribution Amount
for the Certificates and the servicing fees payable under Sections 5.03(b)(1)
and (3).
b. On each Payment Date after the Originator certifies to the Trustee,
under Section 5.07(b), that all REO has been sold and aggregate Net REO Proceeds
are less than $625,000, the
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Trustee shall withdraw from the Reserve Account and pay to the Depositor (to the
extent of funds on deposit following any withdrawal under Section 5.06(a) on
such Payment Date), the excess of $625,000 over aggregate Net REO Proceeds less
amounts paid to the Depositor on prior Payment Dates under this Section 5.06(b);
provided that if any Rating Agency has rated the Certificates Caaa, CCC+ or
lower, or has withdrawn its rating on the Certificates, the aggregate amount
paid to the Depositor under this Section shall not exceed $425,000.
c. If on any Payment Date the amount in the Reserve Account exceeds the
Reserve Account Required Amount following withdrawals under Sections 5.06(a) and
5.06(b) on such Payment Date, the Trustee shall withdraw the excess from the
Reserve Account and pay it to the Depositor.
d. Upon the payment in full of the Certificates, the Trustee will pay to
the Depositor any amount remaining in the Reserve Account and will release from
the lien of this Agreement, and deliver to the Depositor, all Reserve Account
Loans, Collateral Security and Loan Files not previously released. On the first
Payment Date on which (x) the amount in the Reserve Account exceeds the Reserve
Account Required Amount following any withdrawal on that Payment Date under
Sections 5.06(a) and 5.06(b), and (y) the Depositor has and will have no further
entitlement to payment under Section 5.06(b), the Trustee shall release from the
lien of this Agreement, and deliver to the Depositor, all Reserve Account Loans,
Collateral Security and Loan Files.
e. The Trustee may withdraw any amount deposited in the Reserve Account
that was not required to be deposited therein and to make rebates or adjustments
deemed necessary by the Servicer pursuant to Section 8.06(d).
SECTION 5.07 Originator Payment Obligation.
a. As additional credit enhancement for the Certificates, the Originator
promises to pay to the Trustee for deposit in the Reserve Account the net cash
proceeds ("Net REO Proceeds") from the sale of sixteen parcels of real estate
described on Exhibit C (the "REO") to the extent aggregate Net REO Proceeds
exceed $625,000; provided that the Originator shall have no obligation to
deposit Net REO Proceeds in the Reserve Account once the amount on deposit in
the Reserve Account (from whatever source) equals the Reserve Account Required
Amount. The Depositor will remit such Net REO Proceeds to the Trustee promptly
upon liquidation of the REO.
b. The Originator will deliver to the Servicer (if other than the
Originator) and the Trustee two Business Days in advance of each Payment Date a
report detailing its progress in liquidating the REO and the related sale
proceeds, liquidation expenses and Net REO Proceeds to date. Upon the sale of
all REO, the Originator will certify to the Trustee that all REO has been sold,
the aggregate Net REO Proceeds, and either (i) the amount, if any, by which
$625,000 exceeds the Net REO Proceeds, to which amount the Depositor is entitled
under Section 5.06(b) or (2) the amount by which Net REO Proceeds exceed
$625,000, which amount the Originator has remitted to the Trustee (unless and to
the extent the amount on deposit in the Reserve Account would exceed the Reserve
Account Required Amount).
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ARTICLE VI.
REPORTS AND TAX MATTERS
SECTION 6.01 Accounting and Reports.
a. On or before the second Business Day next preceding the Payment Date,
the Servicer shall prepare and furnish to the Trustee the statements specified
in Section 6.01(b).
b. Concurrently with each distribution to Certificateholders the Trustee
shall forward or cause to be forwarded by mail to each Certificateholder and the
Originator (if the Originator is not the Servicer), a statement setting forth
the following:
1. the amount distributed to Class B-2 Certificateholders on such
Payment Date that is allocable to interest and principal,
respectively;
2. the Certificate Principal Balance after giving effect to the
distribution of principal on such Payment Date;
3. any amount withdrawn from the Reserve Account and deposited in
the Certificate Account or paid to the Depositor on such Payment
Date and the amount on deposit in the Reserve Account after any
such withdrawal;
4. all information with respect to such Payment Date that is
received by the Trust as owner of the Class B-2 Underlying
Certificate;
5. the amount distributed to the Class C Certificateholder on such
Payment Date;
6. the Scheduled Principal Balance of the Reserve Account Loans and
the number of Reserve Account Loans that are Liquidated Loans,
their aggregate unpaid principal balance and the Net Liquidation
Loss on such Reserve Account Loans (such calculations to be done
in a manner consistent with the reporting in respect of the Loans
under the Pooling and Servicing Agreement as if the definitions
of such terms applied to the Reserve Account Loans); and
7. information with respect to the REO described in Section 5.07(b).
In the case of information furnished pursuant to clauses (1), (2) and (3)
above, the amounts shall be expressed as a dollar amount per Certificate with a
1% Percentage Interest or per $1000 denomination of Certificate.
Within 75 days after the end of each calendar year the Trustee shall
furnish or cause to be furnished to each Person who at any time during the
calendar year was a Holder of a Certificate a statement containing the
information with respect to interest accrued and principal paid on its
Certificates during such calendar year. Such obligation shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided or caused to be provided by the Trustee pursuant to the requirements of
the Code as from time to time in force.
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SECTION 6.02 Officer's Certificate. Each report pursuant to Section 6.01
shall be accompanied by a certificate of a Servicing Officer substantially in
the form of Exhibit F, certifying the accuracy of the report and that no Event
of Termination or event that with notice or lapse of time or both would become
an Event of Termination has occurred, or if such event has occurred and is
continuing, specifying the event and its status.
SECTION 6.03 Other Data. In addition, the Originator and (if different
from the Originator) the Servicer shall, on request of the Trustee or any of the
Rating Agencies, furnish the Trustee and/or any such Rating Agencies such
underlying data as may be reasonably requested.
SECTION 6.04 Annual Report of Accountants. Within four months after its
fiscal year end, the Servicer at its expense shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to issue to the Trustee 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 Certificateholder Annual Statement. 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 Section 6.01 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.
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 the 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
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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
of the Originator is the Servicer, or subject to reimbursement under Section
5.03(a)(iii) and 8.08 if a successor Servicer, retain such outside assistance as
it deems necessary in the performance of its obligations under this Section. The
Servicer shall provide to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of the
REMIC.
Each of the Holders of the Certificates or the Class C Certificate, by
acceptance thereof, agrees to file tax returns consistent with and in accordance
with any elections, decisions or other reports made or filed with regard to
federal, state or local taxes on behalf of the Trust. The Servicer, as tax
matters person or as agent for the tax matters person, shall represent the Trust
in connection with all examinations of the Trust's affairs by tax authorities,
including resulting administrative and judicial proceedings. Each of the
Holders of the Certificates and Class C Certificate, by acceptance thereof,
agrees to cooperate with the Servicer in such matters and to do or refrain from
doing any or all things reasonably required by the Servicer to conduct such
proceedings, provided that no such action shall be required by the Servicer of
any Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class C Certificateholder shall pay, on behalf of the Trust, any
foreign, federal, state or local income, property, excise, sales, receipts or
any other similar or related taxes or charges which may be imposed upon the
assets of the Trust comprising a REMIC or otherwise and shall, to the extent
provided in Section 5.03(b)(3), be entitled to be reimbursed out of the
Certificate Account or, if such tax or charge results from a failure by the
Trustee, the Originator or any Servicer to comply with the provisions of Section
2.04, or 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.
THE TRUSTEE
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SECTION 7.01 Duties of Trustee. The Trustee, prior to the occurrence of an
Event of Termination and after the curing of all Events of Termination which may
have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and any Related Document. If an Event
of Termination has occurred (which has not been cured), the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
Subject to Section 7.03, no provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
a. Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement and the Related Documents, the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement and the Related Documents, no implied covenants or
obligations shall be read into this Agreement or the Related Documents 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 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
or any Related Document; and
d. The Trustee shall not be charged with knowledge of any event
constituting an Event of Termination, unless a Responsible Officer of the
Trustee at the Corporate Trust Office obtains actual knowledge of such event or
the Trustee receives written notice of such event from the Servicer or the
Certificateholders representing, in the aggregate, 25% or more of the
Certificate Principal Balance.
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None of the provisions contained in this Agreement or any Related Document
shall in any event require the Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Depositor, the
Originator or the Servicer under this Agreement or any Related Document, 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 7.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 7.01:
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 Depositor, the Originator 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 any Related Document, or to
institute, conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; provided,
however, that nothing contained herein shall relieve the Trustee of the
obligations, upon the occurrence of an Event of Termination (which has not been
cured), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs;
d. Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Certificateholders representing, in the
aggregate, 25% or more of the Certificate Principal Balance; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the
Trustee may require reasonable indemnity against such cost, expense or liability
as a condition to so proceeding. The
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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 7.03 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 or any Related Document, of the
Certificates or of the Class C Certificate (other than its execution thereof) or
of any Reserve Account Loan, Loan File or related document. The Trustee shall
not be accountable for the use or application by the Servicer, the Depositor or
the Originator of funds paid to the Depositor or the Originator, as applicable,
in consideration of the conveyance of the Class B-2 Underlying Certificate or
pledge of the Reserve Account Loans to the Trust by the Depositor or the
Originator or deposited in or withdrawn from the Certificate Account by the
Servicer.
SECTION 7.04 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 7.05 Rights of Certificateholders to Direct Trustee and to Waive
Events of Termination. Holders of Certificates representing, in the aggregate,
25% or more of the 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 7.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceedings so directed would be illegal or involve
it in personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided, further that
nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders. Holders of the Certificates representing,
in the aggregate, 51% or more of the Certificate Principal Balance may on behalf
of all Certificateholders waive any past Event of Termination hereunder and its
consequences, except a default in respect of a covenant or provision hereof
which under Section 10.08(c) cannot be modified or amended without the consent
of all Certificateholders, and upon any such waiver, such Event of Termination
shall cease to exist and shall be deemed to have been cured for every purpose of
this Agreement; but no such waiver shall extend to any subsequent or other Event
of Termination or impair any right consequent thereon.
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SECTION 7.06 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);
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) 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 7.06 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 7.06 pursuant to Sections 5.03 and 8.08.
SECTION 7.07 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 7.07, the combined capital and surplus of
such Person shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In addition, the Trustee
(or, if the Trustee is U.S. Bank Trust National Association, the parent company
of U.S. Bank Trust National Association) shall at all times have (a) a long-term
deposit rating from S&P of at least BBB or as shall be otherwise acceptable to
S&P, (b) a long-term deposit rating from Fitch of at least BBB or as shall be
otherwise acceptable to Fitch and (c) a long-term deposit rating from Xxxxx'x of
at least Baa2 or as shall be otherwise acceptable to Xxxxx'x. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 7.07, the Trustee shall resign immediately in the manner and with
the effect specified in Section 7.08.
SECTION 7.08 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
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Servicer and the Originator. Upon receiving such notice of resignation, the
Originator shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to each of the
Servicer and the Originator and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.07 and shall fail to resign after written request
therefor by the Originator, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Originator may
remove the Trustee. If the Originator shall have removed the Trustee under the
authority of the immediately preceding sentence, the Originator shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 7.08 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 7.09.
SECTION 7.09 Successor Trustee. Any successor Trustee appointed as
provided in Section 7.08 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 Reserve Account Loans and
the Loan Files and any related documents and statements held by it hereunder;
and, if the Reserve Account 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
7.09 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 7.07.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 7.09, 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
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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 7.10 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 7.07,
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 7.11 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 7.12 Obligor Claims. In connection with any offset defenses, or
affirmative claims for recovery, asserted in legal actions brought by Obligors
under one or more Reserve Account Loans based upon provisions therein complying
with, or upon other rights or remedies arising from, any legal requirements
applicable to the Reserve Account Loans, including, without limitation, the
Federal Trade Commission's Trade Regulation Rule Concerning Preservation of
Consumers' Claims and Defenses (16 C.F.R. (S) 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 Reserve Account
Loans. The Trustee is the holder of a security interest in the Reserve Account
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 Reserve Account Loan payments, pursuant to such legal
actions;
c. The Trustee will pay, solely from available Trust monies, affirmative
claims for recovery by Obligors only pursuant to final judicial orders or
judgments, or judicially approved settlement agreements, resulting from such
legal actions;
d. The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors' legal actions to
recover affirmative claims against Certificateholders and the Class C
Certificateholder;
e. The Trustee will cooperate with and assist Certificateholders and the
Class C Certificateholder in their defense of legal actions by Obligors to
recover affirmative claims if such cooperation and assistance is not contrary to
the interests of the Trustee as a party to such
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legal actions and if the Trustee is satisfactorily indemnified for all
liability, costs and expenses arising therefrom; and
f. The Depositor 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
Reserve Account Loans. Notwithstanding any other provision of this Agreement,
the obligation of the Depositor under this Section 7.12(f) shall not terminate
upon a Service Transfer.
SECTION 7.13 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 Reserve Account Loans or other Trust Property 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 7.13,
such powers, duties, obligations, rights and trusts as the Originator and the
Trustee may consider necessary or desirable. If the Originator shall not have
joined in such appointment within 15 days after the receipt by it of a request
to do so, or in case an Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 7.07 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 7.09.
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 7.13 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 VII. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
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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 7.14 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.
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ARTICLE VIII.
THE SERVICER
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SECTION 8.01 Responsibility for Reserve Account Loan Administration. Until
the Trustee releases its security interest in the Reserve Account Loans, the
Servicer will have the sole obligation to manage, administer, service and make
collections on the Reserve Account Loans and perform or cause to be performed
all contractual and customary undertakings of the holder of the Reserve Account
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 Section
8.11.
The Servicer shall, with respect to each Reserve Account Loan which does
not provide for a fixed interest rate over its life, make adjustments to the
interest rate and the payments due on such Reserve Account Loan in compliance
with applicable regulatory adjustable mortgage loan requirements and the terms
of the Reserve Account Loan. The Servicer shall establish procedures to monitor
the interest rate adjustment dates and the interest rate in order to assure that
it correctly calculates any applicable interest rate change, and it will comply
with those procedures. The Servicer shall execute and deliver all appropriate
notices required by the applicable adjustable mortgage loan laws and regulations
and the Reserve Account Loans regarding such interest rate adjustments and
payment adjustments.
SECTION 8.02 Standard of Care. In managing, administering, servicing and
making collections on the Reserve Account 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 improvement loans and home equity loans for prudent institutional
investors.
SECTION 8.03 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 Reserve Account Loan.
SECTION 8.04 Inspection.
a. At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Reserve Account Loans, which have not
previously been provided to the Trust, and will cause its personnel to assist in
any examination of such records by the Trustee. The examination referred to in
this Section will be conducted in a manner which does not unreasonably interfere
with the Servicer's normal operations or customer or employee relations.
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Without otherwise limiting the scope of the examination the Trustee may make,
the Trustee may, using generally accepted audit procedures, verify the status of
each Reserve Account Loan and review the Electronic Ledger and records relating
thereto for conformity to monthly reports prepared pursuant to Section 6.01 and
compliance with the standards represented to exist as to each Reserve Account
Loan in this Agreement.
b. A Certificateholder holding Certificates representing in the aggregate
at least 5% of the Certificate Principal Balance and the Class C
Certificateholder shall have the rights of inspection afforded to the Trustee
pursuant to this Section 8.04.
SECTION 8.05 Deposits in Reserve Account. The Servicer shall pay into the
Reserve Account, as promptly as practicable (but not later than the next
Business Day) following receipt thereof, all amounts received with respect to
the Reserve Account Loans, other than extension fees and assumption fees, which
fees shall be retained by the Servicer as compensation for servicing the Reserve
Account Loans, and other than Liquidation Expenses permitted by Section 8.08.
SECTION 8.06 Enforcement.
a. The Servicer shall, consistent with customary servicing procedures, act
with respect to the Reserve Account Loans in such manner as will maximize the
receipt of principal and interest on such Reserve Account Loans and liquidation
proceeds.
The Servicer shall exercise its discretion, consistent with customary
servicing procedures and the terms of this Agreement, with respect to the
enforcement of defaulted Reserve Account Loans in such manner as will maximize
the receipt of principal and interest with respect thereto, including but not
limited to the sale of such Reserve Account Loan to a third party, the
modification of such Reserve Account Loan, or foreclosure upon the related real
property and disposition thereof.
b. In accordance with the standard of care specified in Section 8.02, the
Servicer may, in its own name, if possible, or as agent for the Trust, commence
proceedings for the foreclosure of any subject real estate, or may take such
other steps that in the Servicer's reasonable judgment will maximize liquidation
proceeds with respect to a Reserve Account Loan, including, for example, the
sale of such Reserve Account 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 liquidation proceeds are deposited in the Reserve Account.
c. The Servicer may xxx to enforce or collect upon Reserve Account 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 Reserve Account Loan, the act of
commencement shall be deemed to be an automatic assignment of the Reserve
Account 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 Reserve Account Loan on the ground that it is not a real party in
interest or a holder
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entitled to enforce the Reserve Account 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 Reserve Account Loan, including bringing suit in its
name, the Depositor's name, or the Certificateholders' names.
d. The Servicer may grant to the Obligor on any Reserve Account Loan any
rebate, refund or adjustment out of the Reserve Account that the Servicer in
good faith believes is required because of the principal prepayment in full of
the Reserve Account Loan. The Servicer will not permit any rescission or
cancellation of any Reserve Account Loan.
e. The Servicer shall enforce any due-on-sale clause in a Reserve Account
Loan if such enforcement is called for under its then current servicing policies
for obligations similar to the Reserve Account Loans, provided that such
enforcement is permitted by applicable law and will not adversely affect any
applicable insurance policy. If an assumption of a Reserve Account 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.
SECTION 8.07 Trustee to Cooperate.
a. Upon payment in full on any Reserve Account Loan, the Servicer will
notify the Trustee, the Depositor 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 Reserve Account pursuant to Section 8.05 have
been so deposited and may be substantially in the form of Exhibit H hereto) and
shall request delivery of the Reserve Account Loan and Loan File to the
Servicer. Upon receipt of such delivery and request, the Trustee shall promptly
release or cause to be released such Reserve Account Loan and Loan File to the
Servicer. Upon receipt of such Reserve Account 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 Reserve Account 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 Reserve Account Loan
has been paid in full; provided that, to the extent that insufficient payments
are received on a Reserve Account 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 Reserve Account Loan), and deposited in the Reserve Account.
b. From time to time as appropriate for servicing and foreclosing, the
Trustee shall, upon written request of a Servicing Officer (which may be
substantially in the form of Exhibit H hereto) and delivery to the Trustee of a
receipt signed by such Servicing Officer, cause a Reserve Account 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 Reserve Account Loan
to be released to the Servicer with a notation that the Reserve Account 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
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Servicer and otherwise cooperate with the Servicer in enforcement of the
Certificateholders' rights and remedies with respect to Reserve Account Loans.
c. The Servicer's receipt of a Reserve Account Loan and/or Loan File shall
obligate the Servicer to return the original Reserve Account Loan and the
related Loan File to the Trustee when its need by the Servicer has ceased unless
the Reserve Account Loan has been paid in full as described in Section 8.07(a).
SECTION 8.08 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 Reserve Account Loans,
foreclosure upon real estate securing Reserve Account Loans, all other fees and
expenses not expressly stated hereunder to be for the account of the Trust or
the Depositor or the Originator, and, while the Originator or a subsidiary or
affiliate of the Originator is Servicer, payment of the Trustee's fees pursuant
to Section 7.06 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 this Section and Section 5.03 and except that the Servicer
shall be reimbursed out of the liquidation proceeds of a liquidated loan for
customary out-of-pocket Liquidation Expenses incurred by it. The Servicer shall
not incur such Liquidation Expenses unless it determines in its good faith
business judgment that incurring such expenses will increase the net liquidation
proceeds on the related Reserve Account Loan. So long as the Servicer is not
the Originator or a subsidiary or affiliate of the Originator, the Servicer
shall be reimbursed for any third party costs incurred by it pursuant to
Sections 6.06 or 7.06.
If the Servicer fails to make a timely interest rate or monthly payment
adjustment on a Reserve Account Loan which does not provide for a fixed interest
rate over the life of the Reserve Account Loan, the Servicer shall use its own
funds to satisfy any shortage in the Obligor's remittance so long as such
shortage shall continue; any such amount paid by the Servicer shall be
reimbursable to it from any subsequent amounts collected on account of the
related Reserve Account Loan with respect to such adjustments.
SECTION 8.09 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
improvement loans and home equity loans having an aggregate principal amount of
$10,000,000 or more, and which are generally regarded as servicers acceptable to
institutional investors. The Servicer shall cause to be maintained with respect
to the real property securing a Reserve Account Loan hazard insurance (excluding
flood insurance coverage) if such Reserve Account Loan is secured by a first
priority mortgage, deed of trust or security deed or the initial principal
balance of such Reserve Account Loan exceeds $30,000.
SECTION 8.10 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
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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 8.11 Removal of Servicer; Resignation of Servicer.
a. The removal or resignation of the Servicer pursuant to the Pooling and
Servicing Agreement shall also constitute a removal or resignation of the
Servicer hereunder (such removals or resignation herein called a "Service
Transfer").
b. The successor Servicer appointed pursuant to the Pooling and Servicing
Agreement shall become the successor Servicer hereunder.
c. No removal or resignation of the Servicer shall become effective
hereunder until the Trustee under the Pooling and Servicing Agreement or a
successor Servicer shall have assumed the Servicer's responsibilities and
obligations in accordance with the Pooling and Servicing Agreement and
acknowledged in writing its assumption of the responsibilities and obligations
as Servicer under this Agreement.
d. 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. Any such determination permitting
the resignation of the Servicer shall be evidenced by an opinion of counsel to
such effect which shall be delivered to the Trustee, which opinion shall be at
the Servicer's expense.
e. Upon removal or resignation of the Servicer, the Servicer at its own
expense also shall promptly deliver or cause to be delivered to a successor
Servicer or the Trustee all the books and records (including, without
limitation, records kept in electronic form) that the Servicer has maintained
for the Class B-2 Underlying Certificate and the Reserve Account 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.
f. 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
Trustee or the successor Servicer.
g. The Trustee and such successor shall take such action, consistent with
this Agreement, as shall be necessary to effectuate any such succession. The
Servicer agrees to cooperate with the Trustee and any successor Servicer in
effecting the termination of the Servicer's servicing responsibilities and
rights hereunder and shall promptly provide the Trustee or such successor
Servicer, as applicable, 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 Certificates.
Neither the Trustee nor any other successor Servicer shall be held liable by
reason of any failure to make, or any delay in making, any distribution
hereunder
8-5
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, the Servicer agrees to reimburse
the Trust for the costs and expenses associated with the transfer of servicing
to the replacement Servicer.
h. The Servicer which is being removed or is resigning shall give notice
to the Holders and Rating Agencies of the transfer of the servicing to the
successor Servicer.
SECTION 8.12 Trustee to Act; Appointment of Successor. On and after the
time the Servicer receives a notice of termination pursuant to Section 7.02 of
the Pooling and Servicing Agreement, the Trustee shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject to all
the responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and the Servicer shall be relieved
of such responsibilities, duties and liabilities arising after such Service
Transfer; provided, however, that the Trustee shall not be liable for any acts
or omissions of the Servicer occurring prior to such Service Transfer or for any
breach by the Servicer of any of its obligations contained herein or in any
related document or agreement. As compensation therefor, the Trustee shall be
entitled to receive reasonable compensation. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally
unable so to act, appoint, or petition a court of competent jurisdiction to
appoint, an Eligible Servicer as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of amounts in the Reserve Account as it and
such successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Certificateholders, exceed (a)
until the release of the Trustee's security interest in the Reserve Account
Loans, 1/12 of 0.5% of the greater of (1) the lesser of $4,116,000 and the
Certificate Principal Balance and (2) the principal balance of the Reserve
Account Loans then pledged to the Trustee and (b) thereafter, 1/12 of 0.5% of
the lesser of $4,116,000 and the Certificate Principal Balance. The Trustee and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession.
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ARTICLE IX.
INDEMNITIES
-----------
SECTION 9.01 Real Estate. The Originator will defend and indemnify the
Trust, the Trustee (including the Custodian and any other agents of the Trustee)
and the Certificateholders and the Class C Certificateholder against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation arising out of or
resulting from the use or ownership of any real estate related to a Reserve
Account Loans 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,
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 9.02 Liabilities to Obligors. No obligation or liability to any
Obligor under any of the Reserve Account Loans is intended to be assumed by the
Trust, the Certificateholders or the Class C Certificateholder under or as a
result of this Agreement or any Related Document and the transactions
contemplated hereby and, to the maximum extent permitted and valid under
mandatory provisions of law, the Trust, the Certificateholders and the Class C
Certificateholder expressly disclaim such assumption.
SECTION 9.03 Tax Indemnification. The Originator agrees to pay, and to
indemnify, defend and hold harmless the Trust, the Trustee (including the
Custodian and any other agents of the Trustee), the Certificateholders and the
Class C Certificateholder from, any taxes which may at any time be asserted with
respect to, and as of the date of, the transfer of the Class B-2 Underlying
Certificate 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
Depositor, the Servicer or the Trustee under this Agreement or imposed against
the Trust, a Certificateholder, the Class C Certificateholder or otherwise.
SECTION 9.04 Servicer's Indemnities. The Servicer shall defend and
indemnify the Trust, the Trustee (including the Custodian and any other agents
of the Trustee), the Certificateholders and the Class C Certificateholder
against any and all costs, expenses, losses, damages, claims and liabilities,
including reasonable fees and expenses of counsel and expenses of litigation, in
respect of any action taken or omitted to be taken by the Servicer with respect
to any Reserve Account Loan. This indemnity shall survive any Service Transfer
(but the original Servicer's obligations under this Section 9.04 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 9.05 Operation of Indemnities. Indemnification under this Article
shall include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation. If the Originator or the Servicer has made any
indemnity payments to the Trustee pursuant to this
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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 9.06 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 5.03; 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 Depositor, the Trustee or any Servicer
to comply with the provisions of Section 2.04, (ii) by any Servicer to comply
with the provisions of Section 6.06, or (iii) by the Trustee to execute any tax
returns pursuant to Section 7.11.
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ARTICLE X.
MISCELLANEOUS
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SECTION 10.01 Servicer Not to Resign; Delegation of Servicing Duties.
The Servicer shall not resign from the obligations and duties hereby imposed on
it except upon determination that the performance of its duties hereunder is no
longer permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel for the
Servicer to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the responsibilities and obligations of the Servicer in accordance with Section
8.12.
Notwithstanding the foregoing, Conseco Finance Corp., if it is the
Servicer, may delegate some or all of its servicing duties to a wholly owned
subsidiary of Conseco Finance Corp., for so long as said subsidiary remains,
directly or indirectly, a wholly owned subsidiary of Conseco Finance Corp.
Notwithstanding any such delegation, Conseco Finance Corp. shall retain all of
the rights and obligations of the Servicer hereunder.
SECTION 10.02 Conseco and Depositor Not to Engage in Certain
Transactions with Respect to the Trust. Neither Conseco Finance Corp. nor the
Depositor 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 (except as expressly contemplated by this
Agreement and the Related Documents).
SECTION 10.03 Maintenance of Office or Agency. The Trustee will
maintain in Minneapolis or St. Xxxx, Minnesota, an office or agency where
Certificates or the Class 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
000 Xxxx 0xx Xxxxxx, Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000. The Trustee will
give prompt written notice to the Originator, the Depositor, 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 10.04 Termination.
a. The Trust created hereby and the respective obligations and
responsibilities of the Originator, the Depositor, the Servicer and the Trustee
created hereby (other than the responsibility of the Trustee to make any final
distributions to Certificateholders as set forth below) shall terminate on the
earlier of (a) the Payment Date on which the Trust created pursuant to the
Pooling and Servicing Agreement has terminated, no amount is on deposit in the
Reserve Account, the Originator has no further obligation under Section 5.07 and
the principal balance of Reserve Account Loans remaining subject to the lien
created under Section 5.05 is reduced to zero (the "Final Payment Date"); or (b)
the Payment Date on which the Certificate Principal
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Balance is reduced to zero; provided, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. Xxxxx, living on the date hereof, and
provided, further, that the Servicer's and the Originator's and the Depositor's
representations and warranties and indemnities by the Originator, the Depositor
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 upon
which all Certificateholders or the Class C Certificateholder may surrender
their Certificates or the Class C Certificate to the Trustee for payment of the
final distribution and cancellation, shall be given promptly by the Trustee
(upon direction by the Servicer ten days prior to the date such notice is to be
mailed) by letter to each of the Rating Agencies, the Certificateholders and the
Class C Certificateholder mailed no later than the fifth Business Day of the
month of the Final Payment Date specifying (1) the Final Payment Date upon which
final payment on the Certificates and the Class C Certificate will be made upon
presentation and surrender of Certificates and the Class C Certificate at the
office or agency of the Trustee therein designated; (2) the amount of any such
final payment; and (3) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and surrender
of the Certificates and the Class C Certificate at the office or agency of the
Trustee therein specified.
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 5.03,
an amount equal to the Formula Distribution Amount in respect of the Class B-2
Certificates; and (2) as to the Class C Certificate, the amount which remains on
deposit in the Certificate Account (other than amounts retained to meet claims)
after application pursuant to clause (1) above. The distribution on the Final
Payment Date pursuant to this Section 10.04 shall be in lieu of the distribution
otherwise required to be made on such Payment Date in respect of the
Certificates and the Class C Certificate. On the Final Payment Date, if the
Trust created by the Pooling and Servicing Agreement has not been terminated,
the Trustee will endorse the Class B-2 Underlying Certificate to the Class C
Certificateholder.
d. In the event that all of the Certificateholders and the Class C
Certificateholder do not surrender their Certificates and the Class C
Certificate for cancellation within three months after the time specified in the
above-mentioned written notice, the Servicer 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 Servicer 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 Servicer shall take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
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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 10.05 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 7.01)
conclusive in favor of the Trustee, the Servicer, the Originator and the
Depositor if made in the manner provided in this Section.
c. The fact and date of the execution by any Certificateholder or the
Class C Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
d. The ownership of Certificates and the Class C Certificate shall be
proved by the Certificate Register.
e. Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder or the Class C Certificateholder
shall bind every holder of every Certificate or the Class C Certificate, as
applicable, issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done
by the Trustee, the Servicer, the Originator or the Depositor 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 10.06 Calculations. Except as otherwise provided in this
Agreement, all interest rate and basis point calculations under this Agreement
will be made on the basis of a 360-day year and twelve 30-day months and will be
carried out to at least three decimal places.
SECTION 10.07 Assignment or Delegation by Originator. Except as
specifically authorized hereunder, and except for its obligations as Servicer
which are dealt with under Article VIII, the Originator may not convey and
assign or delegate any of its rights or obligations
10-3
hereunder absent the prior written consent of Holders of Certificates
representing, in the aggregate, 66-2/3% or more of the Certificate Principal
Balance, and any attempt to do so without such consent shall be void.
SECTION 10.08 Amendment.
a. This Agreement may be amended from time to time by the Originator,
the Depositor, the Servicer and the Trustee, without the consent of any of the
Certificateholders or the Class C Certificateholder, to correct manifest error,
to cure any ambiguity, to correct or supplement any provisions herein which may
be inconsistent with any other provisions herein, as the case may be, to make
such changes as are necessary to maintain the status of the Trust as a "real
estate mortgage investment conduit" under the REMIC Provisions of the Code or to
otherwise effectuate the benefits of such status to the Trust, the
Certificateholders or the Class C Certificateholder, including, without
limitation, to implement any provision permitted by law that would enable a
REMIC to avoid the imposition of any tax, or to make any other provisions with
respect to matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel for the Servicer,
adversely affect in any material respect the interests of any Certificateholder.
b. This Agreement may also be amended from time to time by the
Servicer, the Originator, the Depositor and the Trustee, with the consent of
Holders of Certificates representing, in the aggregate, 66-2/3% or more of the
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 Reserve Account Loans or
distributions which are required to be made on any Certificate, (b) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of the holders of all Certificates then outstanding, (c) result in the
disqualification of the Trust as a REMIC under the Code, (d) adversely affect
the status of the Trust as a REMIC or the status of the Certificates as "regular
interests" in the REMIC, or (e) cause any tax (other than any tax imposed on
"net income from foreclosure property" under Section 860G(c)(1) of the Code that
would be imposed without regard to such amendment) to be imposed on the Trust,
including, without limitation, any tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after the startup
date" under Section 860G(d)(1) of the Code. This Agreement may not be amended
without the consent of the Class C Certificateholder, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement which would modify in any manner the rights of the Class C
Certificateholder.
c. This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholder if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
d. Concurrently with the solicitation of any consent pursuant to this
Section 10.08, the Trustee shall furnish written notification to each of the
Rating Agencies. Promptly after the execution of any amendment or consent
pursuant to this Section 10.08, the Trustee shall furnish
10-4
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 10.08 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.
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 10.08, 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 (c) 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 Trust 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 10.09 Notices. All communications and notices pursuant hereto
to the Depositor, the Servicer, the Originator, the Trustee, and the Rating
Agencies shall be in writing and delivered or mailed to it at the appropriate
following address:
If to the Depositor:
Conseco HE/HI 2001-B-2, Inc.
300 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
10-5
If to the Servicer:
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Originator:
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Trustee:
U.S. Bank Trust National Association
Corporate Trust Department
000 Xxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx-Xxxx
Telecopier Number: (000) 000-0000
If to Fitch:
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxx
If to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received. All
communications and notices pursuant hereto to a Certificateholder or the Class C
Certificateholder shall be in writing and delivered or mailed at the address
shown in the Certificate Register.
SECTION 10.10 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
10-6
SECTION 10.11 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 10.12 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Minnesota.
SECTION 10.13 No Petition. The Originator, Depositor, Servicer and the
Trustee, by entering into this Agreement and each Certificateholder and Class C
Certificateholder, by accepting a Certificate or the Class C Certificate, hereby
covenant and agree that they will not at any time institute against the Trust,
or join in any institution against the Trust of, any bankruptcy proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations with respect to the Certificates, the Class C Certificate
or this Agreement.
10-7
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be executed by their respective officers thereunto duly authorized this 31st
day of May, 2001.
CONSECO HE/HI 2001-B-2, INC.
By:
CONSECO FINANCE CORP.
By:
U.S. BANK TRUST NATIONAL
ASSOCIATION,
not in its individual capacity but solely as
Trustee
By:
Xxxxxx Xxxxxxx-Xxxx
Vice President
00-0
XXXXX XX XXXXXXXXX )
)ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this day of
, 2001, by , of Conseco Finance Corp., a
Delaware corporation, on behalf of the corporation.
Notary Public
[SEAL]
STATE OF MINNESOTA )
)ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this day of
, 2001, by , of Conseco HE/HI 2001-B-2, Inc.,
a Minnesota corporation, on behalf of the corporation.
Notary Public
[SEAL]
00-0
XXXXX XX XXXXXXXXX )
)ss.
COUNTY OF XXXXXX )
The foregoing instrument was acknowledged before me this day of
, 2001, by Xxxxxx Xxxxxxx-Xxxx, of U.S. Bank Trust National
Association, a national banking association, on behalf of the national banking
association.
Notary Public
[SEAL]
10-10
EXHIBIT A
FORM OF CLASS B-2 CERTIFICATE
[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 4.02 OF THE TRUST AGREEMENT REFERRED
TO HEREIN.]
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 X-0 Xx. X-0
First Payment Date Pass-Through Rate: The least of (i)
June 15, 2001 9.851%, (ii) the Group I Adjusted
Weighted Average Loan Rate, and (iii)
the Group II Weighted Average Loan Rate
Denomination: $7,718,000
Aggregate Denomination of
all Class B-2
Certificates: $7,718,000
Servicer: Final Scheduled Payment Date: June 15,
Conseco Finance Corp. 2032 (or if such day is not a Business
Day, then the next succeeding Business
Day)
CUSIP:
CONSECO FINANCE TRUST HE/HI 2001-B-2
EXCEPT AS PROVIDED IN SECTION 4.02(b)(2) OF THE TRUST AGREEMENT, BY
ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE
A-1
OR ANY INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF ANY EMPLOYEE
BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF THE
CODE (EACH, A "PLAN") ACKNOWLEDGES THAT EITHER THE CERTIFICATEHOLDER HAS
DELIVERED TO THE ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF
COUNSEL (SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE DEPOSITOR 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 DEPOSITOR
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 DEPOSITOR 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 Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in the Conseco Finance Trust HE/HI 2001-B-2 (the "Trust"). The Trust has been
created pursuant to a Trust Agreement (the "Agreement"), dated as of May 1,
2001, between Conseco Finance Corp. as Originator and Servicer, Conseco HE/HI
2001-B-2, Inc. as Depositor, and U.S. Bank Trust National Association (the
"Trustee") as Trustee of the Trust. 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 June 2001, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
Certificates with an aggregate Percentage Interest of at least 5% of the
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 Amount distributed under Section
5.03(b) of the Agreement for such Payment Date. The final scheduled
A-2
Payment Date of this Certificate is June 15, 2032 or the next succeeding
Business Day if such June 15 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account and Reserve 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 Employment 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 Depositor 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 Depositor 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 Depositor or
the Servicer to any obligation or liability in addition to those undertaken in
the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all
amendments thereto will be provided to any Certificateholder free of charge upon
a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Xxxx, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder 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
A-3
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 Depositor, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Depositor,
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 Depositor, the
Servicer, the Trustee, the Paying Agent, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
IN WITNESS WHEREOF, Conseco Finance Trust HE/HI 2001-B-2 has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
, 2001 CONSECO FINANCE TRUST HE/HI
2001-B-2
By U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Agent
A-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Certificate of the Conseco Finance
Trust HE/HI 2001-B-2, 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
EXHIBIT B
FORM OF CLASS C CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS B-2
---------------------------------------------------------------------
CERTIFICATES AS DESCRIBED IN THE TRUST 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 4.02 OF THE TRUST 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 TRUST AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 4.02 OF SUCH TRUST
AGREEMENT.
BY ACCEPTANCE OF THIS CERTIFICATE, THE PURCHASER OF THE CERTIFICATE OR ANY
INTEREST HEREIN BY, ON BEHALF OF OR WITH PLAN ASSETS OF ANY EMPLOYEE BENEFIT
PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR THAT IS DESCRIBED IN SECTION 4975(e)(1) OF THE CODE (EACH,
A "PLAN") ACKNOWLEDGES THAT EITHER THE CERTIFICATEHOLDER HAS DELIVERED TO THE
ORIGINATOR AND THE TRUSTEE AT ITS OWN EXPENSE AN OPINION OF COUNSEL
(SATISFACTORY TO THE ORIGINATOR AND THE TRUSTEE) THAT THE PURCHASE AND HOLDING
OF THIS CERTIFICATE BY SUCH PLAN WILL NOT RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
ORIGINATOR, THE DEPOSITOR 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 DEPOSITOR
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 DEPOSITOR OR THE
B-1
SERVICER TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE
AGREEMENT.
Class C No.
Cut-off Date: Percentage Interest:
As defined in the Trust Agreement
dated May 1, 2001
First Payment Date:
June 15, 2001
CERTIFICATE FOR CONSECO FINANCE TRUST HE/HI 2001-B-2
Original Principal Balance of the Trust: $7,718,000
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 Trust HE/HI 2001-B-2 (the "Trust"), which
includes among its assets the Class B-2 Certificates issued by Conseco Finance
Home Equity and Home Improvement Loan Trust 2001-B (the "underlying B-2
Certificate"). The Trust has been created pursuant to a Trust Agreement (the
"Agreement"), dated as of May 1, 2001, among Conseco Finance Corp., as
Originator and Servicer (the "Originator"), Conseco HE/HI 2001-B-2, Inc., as
Depositor (the "Depositor") 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 June 2001, 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
Class C Distribution Amount. The final scheduled Payment Date of this Class C
Certificate is June 15, 2032 or the next succeeding Business Day if such June 15
is not a Business Day.
The Class C Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds in the Certificate Account to the
extent available for distribution to the Class C Certificateholder as provided
in the Agreement for payment hereunder and that the Trustee in its individual
capacity is not personally liable to the Class C Certificateholder for any
amounts payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement. By
acceptance of this Certificate, the
B-2
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, the Depositor 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 Depositor 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 Depositor 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 Certificateholders
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C 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. Xxxx, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon a new Class C Certificate evidencing the
same Class C Certificate will be issued to the designated transferee or
transferees.
The Originator, the Depositor, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Depositor,
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 Depositor, the
Servicer, the Trustee, the Paying Agent, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The holder of this Class C Certificate, by acceptance hereof, agrees that,
in accordance with the requirements of Section 860D(b)(1) of the Code, the
federal tax return of the Trust for its first taxable year shall provide that
the Trust Property consisting of the underlying B-2 Certificate elects to be
treated as a "real estate mortgage investment conduit" (a "REMIC") under
B-3
the Code for such taxable year and all subsequent taxable years. The Class B-2
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.
B-4
IN WITNESS WHEREOF, Conseco Finance Trust HE/HI 2001-B-2 has caused this
Certificate to be duly executed by the manual signature of a duly authorized
officer of the Trustee.
Dated: CONSECO FINANCE TRUST HE/HI
2001-B-2
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
By:
Authorized Officer
B-5
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto the within Certificate for Conseco Finance
Trust HE/HI 2001-B-2, and does hereby irrevocably constitute and appoint
Attorney to transfer the said certificate on the
Certificate Register maintained by the Trustee, with full power of substitution
in the premises.
Dated: By:
Signature
B-6
EXHIBIT C
REO
--------------------------------------------------------------------------------
Account ID Prop State ID Prop Type
--------------------------------------------------------------------------------
1999-5000062670 PA Single Family
--------------------------------------------------------------------------------
1999-5000074327 KY Single Family
--------------------------------------------------------------------------------
1999-5500034367 MS Single Family
--------------------------------------------------------------------------------
1999-0000000000 WI 3-4 Family
--------------------------------------------------------------------------------
1999-6800013333 NY Single Family
--------------------------------------------------------------------------------
1999-6800494566 GA Single Family
--------------------------------------------------------------------------------
1999-6800812098 NY Single Family
--------------------------------------------------------------------------------
1999-0000000000 AL 1-2 Family
--------------------------------------------------------------------------------
1999-0000000000 MI 1-2 Family
--------------------------------------------------------------------------------
1999-6902399135 KS 1-2 Family
--------------------------------------------------------------------------------
1999-6905086143 AR Manufactured Home
--------------------------------------------------------------------------------
1999-6906367443 MA Condo
--------------------------------------------------------------------------------
1999-6906608101 ID 1-2 Family
--------------------------------------------------------------------------------
1999-0000000000 MN 1-2 Family
--------------------------------------------------------------------------------
1999-6906917197 MN 1-2 Family
--------------------------------------------------------------------------------
1999-6906973869 SC 1-2 Family
--------------------------------------------------------------------------------
C-1
EXHIBIT D
LIST OF RESERVE ACCOUNT LOANS
D-1
EXHIBIT E
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 Trust HE/HI 2001-B-2 (the "Trust") created pursuant to the
Trust Agreement dated as of May 1, 2001 among Conseco Finance Corp., Conseco
HE/HI 2001-B-2, Inc. and the Trustee (the "Agreement") (all capitalized terms
used herein without definition having the respective meanings specified in the
Agreement) acknowledges, pursuant to Section 2.03 of the Agreement, that the
Trustee has received the following: the Class B-2 Underlying Certificate and a
pledge of all of the Debtor's right, title and interest in (i) the reserve
account loans identified in the List of Reserve Account Loans attached to the
Agreement (the "Reserve Account 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 Reserve Account Loans due after the
Cut-off Date, (ii) all rights under any hazard, flood or other individual
insurance policy on the real estate securing a Reserve Account Loan for the
benefit of the owner of such Reserve Account Loan, (iii) all rights of the
Depositor under the Contribution Agreement and the Transfer Agreement, (iv) all
rights the Originator may have against the originating lender or contractor with
respect to Reserve Account Loans originated by a lender or contractor 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 Reserve Account
Loans, (vi) all rights under any title insurance policies, if applicable, on any
of the properties securing Reserve Account Loans, (vii) all documents contained
in the related Loan Files, (viii) the Certificate Account and the Reserve
Account, and (ix) all proceeds and products of the foregoing; and declares that,
directly or through a Custodian, it will hold all Loan Files that have been
delivered in trust, upon the terms set forth in the Agreement, for the use and
benefit of all Certificateholders.
The Trustee acknowledges that it has conducted a review of the Loan Files
for the Reserve Account Loans identified on the attached list and hereby
confirms that, except as noted on the attached list, each Loan File contains (a)
an original promissory note (or an executed lost note affidavit, together with a
copy of the note), duly endorsed in blank or in the name of the Trustee, (b) an
original copy of the mortgage, deed of trust or similar evidence of a lien on
the related improved real estate securing the Loan, (c) as assignment of the
Loan, and the mortgage, deed of trust or similar evidence of a lien, from the
originator (if other than the Originator) to the Originator, (d) an assignment
of the mortgage, deed of trust or similar evidence of a lien, to the Trustee or
in blank, and (e) any extension, modification or waiver agreement(s). The
Trustee has not otherwise reviewed the Loans and Loan Files for compliance with
the terms of the Agreement.
E-1
IN WITNESS WHEREOF, U.S. Bank Trust National Association, as Trustee, has
caused this acknowledgment to be executed by its duly authorized officer, this
31st day of May, 2001.
U.S. BANK TRUST NATIONAL
ASSOCIATION
not in its individual capacity but solely as
Trustee
By
Xxxxxx Xxxxxxx-Xxxx
Vice President
E-2
EXHIBIT F
FORM OF MONTHLY REPORT AND OFFICER CERTIFICATE
CONSECO FINANCE CORP.
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 6.02 of the Trust Agreement (the "Agreement") dated as of May 1, 2001
among the Company, Conseco HE/HI 2001-B-2, Inc., and U.S. Bank Trust National
Association, as Trustee of Conseco Finance Trust HE/HI 2001-B-2 (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement), and further certifies that:
1. The monthly report for the period from to
attached to this certificate is complete and accurate in
accordance with the requirements of Sections 6.01 and 6.02 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this day of
, .
CONSECO FINANCE CORP.
By:
[Name]
[Title]
F-1
FORM OF MONTHLY REPORT
----------------------
CERTIFICATES FOR CONSECO FINANCE TRUST HE/HI 2001-B-2
Payment Date:
Amount Available for Distribution
(a) Amount paid on Class B-2 Underlying
Certificate $
(b) Withdrawal from Reserve Account $
2. Servicing fee (if Originator or Affiliate is not
Servicer) $
Class B-2 Certificates
3. Current Interest
(a) Class B-2 Pass-Through Rate (a
floating rate equal to the least of
(i) 9.851%, (ii) the Group I
Adjusted Weighted Average Loan Rate
and (ii) the Group II Weighted
Average Loan Rate) %
(b) Class B-2 Interest Paid
(c) Class B-2 Interest Shortfall
4. Amount applied to Unpaid Class B-2 Interest
Shortfall
5. Remaining Unpaid Class B-2 Interest Shortfall
6. Principal Distribution
7. Class B-2 Principal Balance
8. Amount, if any, by which Formula Distribution
Amount exceeds Distribution Amount
9. Servicing fee (if Originator or Affiliate is
Servicer) and any additional servicing fee to
Servicer (if Originator or Affiliate is not
Servicer)
F-2
Class C Certificateholders
10. Reimbursement for Expenses
11. Class C Distribution Amount
Reserve Account and REO Reporting
12. Reserve Account Balance
13. Reserve Account Loans
(a) Scheduled Principal Balance
(b) Number of Liquidated Loans
(c) Aggregate unpaid principal balance of
Liquidated Loans
(d) Net Liquidation Loss
14. REO
(a) Sale proceeds, liquidation expenses and Net
REO proceeds to date, by parcel and in the
aggregate
(b) Identification of unsold REO parcels
Please contact the Bondholder Relations Department of U.S. Bank Trust
National Association at (000) 000-0000 with any questions regarding this
Statement or your Distribution.
F-3
EXHIBIT G
FORM OF REPRESENTATION LETTER
U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Re: Class [B-2][C] Certificate; Conseco Finance Trust HE/HI 2001-B-2
The undersigned purchaser (the "Purchaser") understands that the purchase
of the above-referenced certificate (the "Certificate") may be made only
pursuant to the exemption from registration under Section 4(2) of the Securities
Act of 1933, as amended (the "1933 Act"). 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 [underwriter] of the
Certificate to determine its suitability as a purchaser of the Certificate 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 Certificate has 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 Certificate and that any transfer must
comply with Section 4.02 of the Trust Agreement relating to the Certificate.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificate.
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 Certificate and is able
to bear the economic risk of such investment. The Purchaser has reviewed the
Prospectus Supplement dated April 25, 2001, to the Prospectus dated April 25,
2001, and the Offering Circular dated May 23, 2001 (collectively, the
"Prospectus") with respect to the Certificate, and has been given such
information concerning the Certificate as it has requested.
4. The Purchaser is acquiring the Certificate 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
G-1
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 4.02(b)(2) of the Trust Agreement, or
[_] acknowledges that it is deemed to make the representation set
forth in Section 4.02(b)(2) of the Trust Agreement.
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Trust
Agreement.
7. The Purchaser, as holder of the 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 Certificate as they
become due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificate 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.
G-2
Executed at , this day of , .
Purchaser's Name (Print)
By:
Signature
Its:
Address of Purchaser
Purchaser's Taxpayer
Identification Number
G-1
EXHIBIT H
SERVICER REQUEST FOR RELEASE OF RESERVE ACCOUNT LOAN FILES
To: U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Re: Trust Agreement dated as of May 1, 2001, among Conseco HE/HI 2001-B-2,
Inc., as Depositor, Conseco Finance Corp., as Originator and Servicer, and
U.S. Bank Trust National Association, as Trustee, relating to Conseco
Finance Trust HE/HI 2001-B-2 (the "Trust Agreement")
The undersigned certifies that [s]he is authorized to sign this Servicer
Request for Release of Reserve Account Loan Files on behalf of [Conseco Finance
Corp.], as Servicer, under the Trust Agreement. In connection with the
administration of the Reserve Account Loans held by you, as Trustee, pursuant to
the Trust Agreement, we request the release, and hereby acknowledge receipt, of
the Reserve Account Loan File for the Reserve Account Loan described below, for
the reason indicated.
Loan Number:
Reason for Requesting Documents (check only):
1. Mortgage Paid in Full
2. Foreclosure
3. Substitution
4. Other Liquidation
5. Nonliquidation Reason:
Servicer:
By:
(Authorized signer)
Address:
Date:
Please acknowledge the execution of the above request by your signature and date
below:
U.S. Bank Trust National Association
By:
Signature Date
Documents returned to Trustee:
Trustee Date
H-1
