EXHIBIT 10.5
FORM OF
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 1, 2001
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CONSECO PRIVATE LABEL
CREDIT CARD MASTER NOTE TRUST
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between
CONSECO FINANCE SERVICING CORP.
and
CONSECO FINANCE CREDIT CARD FUNDING CORP.
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.....................................................2
Section 1.01. Definitions...................................................2
Section 1.02. Other Definitional Provisions.................................8
ARTICLE II PURCHASE AND CONVEYANCE OF RECEIVABLES..........................9
Section 2.01. Purchase......................................................9
Section 2.02. Addition of Automatic Additional Accounts....................10
Section 2.03. Addition of Additional Accounts..............................11
Section 2.04. Representations and Warranties...............................12
Section 2.05. Delivery of Documents........................................12
ARTICLE III CONSIDERATION AND PAYMENT......................................13
Section 3.01. Purchase Price...............................................13
Section 3.02. Adjustments to Purchase Price................................13
Section 3.03. Use of Name, Logo and Marks..................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES.................................15
Section 4.01. Representations and Warranties of Servicing Corp. Relating
to Servicing Corp............................................15
Section 4.02. Representations and Warranties of Servicing Corp. Relating
to the Agreement and the Receivables.........................16
Section 4.03. Representations and Warranties of CFC........................18
ARTICLE V COVENANTS......................................................20
Section 5.01. Covenants of Servicing Corp..................................20
Section 5.02. Covenants of Servicing Corp. with Respect to Receivables
Purchase Agreements..........................................22
ARTICLE VI INDEMNITY AND REPURCHASE OBLIGATION............................23
Section 6.01. Indemnity for Ineligible Receivables.........................23
Section 6.02. Reassignment of Noteholders' Interest in Trust Portfolio.....23
ARTICLE VII CONDITIONS PRECEDENT...........................................24
Section 7.01. Conditions to CFC's Obligations Regarding Initial
Receivables..................................................24
Section 7.02. Conditions Precedent to Servicing Corp.'s Obligations........24
ARTICLE VIII TERM AND PURCHASE TERMINATION..................................26
Section 8.01. Term.........................................................26
Section 8.02. Purchase Termination.........................................26
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TABLE OF CONTENTS
(continued)
Page
ARTICLE IX MISCELLANEOUS PROVISIONS.......................................27
Section 9.01. Amendment....................................................27
Section 9.02. Governing Law................................................27
Section 9.03. Notices......................................................27
Section 9.04. Severability of Provisions...................................27
Section 9.05. Assignment...................................................28
Section 9.06. Acknowledgement and Agreement of Servicing Corp..............28
Section 9.07. Further Assurances...........................................28
Section 9.08. No Waiver; Cumulative Remedies...............................28
Section 9.09. Counterparts.................................................28
Section 9.10. Binding; Third-Party Beneficiaries...........................29
Section 9.11. Merger and Integration.......................................29
Section 9.12. Headings.....................................................29
Section 9.13. Schedules and Exhibits.......................................29
Section 9.14. Survival of Representations and Warranties...................29
Section 9.15. Nonpetition Covenant.........................................29
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RECEIVABLES PURCHASE AGREEMENT, dated as of May 1, 2001, by and between
CONSECO FINANCE CORP., a Delaware corporation (together with its permitted
successors and assigns, "Servicing Corp.") and CONSECO FINANCE CREDIT CARD
FUNDING CORP., a Minnesota corporation (together with its permitted successors
and assigns, "CFC").
W I T N E S S E T H:
WHEREAS, Servicing Corp. has purchased and from time to time will
purchase Receivables (hereinafter defined) originated by Conseco Bank, Inc., a
Utah industrial loan corporation (together with its permitted successors and
assigns, "Conseco Bank") which Receivables exist or will arise in accounts owned
by Conseco Bank and designated by Conseco Bank under the terms of a Receivables
Purchase Agreement dated as of August 1, 1999, [as amended and restated as of
May __, 2001] (the "Bank Receivables Purchase Agreement") between Conseco Bank
and Servicing Corp.;
WHEREAS, Servicing Corp. wishes to sell and CFC wishes to purchase from
time to time those Receivables purchased by Servicing Corp. under the Bank
Receivables Purchase Agreement;
WHEREAS, Servicing Corp. wishes to sell and CFC wished to purchase from
time to time certain Receivables originated by CFC and existing or arising in
accounts to be specified by Servicing Corp. under the terms of this Agreement;
WHEREAS, it is contemplated that the Receivables purchased hereunder
will be transferred by CFC to the Issuer (hereinafter defined) in connection
with the issuance of the Notes (hereinafter defined); and
WHEREAS, Servicing Corp. agrees that all representations, warranties,
covenants and agreements made by Servicing Corp. herein with respect to the
Accounts (hereinafter defined) and Receivables shall also be for the benefit of
the Issuer (hereinafter defined) and the Indenture Trustee (hereinafter defined)
for the benefit of the holders of the Notes and any Series Enhancers.
NOW, THEREFORE, it is hereby agreed by and between CFC and Servicing
Corp. as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used herein or in any
certificate, document, or Conveyance Paper made or delivered pursuant hereto,
and not defined herein or therein, shall have the meaning ascribed thereto in
the Indenture, the Transfer and Servicing Agreement or the Trust Agreement; in
addition, the following words and phrases shall have the following meanings:
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"Account" shall mean (i) an account established pursuant to a Credit
Card Agreement between Conseco Bank and any Person which account is identified
by the bank identification numbers and the bank numbers specified on the Account
Schedule prepared by Conseco Bank and delivered to Servicing Corp. under the
Conseco Bank RPA and included in Schedule II hereto and (ii) an account
established pursuant to a Credit Card Agreement between Servicing Corp. and any
Person which account is identified by the bank identification numbers and the
bank numbers specified on Schedule II hereto and, in each case, as such schedule
may be amended from time to time, and as such accounts are identified by account
number and by the receivables balance in the computer file, microfiche list or
printed list delivered to CFC by Servicing Corp. as required pursuant to Section
2.01, including, without limitation, each Initial Account listed on Schedule II
to this Agreement, each Additional Account listed on Schedule II to this
Agreement, each Related Account listed on Schedule II to this Agreement, and
each Transferred Account listed on Schedule II to this Agreement.
"Account Owner" shall mean Conseco Bank, Servicing Corp. or any other
entity which is the issuer of the credit card or credit relating to an Account
pursuant to a Credit Card Agreement.
"Account Schedule" shall mean a computer file or microfiche list
containing a true and complete list of all Accounts, identified by bank
identification number and by bank number and by account number and setting forth
the aggregate amount of Receivables and of Principal Receivables outstanding in
such Accounts (a) as of the Initial Cut-Off Date (for the Account Schedule
delivered on the date hereof) and, (b) as of the Additional Cut-Off Date for
Additional Accounts; provided that references to the Account Schedule delivered
by Conseco Bank under the terms of the Bank Receivables Purchase Agreement shall
include such information only for those accounts designated by Conseco Bank
under the Bank Receivables Purchase Agreement and such Account Schedule
delivered by Conseco Bank shall become a part of the Account Schedule referred
to herein and which includes a complete list of all Accounts.
"Additional Account" shall mean each credit account which is designated
as an Account hereunder in addition to the Initial Accounts.
"Addition Date" shall have the meaning given to that term in the
Transfer and Servicing Agreement.
"Addition Notice Date" shall have the meaning set forth in Section
2.02.
"Additional Cut-Off Date" shall have the meaning given to that term in
the Transfer and Servicing Agreement.
"Agreement" shall mean this Receivables Purchase Agreement and all
amendments hereof and supplements hereto.
"Bank Receivables Purchase Agreement" shall mean the Receivables
Purchase Agreement between Conseco Bank and Servicing Corp., dated as of
__________, ___.
"CFC" shall have the meaning set forth in the Recitals hereto.
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"Closing Date" shall mean the Initial Issuance Date and, with respect
to each Series, the date specified in the related Indenture Supplement.
"Conseco Bank" shall have the meaning set forth in the Recitals hereto.
"Conveyance" shall have the meaning specified in subsection 2.01(a).
"Conveyance Papers" shall have the meaning specified in subsection
4.01(a)(iii).
"Credit Adjustment" shall have the meaning specified in Section 3.02.
"Debtor Relief Laws" shall mean (i) the Bankruptcy Code of the United
States of America and (ii) all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets or similar
debtor relief laws of the United States, any state or any foreign country from
time to time in effect affecting the rights of creditors generally.
"Document Delivery Date" shall have the meaning set forth in Section
2.05.
"Eligible Account" shall have the meaning given to that term in the
Transfer and Servicing Agreement.
"Eligible Receivable" shall have the meaning given to that term in the
Transfer and Servicing Agreement.
"Finance Charge Receivables" shall mean all Receivables in the Accounts
which would be treated as "Finance Charge Receivables" in accordance with the
definition for such term in the Transfer and Servicing Agreement.
"Indenture" shall mean the Master Indenture between the Issuer and U.S.
Bank Trust National Association, as Indenture Trustee, dated as of May 1, 2001,
as supplemented by Indenture Supplements applicable to any Series that may be
issued from time to time.
"Indenture Supplement" shall mean an indenture supplement pursuant to
which a Series is issued.
"Indenture Trustee" shall mean U.S. Bank Trust National Association in
its capacity as indenture trustee under the Indenture, or its successor in
interest, or any successor indenture trustee appointed as provided in the
Indenture.
"Initial Account" shall mean each credit account existing on the
Initial Cut-Off Date and specified in Schedule II and in the computer file or
microfiche list delivered to CFC by Servicing Corp. pursuant to Section 2.01 on
the Initial Issuance Date.
"Initial Cut-Off Date" shall mean the close of business on May __,
2001.
"Initial Issuance Date" shall mean May __, 2001.
"Insolvency Event" shall have the meaning specified in Section 8.02.
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"New Principal Receivables" shall have the meaning set forth in Section
3.01(a).
"Obligor" shall mean, with respect to each Account, each person that
would be treated as an "Obligor" in accordance with the definition for such term
in the Transfer and Servicing Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement (unless otherwise specified therein), and any successor
Owner Trustee thereunder.
"Principal Receivables" shall mean all Receivables in the Accounts that
would be treated as "Principal Receivables" in accordance with the definition
for such term in the Transfer and Servicing Agreement.
"Purchase Price" shall have the meaning set forth in Section 3.01(a).
"Purchased Assets" shall have the meaning set forth in subsection
2.01(a).
"Receivables" shall mean, with respect to each Account, all amounts
which constitute Receivables under the Transfer and Servicing Agreement.
"Recoveries" shall have the meaning set forth in the Transfer and
Servicing Agreement.
"Related Account" shall mean an Account with respect to which a new
credit account number has been issued by the applicable Account Owner or
Servicer under circumstances resulting from an error or a lost or stolen credit
card not requiring standard application and credit evaluation procedures under
the Credit Card Guidelines.
"Servicing Corp." shall have the meaning set forth in the Recitals
hereto.
"Supplemental Account" shall mean each Eligible Account that is
designated pursuant to Section 2.02 to be included as an Account and is
identified in the Account Schedule delivered to CFC by Servicing Corp. pursuant
to Sections 2.01 and 2.05.
"Supplemental Conveyance" shall have the meaning set forth in Section
2.05.
"Transfer and Servicing Agreement" shall mean the Transfer and
Servicing Agreement, dated as of May 1, 2001, among Conseco Bank, as a
Transferor and as Servicer, CFC, as a Transferor, and the Trust, and all
amendments and supplements thereto.
"Transferred Account" shall mean each account (other than a Related
Account) into which an Account shall be transferred, provided that such transfer
was made in accordance with the Credit Card Guidelines.
"Trust" shall mean the Conseco Private Label Credit Card Master Note
Trust, a Delaware business trust.
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"Trust Agreement" shall mean the Conseco Private Label Credit Card
Master Note Trust Trust Agreement, dated as of May __, 2001, between Conseco
Bank, CFC and the Owner Trustee.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificate, other document, or Conveyance Paper made or
delivered pursuant hereto unless otherwise defined therein.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, Subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, Subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Transfer and Servicing Agreement and the Indenture and all applicable
Indenture Supplements.
[END OF ARTICLE I]
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ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.01. Purchase.
(a) By execution of this Agreement, Servicing Corp. does hereby sell,
transfer, assign, set over and otherwise convey to CFC (collectively, the
"Conveyance"), without recourse except as provided herein, all its right, title
and interest in, to and under (i) in the case of Receivables existing in or
arising in the Initial Accounts (including Transferred Accounts and Related
Accounts related to such Initial Accounts), the Receivables existing at the
close of business on the Initial Cut-Off Date, and thereafter created from time
to time in the Initial Accounts until the termination of the Trust; (ii) in the
case of Receivables existing in or arising in the Additional Accounts (including
Transferred Accounts and Related Accounts related to such Additional Accounts),
the Receivables existing at the close of business on the applicable Additional
Cut-Off Date, and thereafter created from time to time until the termination of
this Agreement pursuant to Article VIII hereof and all monies due or to become
due and all amounts received with respect thereto and all proceeds (including,
without limitation, "proceeds" as defined in the UCC) thereof, (ii) the right to
receive Recoveries with respect to such Receivables and (iii) all of Servicing
Corp.'s right, title and interest in and to any Merchant Termination Payments
which relate to any Receivables sold by Servicing Corp. to CFC under this
Agreement including, but not limited to, any Merchant Termination Payments or
rights thereto assigned by Conseco Bank to Servicing Corp. under the Bank
Receivables Purchase Agreement; (iv) all amounts received or receivable with
respect to any of the foregoing and (v) all proceeds (including "proceeds" as
defined in the UCC) thereof (all of the foregoing being referenced to herein as
the "Purchased Assets"). In addition, Servicing Corp. hereby assigns to CFC all
of Servicing Corp.'s right to enforce the Bank Receivables Purchase Agreement
against Conseco Bank.
(b) In connection with such Conveyance, Servicing Corp. agrees (i) to
record and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables and the other Purchased Assets now existing and
hereafter created, meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect, and maintain
perfection of, the Conveyance of such Purchased Assets from Servicing Corp. to
CFC, (ii) that such financing statements shall name Servicing Corp., as seller,
and CFC, as purchaser, of the Purchased Assets and (iii) to deliver a
file-stamped copy of such financing statements or other evidence of such filings
to CFC as soon as is practicable after filing.
(c) In connection with such Conveyance, Servicing Corp. further agrees
that it will, at its own expense, (i) on or prior to (x) the Initial Issuance
Date, in the case of the Initial Accounts, and (y) the applicable Addition Date,
in the case of Additional Accounts, indicate in its books and records, and it
shall cause the Servicer and any other Person to whom the Servicer delegates its
duties pursuant to Section 5.07 of the Transfer and Servicing Agreement to xxxx
in its books and records, that, in the case of the Initial Accounts or the
Additional Accounts, Receivables created in connection with such Accounts have
been conveyed to CFC in
6
accordance with this Agreement and have been conveyed by CFC to the Issuer
pursuant to the Transfer and Servicing Agreement and have been pledged by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders and any Series Enhancers and (ii) on or prior to (A) the Initial
Issuance Date, in the case of the Initial Accounts, (B) the applicable Addition
Date, in the case of designation of Additional Accounts, deliver to CFC an
Account Schedule (provided that such Account Schedule shall be provided in
respect of Additional Accounts as soon as practicable after the Determination
Date relating to the Monthly Period during which their respective Addition Dates
occur) specifying for each such Account, as of the Initial Cut-Off Date, in the
case of the Initial Accounts, and the applicable Additional Cut-Off Date, in the
case of Additional Accounts, (A) its account number, (B) the aggregate amount
outstanding in such Account and (C) the aggregate amount of Principal
Receivables in such Account. Each Account Schedule, as supplemented from time to
time, shall be marked as Schedule I to this Agreement, shall be delivered to
CFC, and is hereby incorporated into and made a part of this Agreement. Once the
books and records referenced in clause (i) of this paragraph have been indicated
with respect to any Account, Servicing Corp. further agrees not to alter such
indication during the remaining term of this Agreement unless and until
Servicing Corp. has taken such action as is necessary or advisable to cause the
interest of CFC in the Purchased Assets to continue to be perfected with the
priority required by this Agreement.
(d) The parties hereto intend that the conveyance of Servicing Corp.'s
right, title and interest in and to the Purchased Assets shall constitute an
absolute sale, conveying good title, free and clear of any liens, claims,
encumbrances or rights of others from Servicing Corp. to CFC. It is the
intention of the parties hereto that the arrangements with respect to the
Purchased Assets shall constitute either a contribution to capital of CFC or a
purchase and sale of such Purchased Assets and not a loan. In the event,
however, that it were to be determined that the transactions evidenced hereby
constitute a loan and not a contribution to capital or a purchase and sale, this
Agreement shall constitute a security agreement under applicable law, and
Servicing Corp. does hereby grant to CFC a first priority perfected security
interest in all of Servicing Corp.'s right, title and interest, whether now
owned or hereafter acquired, in, to and under the Receivables and other
Purchased Assets to secure the obligations of Servicing Corp. hereunder.
(e) To the extent that Servicing Corp. retains any interest in the
Purchased Assets, Servicing Corp. hereby grants to the Indenture Trustee for the
benefit of the Noteholders a security interest in all of Servicing Corp.'s
right, title and interest, whether now owned or hereafter acquired, in, to and
under the Purchased Assets, and all money, accounts, general intangibles,
chattel paper, instruments, documents, goods, investment property, deposit
accounts, certificates of deposit, letters of credit and advices of credit
consisting of, arising from or related to the Purchased Assets and all proceeds
thereof (collectively, the "Indenture Collateral"), to secure the performance of
all of the obligations of Servicing Corp. hereunder. With respect to the
Indenture Collateral, the Indenture Trustee shall have all of the rights that it
has under the Indenture. The Indenture Trustee shall have all of the rights of a
secured creditor under the UCC in New York and the UCC in Delaware.
7
Section 2.02. Addition of Accounts.
(a) If, from time to time, the Transferors become obligated to
designate Additional Accounts (as such term is defined in the Transfer and
Servicing Agreement) pursuant to subsection 2.09(a) of the Transfer and
Servicing Agreement, then CFC may, at its option, give Servicing Corp. written
notice thereof on or before the eighth Business Day (the "Addition Notice Date")
prior to the Addition Date therefor, and upon receipt of such notice Servicing
Corp. may, in its sole discretion, on or before the Addition Date, designate
sufficient Eligible Accounts to be included as Accounts so that after the
inclusion thereof the Transferors will be in compliance with the requirements of
said subsection 2.09(a). In addition, by mutual agreement of Servicing Corp. and
CFC, subject to compliance with the conditions and restrictions specified in
subsection 2.09 (c) or subsections (d) and (e) of the Transfer and Servicing
Agreement, Servicing Corp. may designate accounts to be included as Additional
Accounts. Upon such designation, such account shall be deemed to be Additional
Accounts hereunder. Servicing Corp. shall cooperate with CFC to enable CFC to
comply with the requirements of Section 2.09 of the Transfer and Servicing
Agreement and shall cooperate with CFC to enable CFC to perform with respect to
the Receivables in such Additional Accounts all actions specified in Section
2.09(c) or (e) of the Transfer and Servicing Agreement. In either event,
Servicing Corp. shall have sole responsibility for selecting the Additional
Accounts and shall determine and notify CFC of the Additional Cut-Off Date with
respect to such Additional Accounts.
(b) On the Addition Date with respect to any designation of Additional
Accounts CFC shall purchase Servicing Corp.'s right, title and interest in, to
and under the Receivables in Additional Accounts (as of the Additional Cut-Off
Date) (and such Additional Accounts shall be deemed to be Accounts for purposes
of this Agreement), subject to the satisfaction of the following conditions:
(i) all Additional Accounts shall be Eligible Accounts;
(ii) Servicing Corp. shall have delivered to CFC copies of
UCC-1 financing statements covering such Additional Accounts, if
necessary to perfect CFC's ownership of the Receivables arising
therein;
(iii) to the extent required of CFC by subsection 2.09(c) or
2.09(e) of the Transfer and Servicing Agreement, Servicing Corp. shall
have deposited in the Collection Account all Collections with respect
to such Additional Accounts since the Additional Cut-Off Date;
(iv) as of each of the Additional Cut-Off Date and the
Addition Date, no Insolvency Event with respect to Servicing Corp.
shall have occurred nor shall the transfer to CFC of the Receivables
arising in the Additional Accounts have been made in contemplation of
the occurrence thereof;
(v) Servicing Corp. shall have delivered to CFC an Officer's
Certificate, dated the Addition Date, confirming, to the extent
applicable, the items set forth in clauses (i) through (iv) above; and
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(vi) the transfer of the Receivables arising in the Additional
Accounts to CFC and by CFC to the Issuer will not result in an Adverse
Effect and Servicing Corp. shall have delivered to CFC an Officer's
Certificate, dated the Addition Date, stating that Servicing Corp.
reasonably believes that the transfer of the Receivables arising in the
Additional Accounts to CFC and by CFC to the Issuer will not have an
Adverse Effect.
Section 2.03. Representations and Warranties. Servicing Corp. hereby
represents and warrants to CFC as of the related Addition Date that, in the case
of the Initial Accounts, the Account Schedule delivered pursuant to subsection
2.01(c) and, in the case of Additional Accounts, the list delivered pursuant to
Section 2.04 below is, as of the applicable Additional Cut-Off Date, true and
complete in all material respects.
Section 2.04. Delivery of Documents. In the case of the designation of
Additional Accounts, Servicing Corp. shall deliver to CFC (i) the Account
Schedule to be delivered pursuant to Section 2.01 with respect to such
Additional Accounts on the date such file or list is required to be delivered
pursuant to Section 2.01 (the "Document Delivery Date") and (ii) a duly
executed, written assignment, substantially in the form of Exhibit A (the
"Supplemental Conveyance"), on the Addition Date.
[END OF ARTICLE II]
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ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.01. Purchase Price.
(a) The "Purchase Price" for the Receivables in the Initial Accounts
and the related Purchased Assets as of the Initial Cut-Off Date conveyed to CFC
under this Agreement to the extent not previously paid for shall be payable on
the Initial Issuance Date and shall be an amount equal to 100% of the aggregate
balance of Principal Receivables in those Accounts as of the Initial Cut-Off
Date, adjusted to reflect such factors as Servicing Corp. and CFC mutually agree
will result in a Purchase Price determined to be the fair market value of such
Receivables and the related Purchased Assets. This computation of initial
purchase price should assume no reinvestment in new Receivables. The Purchase
Price for the Receivables (including Receivables in Additional Accounts) and the
related Purchased Assets to be conveyed to CFC under this Agreement which come
into existence after the Initial Issuance Date, shall be payable on Payment Date
following the Monthly Period in which such Receivables and the related Purchased
Assets are conveyed by Servicing Corp. to CFC in an amount equal to 100% of the
aggregate balance of the Principal Receivables so conveyed (the "New Principal
Receivables"), adjusted to reflect such factors as Servicing Corp. and CFC
mutually agree will result in a Purchase Price determined to be the fair market
value of such New Principal Receivables and the related Purchased Assets.
(b) The Purchase Price to be paid by CFC on the Initial Issuance Date
and on each Payment Date following each Monthly Period during which New
Principal Receivables are conveyed to CFC shall be paid (i) in cash or (ii) with
the consent of Servicing Corp., which consent shall be in Servicing Corp.'s sole
discretion and which may be withheld by Servicing Corp. for any reason or for no
reason, by means of capital contributed by Servicing Corp. to CFC, or (iii) with
the consent of Servicing Corp., which consent shall be in Servicing Corp.'s sole
discretion and which may be withheld by Servicing Corp. for any reason or for no
reason, any combination of clauses (i) and (ii).
(c) Notwithstanding any other provision of this Agreement, Servicing
Corp. shall not be obligated to continue selling Receivables to CFC to the
extent that Servicing Corp. is not paid the Purchase Price therefor as provided
herein.
Section 3.02. Adjustments to Purchase Price. The Purchase Price shall
be adjusted on the Payment Date of each calendar month (a "Credit Adjustment")
with respect to any Receivable previously conveyed to CFC by Servicing Corp.
which has since been reversed by Servicing Corp. or the Servicer because of a
rebate, refund, unauthorized charge or billing error to a cardholder because
such Receivable was created in respect of merchandise which was refused or
returned by a cardholder or due to the occurrence of any other event referred to
in Section 3.09 of the Transfer and Servicing Agreement. The amount of such
adjustment shall equal (x) the reduction in the principal balance of such
Receivable resulting from the occurrence of such event multiplied by (y) the
quotient (expressed as a percentage) of (i) the Purchase Price for Principal
Receivables payable on such date computed in accordance with subsection 3.01(a)
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divided by (ii) the Principal Receivables paid for on such date pursuant to such
subsection. In the event that an adjustment pursuant to this Section 3.02 causes
the Purchase Price to be a negative number, Servicing Corp. agrees that, not
later than 11:00 a.m., New York City time, on such date, Servicing Corp. shall
pay to CFC an amount equal to the amount by which the Purchase Price minus the
Credit Adjustment would be reduced below zero.
To secure its obligations to make payments required by this Section
3.02, the Servicing Corp. hereby grants to CFC a security interest in (i) its
rights to receive payments from any Merchant under any Merchant Agreement on
account of rebates, refunds, unauthorized charges, refused or returned
merchandise or any other event or circumstance that causes the Servicer to
adjust downward the amount of any Receivable without receiving Collections
therefor or charging off such amount as uncollectible ("Merchant Adjustment
Payments"), (ii) any collateral security granted to, or guaranty for the benefit
of Servicing Corp. with respect to Merchant Adjustment Payments, (iii) all
amounts received from any Merchant or guarantor on account of Merchant
Adjustment Payments and (iv) all proceeds of such rights and such amounts.
Servicing Corp. may permit or require Merchant Adjustment Payments to be netted
against amounts owed by the Servicing Corp. to a Merchant.
Section 3.03. Use of Name, Logo and Marks. Servicing Corp. does hereby
grant to CFC a non-exclusive license to use the name "Conseco" and all related
identifying trade or service marks, signs, symbols, logos, designs, servicing
software, customer lists, and other intangibles in connection with the servicing
of the Receivables purchased hereunder. The license granted shall be
co-extensive with the term of the Agreement.
[END OF ARTICLE III]
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of Servicing Corp.
Relating to Servicing Corp.
(a) Representations and Warranties of Servicing Corp. Relating to
Servicing Corp. Servicing Corp. hereby represents and warrants to, and agrees
with, CFC as of the Closing Date and on each Addition Date that:
(i) Organization and Good Standing. Servicing Corp. is a
corporation duly organized and validly existing in good standing under
the laws of the State of Delaware, and has, in all material respects,
full power and authority to own its properties and conduct its business
as such properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under
this Agreement.
(ii) Due Qualification. Servicing Corp. is duly qualified to
do business and is in good standing as a foreign corporation and has
obtained all necessary licenses and approvals, in each jurisdiction in
which failure to so qualify or to obtain such licenses and approvals
would (i) render any Credit Card Agreement relating to an Account
specified in this Agreement or any Receivable conveyed to CFC by
Servicing Corp. unenforceable by Servicing Corp. or CFC or (ii) have a
material adverse effect on the Noteholders.
(iii) Due Authorization. The execution, delivery and
performance of this Agreement and the Bank Receivables Purchase
Agreement and any other document or instrument delivered pursuant
hereto, including any Supplemental Conveyance (such other documents or
instruments, collectively, the "Conveyance Papers"), and the
consummation of the transactions provided for in this Agreement, the
Bank Receivables Purchase Agreement and the Conveyance Papers have been
duly authorized by Servicing Corp. by all necessary corporate action on
the part of Servicing Corp.
(iv) No Conflict. The execution and delivery of this
Agreement, the Bank Receivables Purchase Agreement and the Conveyance
Papers by Servicing Corp., the performance of the transactions
contemplated by this Agreement, the Bank Receivables Purchase Agreement
and the Conveyance Papers, and the fulfillment of the terms of this
Agreement, the Bank Receivables Purchase Agreement and the Conveyance
Papers applicable to Servicing Corp. will not conflict with, violate or
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material
default under, any indenture, contract, agreement, mortgage, deed of
trust, or other instrument to which Servicing Corp. is a party or by
which it or any of its properties are bound.
(v) No Violation. The execution, delivery and performance of
this Agreement, the Bank Receivables Purchase Agreement and the
Conveyance Papers by Servicing Corp., the performance of the
transactions contemplated by this Agreement, the Bank Receivables
Purchase Agreement and the Conveyance Papers and the fulfillment of the
terms
12
hereof and thereof applicable to Servicing Corp. will not conflict with
or violate any Requirements of Law applicable to Servicing Corp.
(vi) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of Servicing Corp.,
threatened, against Servicing Corp., before any Governmental Authority
(i) asserting the invalidity of this Agreement, the Bank Receivables
Purchase Agreement or the Conveyance Papers, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, the Bank Receivables Purchase Agreement or the Conveyance
Papers, (iii) seeking any determination or ruling that would materially
and adversely affect the performance by Servicing Corp. of its
obligations under this Agreement, the Bank Receivables Purchase
Agreement or the Conveyance Papers, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement, the Bank Receivables Purchase
Agreement or the Conveyance Papers or (v) seeking to affect adversely
the income tax attributes of CFC or the Issuer under the United States
Federal or Delaware and Minnesota income or franchise tax systems.
(vii) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by Servicing Corp.
in connection with the execution and delivery by Servicing Corp. of
this Agreement, the Bank Receivables Purchase Agreement and the
Conveyance Papers and the performance of the transactions contemplated
by this Agreement, the Bank Receivables Purchase Agreement or the
Conveyance Papers by Servicing Corp. have been duly obtained, effected
or given and are in full force and effect.
(b) Notice of Breach. The representations and warranties set forth in
this Section 4.01 shall survive the transfer and assignment of the Receivables
to CFC and the transfer by CFC to the Issuer and the pledge to the Indenture
Trustee. Upon discovery by Servicing Corp. or CFC of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give written notice to the other party, the Owner Trustee and the
Indenture Trustee within three Business Days following such discovery provided
that the failure to give notice within three Business Days does not preclude
subsequent notice.
Section 4.02. Representations and Warranties of Servicing Corp.
Relating to the Agreement and the Receivables.
(a) Representations and Warranties. Servicing Corp. hereby represents
and warrants to CFC as of the Initial Issuance Date and each subsequent Closing
Date and, with respect to each Additional Account as of the Addition Date that:
(i) this Agreement, the Bank Receivables Purchase Agreement
and each of the Conveyance Papers constitutes a legal, valid and
binding obligation of Servicing Corp. enforceable against Servicing
Corp. in accordance with its terms, except as such enforceability may
be limited by applicable Debtor Relief Laws or general principles of
equity;
(ii) as of the Initial Cut-Off Date with respect to the
Initial Accounts and as of the related Additional Cut-Off Date with
respect to Additional Accounts, Schedule I to this Agreement, as
supplemented to such date, is, or will be on the Required Delivery Date
13
in the case of Additional Accounts, an accurate and complete listing in
all material respects of all the Accounts the Receivables in which were
transferred by Servicing Corp. on the Initial Issuance Date or the
Addition Date, as the case may be, and the information contained
therein with respect to the identity of such Accounts and the
Receivables existing thereunder is, or will be on the Required Delivery
Date in the case of Additional Accounts, true and correct in all
material respects as of the Initial Cut-Off Date or such Additional
Cut-Off Date, as the case may be;
(iii) each Receivable has been conveyed to CFC free and clear
of any Lien;
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required
to be obtained, effected or given by Servicing Corp. in connection with
the conveyance of Receivables to CFC have been duly obtained, effected
or given and are in full force and effect;
(v) this Agreement constitutes a valid sale, transfer and
assignment to CFC of all right, title and interest of Servicing Corp.
in the Receivables conveyed to CFC by Servicing Corp. and the proceeds
thereof and Recoveries identified as relating to the Receivables
conveyed to CFC by Servicing Corp. which have become Defaulted
Receivables or, if this Agreement does not constitute a sale of such
property, it constitutes a grant of a first priority perfected
"security interest" (as defined in the UCC) in such property to CFC,
which, in the case of existing Receivables and the proceeds thereof and
said Recoveries, is enforceable upon execution and delivery of this
Agreement, or, with respect to then existing Receivables in Additional
Accounts, as of the applicable Addition Date, and which will be
enforceable with respect to such Receivables hereafter and thereafter
created and the proceeds thereof upon such creation. Upon the filing of
the financing statements and, in the case of Receivables hereafter
created and the proceeds thereof, upon the creation thereof, CFC shall
have a first priority perfected security or ownership interest in such
property and proceeds;
(vi) on the Initial Cut-Off Date, each Initial Account
specified in Schedule I is an Eligible Account and, on the applicable
Additional Cut-Off Date, each related Additional Account specified in
Schedule I is an Eligible Account;
(vii) on the Initial Cut-Off Date, each Receivable then
existing and conveyed to CFC by Servicing Corp. is an Eligible
Receivables, and on the applicable Additional Cut-Off Date, each
Receivable contained in the related Additional Accounts and conveyed to
CFC by Servicing Corp. is an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable in
any Account, such Receivable is an Eligible Receivable; and
(ix) no selection procedures believed by Servicing Corp. to be
materially adverse to the interests of CFC, the Issuer or the
Noteholders have been used in selecting such Accounts.
(b) Notice of Breach. The representations and warranties set forth in
this Section 4.02 shall survive the transfer and assignment of the Receivables
to CFC and by CFC to the Issuer and the pledge to the Indenture Trustee. Upon
discovery by either Servicing Corp. or CFC of a breach of any of the
representations and warranties set forth in this Section 4.02, the
14
party discovering such breach shall give written notice to the other party and
the Owner Trustee and the Indenture Trustee within three Business Days following
such discovery; provided that the failure to give notice within three Business
Days does not preclude subsequent notice. Servicing Corp. hereby acknowledges
that CFC intends to rely on the representations hereunder in connection with
representations made by CFC to secured parties, assignees or subsequent
transferees including but not limited to transfers made by CFC to the Issuer
pursuant to the Transfer and Servicing Agreement and the security interest
therein granted by the Issuer to the Indenture Trustee pursuant to the Indenture
and that the Owner Trustee and the Indenture Trustee may enforce such
representations directly against Servicing Corp.
Section 4.03. Representations and Warranties of CFC.
(a) Representations and Warranties. As of the Closing Date and each
Addition Date, CFC hereby represents and warrants to, and agrees with, Servicing
Corp. that:
(i) Organization and Good Standing. CFC is a corporation duly
organized and validly existing under the laws of the State of Minnesota
and has, in all material respects, full power and authority to own its
properties and conduct its business as such properties are presently
owned and such business is presently conducted and to execute, deliver
and perform its obligations under this Agreement.
(ii) Due Authorization. The execution and delivery of this
Agreement and the Conveyance Papers to which CFC is a party and the
consummation of the transactions provided for in this Agreement and the
Conveyance Papers to which CFC is a party have been duly authorized by
CFC by all necessary corporate action on the part of CFC.
(iii) No Conflict. The execution and delivery of this
Agreement and the Conveyance Papers to which CFC is a party by CFC, the
performance of the transactions contemplated by this Agreement and the
Conveyance Papers to which CFC is a party, and the fulfillment of the
terms of this Agreement and the Conveyance Papers to which CFC is a
party applicable to CFC, will not conflict with, result in any breach
of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust or other
instrument to which CFC is a party or by which it or any of its
properties are bound.
(iv) No Violation. The execution, delivery and performance of
this Agreement and the Conveyance Papers to which CFC is a party by CFC
and the fulfillment of the terms contemplated herein and therein
applicable to CFC will not conflict with or violate any Requirements of
Law applicable to CFC.
(v) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of CFC, threatened, against CFC,
before any Governmental Authority (i) asserting the invalidity of this
Agreement or the Conveyance Papers, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement
or the Conveyance Papers, (iii) seeking any determination or ruling
that, in the reasonable judgment of CFC, would materially and adversely
affect the performance by CFC of its obligations under this Agreement
or the Conveyance Papers to which CFC is a party or (iv) seeking any
determination or ruling
15
that would materially and adversely affect the validity or
enforceability of this Agreement or the Conveyance Papers.
(vi) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by CFC in
connection with the execution and delivery by CFC of this Agreement and
the Conveyance Papers to which it is a party and the performance of the
transactions contemplated by this Agreement and the Conveyance Papers
to which it is a party have been duly obtained, effected or given and
are in full force and effect.
(b) Notice of Breach. The representations and warranties set forth in
this Section 4.03 shall survive the Conveyance of the Receivables to CFC. Upon
discovery by CFC or Servicing Corp. of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other party.
[END OF ARTICLE IV]
16
ARTICLE V
COVENANTS
Section 5.01. Covenants of Servicing Corp. Servicing Corp. hereby
covenants and agrees with CFC as follows:
(a) Receivables Not To Be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of an Account, Servicing Corp.
will take no action to cause any Receivable to be evidenced by any instrument
(as defined in the UCC) and if any Receivable is so evidenced as a result of any
action by Servicing Corp. it shall be deemed to be an Ineligible Receivable in
accordance with Section 6.01.
(b) Security Interests. Except for the conveyances hereunder, Servicing
Corp. will not sell, pledge, assign or transfer to any other Person, or take any
other action inconsistent with CFC's ownership of the Receivables or the other
Purchased Assets or grant, create, incur, assume or suffer to exist any Lien
(arising through or under Servicing Corp.) on, any Receivable, whether now
existing or hereafter created, or any interest therein, and Servicing Corp.
shall not claim any ownership interest in the Receivables and shall defend the
right, title and interest of CFC in, to and under the Receivables, whether now
existing or hereafter created, against all claims of third parties claiming
through or under Servicing Corp.
(c) Account Allocations. In the event that Servicing Corp. is unable
for any reason to transfer Receivables to CFC in accordance with the provisions
of this Agreement (including, without limitation, by reason of the application
of the provisions of Section 8.02 or any order of any Governmental Authority),
then, in any such event, Servicing Corp. agrees (except as prohibited by any
such order) to allocate and pay to CFC, after the date of such inability, all
amounts in the manner as that by which CFC will allocate and pay such amounts to
the Issuer after such inability by CFC pursuant to Section 2.11 of the Transfer
and Servicing Agreement.
(d) Delivery of Collections or Recoveries. In the event that Servicing
Corp. receives Collections, Recoveries or Merchant Termination Payments (or any
other amounts in respect of the Purchased Assets transferred in accordance with
this Agreement), Servicing Corp. agrees to pay to CFC (or to the Servicer if CFC
so directs) all such Collections, Recoveries and Merchant Termination Payments,
as soon as practicable after receipt thereof.
(e) Notice of Liens. Servicing Corp. shall notify CFC promptly after
becoming aware of any Lien on any Receivable other than the conveyances
hereunder, under the Transfer and Servicing Agreement or under the Indenture.
(f) Documentation of Transfer. Servicing Corp. shall undertake to file
the documents which would be necessary to perfect and maintain the transfer of
the Purchased Assets to CFC.
17
(g) Conduct of Business. Servicing Corp. will carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and do all things necessary to remain
duly organized, validly existing and in good standing as a domestic corporation
in its jurisdiction of organization and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
(h) Compliance with Laws. Servicing Corp. will comply with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it or its respective properties may be subject.
(i) No Sales, Liens, Etc. Except as contemplated by the Transaction
Documents, Servicing Corp. will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Lien
(arising through or under Servicing Corp.) upon or the filing of any financing
statement (arising through or under Servicing Corp.) with respect to, any of the
Receivables.
(j) No Change in Business. Servicing Corp. will not make any change in
the character of its business which change would impair the collectibility of
any substantial portion of the Receivables or have a material adverse effect on
the condition (financial or otherwise), business or properties of Servicing
Corp. or the ability of Servicing Corp. to perform its obligations hereunder.
(k) Protection of Interest in Purchased Assets. Servicing Corp. shall
execute and file such continuation statements and any other documents reasonably
requested by CFC or its successors and assigns or which may be required by law
to fully preserve and protect the interest of CFC in and to the Purchased
Assets.
(l) Reports. Servicing Corp. shall, or shall cause Conseco Bank to
provide to CFC, on a monthly basis, upon request, copies of reports which shall
include delinquent account reports, month-end trial balance, and such other
reports as CFC may reasonably request and which Servicing Corp. can reasonably
obtain or provide.
(m) Bank Numbers. Servicing Corp. shall not, and shall not permit
Conseco Bank to, change the bank number of any Account to a bank number not
specified in Schedule II hereto unless, prior to such change, Servicing Corp.
(i) has given CFC, the Issuer, and the Indenture Trustee at least 30 days' prior
written notice thereof, (ii) has made all filings (including filings under the
applicable Uniform Commercial Code) and shall have taken all other action under
applicable law in each relevant jurisdiction in order to protect and perfect the
ownership or security interest of CFC, the Issuer, and the Indenture Trustee in
such Receivables, and (iii) has delivered to the Indenture Trustee an opinion of
counsel to the effect that each of CFC, the Issuer, and the Indenture Trustee
has a first priority perfected security interest in such Receivables after
giving effect to such change.
(n) Periodic Rate Finance Charges. (i) Except (A) as otherwise required
by any Requirements of Law or (B) as is deemed by Conseco Bank or Servicing
Corp., each as an Account Owner, to be necessary in order for it to maintain its
credit card business or a program operated by such credit card business on a
competitive basis based on a good faith assessment by
18
it of the nature of the competition with respect to the credit business or such
program, it shall not at any time take any action which would have the effect of
reducing the Series Portfolio Yield to a level that could be reasonably expected
to result in an Adverse Effect with respect to any Series based on the
insufficiency of the Series Portfolio Yield or any similar test.
(o) Credit Card Agreements and Guidelines. Subject to compliance with
all Requirements of Law and paragraph (n) above, Conseco Bank or Servicing
Corp., each as Account Owner, may change the terms and provisions of the
applicable Credit Card Agreements or the applicable Credit Card Guidelines in
any respect (including the calculation of the amount or the timing of
charge-offs and the finance charges to be assessed thereon). Notwithstanding the
above, unless required by Requirements of Law or as permitted by paragraph (n)
above, no Account Owner will take any action unless (i) at the time of such
action the Account Owner reasonably believes that such action will not cause an
Amortization Event, Reinvestment Event or Event of Default to occur, and (ii)
such change is made applicable to the comparable segment of the credit card
accounts owned by such Account Owner which have characteristics the same as, or
substantially similar to, the Accounts that are the subject of such change,
except as otherwise restricted by an endorsement, sponsorship, or other
agreement between the Account Owner and an unrelated third party or by the terms
of the Credit Card Agreements.
Section 5.02. Covenants of Servicing Corp. with Respect to Bank
Receivables Purchase Agreement. Servicing Corp., in its capacity as purchaser of
Receivables from Conseco Bank, hereby covenants that Servicing Corp. will at all
times enforce the covenants and agreements of Conseco Bank in such the Bank
Receivables Purchase Agreement.
[END OF ARTICLE V]
19
ARTICLE VI
INDEMNITY AND REPURCHASE OBLIGATION
Section 6.01. Indemnity for Ineligible Receivables. (a) In the event
any representation or warranty under Section 4.02(a)(ii), (iii), (iv), (vi),
(vii), (viii) or (ix) is not true and correct in any material respect as of the
date specified therein with respect to any Receivable or the related Account or
at the time of the sale of a Receivable to CFC, CFC does not have good and
marketable title thereto or such Receivable is not free and clear of all Liens
granted by or arising through Servicing Corp., and in any such case as a result
of such breach CFC is required to accept reassignment of such Receivables
pursuant to Section 2.05(a) of the Transfer and Servicing Agreement, Servicing
Corp. shall accept reassignment of such Ineligible Receivables on the terms and
conditions set forth in subsection 6.01(b).
(b) Servicing Corp. shall accept reassignment of any Ineligible
Receivables previously sold by Servicing Corp. to CFC from CFC on the date on
which such reassignment obligation arises, and shall pay for such reassigned
Ineligible Receivables by paying to CFC, not later than [3:00 p.m.], New York
City time, on such date, an amount equal to the unpaid principal balance of such
Ineligible Receivables plus accrued and unpaid finance charges at the annual
percentage rate applicable to such Receivables from the last date billed through
the end of the Monthly Period in which such reassignment obligation arises. Upon
reassignment of such Ineligible Receivables, CFC shall automatically and without
further action be deemed to sell, transfer, assign, set-over and otherwise
convey to Servicing Corp., without recourse, representation or warranty, all the
right, title and interest of CFC in and to such Ineligible Receivables and
Recoveries related thereto, all monies and amounts due or to become due with
respect thereto and all proceeds thereof; and such reassigned Ineligible
Receivables shall be treated by CFC as collected in full as of the date on which
they were transferred. CFC shall execute such documents and instruments of
transfer or assignment and take such other actions as shall reasonably be
requested by Servicing Corp. to effect the conveyance of such Ineligible
Receivables and other property pursuant to this subsection.
Section 6.02. Reassignment of Noteholders' Interest in Trust Portfolio.
In the event any representation or warranty set forth in Section 4.01(a)(i) or
(iii) or Section 4.02(a)(i) or (v) is not true and correct in any material
respect and as a result of such breach CFC is required pursuant to Section 2.06
of the Transfer and Servicing Agreement, to accept a reassignment of the
Receivables previously sold by Servicing Corp. to CFC, Servicing Corp. shall be
obligated to accept a reassignment of such Receivables from CFC on the terms set
forth below.
Servicing Corp. shall pay to CFC by depositing in the Collection
Account in immediately available funds, not later than 1:00 P.M. New York City
time, on the first Transfer Date following the Monthly Period in which such
reassignment obligation arises, in payment for such reassignment, an amount
equal to the amount specified in Section 2.06 of the Transfer and Servicing
Agreement. Upon any such reassignment of the Receivables on such date, CFC shall
automatically and without further action be deemed to sell, transfer, assign,
set-over and otherwise convey to Servicing Corp., without recourse,
representation or warranty, all the right, title and interest of CFC in and to
the Receivables, all Recoveries related thereto, and all monies
20
and amounts due or to become due with respect thereto and all proceeds thereof.
CFC shall execute such documents and instruments of transfer or assignment and
take such other actions as shall reasonably be requested by Servicing Corp. to
effect the conveyance of such property pursuant to this subsection.
[END OF ARTICLE VI]
21
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01. Conditions to CFC's Obligations Regarding Initial
Receivables. The obligations of CFC to purchase the Receivables in the Initial
Accounts on the Closing Date shall be subject to the satisfaction of the
following conditions:
(a) All representations and warranties of Servicing Corp. contained in
this Agreement shall be true and correct on the Initial Issuance Date with the
same effect as though such representations and warranties had been made on such
date;
(b) All information concerning the Initial Accounts provided to CFC
shall be true and correct as of the Initial Cut-Off Date in all material
respects;
(c) Servicing Corp. shall have (i) delivered to CFC a computer file or
microfiche list containing a true and complete list of all Initial Accounts
identified by bank identification number, bank number and account number and by
the Receivables balance and the Principal Receivables balance as of the Initial
Cut-Off Date and (ii) substantially performed all other obligations required to
be performed by the provisions of this Agreement;
(d) Servicing Corp. shall have recorded and filed, at its expense, any
financing statement with respect to the Receivables now existing and hereafter
created meeting the requirements of applicable state law in such manner and in
such jurisdictions as would be necessary to perfect the sale of and security
interest in the Receivables from Servicing Corp. to CFC, and shall deliver a
file-stamped copy of such financing statements or other evidence of such filings
to CFC;
(e) On or before the Closing Date, (i) CFC, Conseco Bank and the Owner
Trustee shall have entered into the Trust Agreement, (ii) CFC, Conseco Bank, the
Indenture Trustee and the Issuer shall have entered into the Transfer and
Servicing Agreement, (iii) the Issuer, the Servicer and the Indenture Trustee
shall have entered into the Indenture, (iv) Conseco Bank and Servicing Corp.
shall have entered into the Bank Receivables Purchase Agreement and (v) the
closing under all such agreements shall take place simultaneously with the
initial closing hereunder; and
(f) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to CFC, and CFC shall have received from
Servicing Corp. copies of all documents (including, without limitation, records
of corporate proceedings) relevant to the transactions herein contemplated as
CFC may reasonably have requested.
Section 7.02. Conditions Precedent to Servicing Corp.'s Obligations.
The obligations of Servicing Corp. to sell Receivables in the Initial Accounts
on the Closing Date shall be subject to the satisfaction of the following
conditions:
22
(a) All representations and warranties of CFC contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provisions of Section 3.01 hereof shall have been made; and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Servicing Corp., and Servicing Corp. shall
have received from CFC copies of all documents (including, without limitation,
records of corporate proceedings) relevant to the transactions herein
contemplated as Servicing Corp. may reasonably have requested.
[END OF ARTICLE VII]
23
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.01. Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue until such date as may be
mutually agreed by CFC and Servicing Corp. after the termination of the Issuer
as provided in Article VIII of the Trust Agreement.
Section 8.02. Purchase Termination. If Servicing Corp. shall fail
generally to, or admit in writing its inability to, pay its debts as they become
due; or if a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
Servicing Corp. in an involuntary case under any Debtor Relief Law, or for the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of Servicing Corp. or for
any substantial part of Servicing Corp.'s property, or for the winding-up or
liquidation of Servicing Corp.'s affairs and, if instituted against Servicing
Corp., any such proceeding shall continue undismissed or unstayed and in effect,
for a period of 60 consecutive days or upon entry of any order or decree
providing for such relief, or any of the actions sought in such proceeding shall
occur; or if Servicing Corp. shall commence a voluntary case under any Debtor
Relief Law, or if Servicing Corp. shall consent to the entry of an order for
relief in an involuntary case under any Debtor Relief Law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator, conservator or other similar official of, or
for, any substantial part of its property, or any general assignment for the
benefit of its creditors; or Servicing Corp. or any subsidiary of Servicing
Corp. shall have taken any corporate action in furtherance of any of the
foregoing actions (each an "Insolvency Event"); then Servicing Corp. shall
immediately cease to transfer Principal Receivables to CFC and shall promptly
give notice to CFC, the Owner Trustee and the Indenture Trustee of such
Insolvency Event. Notwithstanding any cessation of the transfer to CFC of
additional Principal Receivables, Principal Receivables transferred to CFC prior
to the occurrence of such Insolvency Event and Collections in respect of such
Principal Receivables and Finance Charge Receivables whenever created, accrued
in respect of such Principal Receivables, shall continue to be property of CFC
available for transfer by CFC to the Issuer pursuant to the Transfer and
Servicing Agreement.
[END OF ARTICLE VIII]
24
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally, but only by an instrument in
writing signed by CFC and Servicing Corp. in accordance with this Section 9.01.
This Agreement may be amended from time to time by CFC and Servicing Corp. (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein which
may be inconsistent with any other provisions herein, (iii) to add any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement, (iv) to
change or modify the Purchase Price and (v) to change, modify, delete or add any
other obligation of Servicing Corp. or CFC; provided, however that no amendment
pursuant to clause (iv) or (v) of this Section 9.01 shall be effective unless
Servicing Corp. and CFC have been notified in writing that the Rating Agency
Condition has been satisfied; provided further that, unless the Owner Trustee
and the Indenture Trustee shall consent thereto, CFC shall have delivered to the
Indenture Trustee and the Owner Trustee an Officer's Certificate, dated the date
of such action, stating that CFC reasonably believes that such action will not
have an Adverse Effect on the Issuer, the Indenture Trustee, the Noteholders or
any Series Enhancer. Any reconveyance executed in accordance with the provisions
hereof shall not be considered to be an amendment to this Agreement. A copy of
any amendment to this Agreement shall be sent to the Rating Agencies.
Section 9.02. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.03. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt requested,
to (a) in the case of Servicing Corp., ________________________________________,
Attention: __________________________________ (facsimile no. (___) ___-___), (b)
in the case of CFC, ________________________________________________,
_____________, ______________, ____________, Attention: ____________________
(facsimile no. (__) ___-____), (c) in the case of the Owner Trustee,
_______________________________________, Attention: _______________________
(facsimile no.: (___) ___-____), (d) or in the case of the Indenture Trustee,
_______________________________, Attention: ____________________ (facsimile no.:
(___) ___-____); or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
Section 9.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, and terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
25
Section 9.05. Assignment. Notwithstanding anything to the contrary
contained herein, other than CFC's assignment of its right, title, and interest
in, to, and under this Agreement to the Issuer and the Issuer's grant of a
security interest in all of its right, title and interest in, to and under this
Agreement to the Indenture Trustee for the benefit of the Noteholders and any
Series Enhancers, this Agreement may not be assigned by the parties hereto;
provided, however, that Servicing Corp. shall have the right to assign its
right, title and interest in, to and under this Agreement to (i) any successor
by merger assuming this Agreement which assumes the obligations of this
Agreement or (ii) any entity; provided that the Rating Agency has advised CFC
and Servicing Corp. that the Rating Agency Condition has been satisfied.
Section 9.06. Acknowledgement and Agreement of Servicing Corp. By
execution below, Servicing Corp. expressly acknowledges and agrees that all of
CFC's right, title, and interest in, to, and under this Agreement, including,
without limitation, all of CFC's right, title, and interest in and to the
Receivables purchased pursuant to this Agreement, will be assigned by CFC to the
Issuer, and a security interest therein will be granted by the Issuer to the
Indenture Trustee for the benefit of the Noteholders and any Series Enhancers,
and Servicing Corp. consents to such assignments. Servicing Corp. further agrees
that notwithstanding any claim, counterclaim, right of setoff or defense which
it may have against CFC, due to a breach by CFC of this Agreement or for any
other reason, and notwithstanding the bankruptcy of CFC or any other event
whatsoever, Servicing Corp.'s sole remedy shall be a claim against CFC for money
damages, and then only to the extent of funds available to CFC, and in no event
shall Servicing Corp. assert any claim on or any interest in the Receivables or
any proceeds thereof or take any action which would reduce or delay receipt by
CFC or the Issuer of collections with respect to the Receivables. Additionally,
Servicing Corp. agrees that any amounts payable by Servicing Corp. to CFC
hereunder which are to be paid by CFC to the Issuer for the benefit of the
Noteholders and any Series Enhancers shall be paid by Servicing Corp., on behalf
of CFC, directly to the Issuer.
Section 9.07. Further Assurances. CFC and Servicing Corp. agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other party, the
Owner Trustee or the Indenture Trustee more fully to effect the purposes of this
Agreement and the Conveyance Papers, including, without limitation, the
execution of any financing statements or continuation statements or equivalent
documents relating to the Receivables for filing under the provisions of the UCC
or other law of any applicable jurisdiction.
Section 9.08. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of CFC or Servicing Corp., any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
26
Section 9.09. Counterparts. This Agreement and all Conveyance Papers
may be executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 9.10. Binding; Third-Party Beneficiaries. This Agreement and
the Conveyance Papers will inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. The Issuer
and the Indenture Trustee (on behalf of the Noteholders) shall be considered
third-party beneficiaries of this Agreement.
Section 9.11. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Conveyance Papers set forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement and the
Conveyance Papers. This Agreement and the Conveyance Papers may not be modified,
amended, waived or supplemented except as provided herein.
Section 9.12. Headings. The headings are for purposes of reference only
and shall not otherwise affect the meaning or interpretation of any provision
hereof.
Section 9.13. Schedules and Exhibits. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this Agreement
and are incorporated into this Agreement for all purposes.
Section 9.14. Survival of Representations and Warranties. All
representations, warranties and agreements contained in this Agreement or
contained in any Supplemental Conveyance shall remain operative and in full
force and effect and shall survive conveyance of the Receivables by CFC to the
Issuer pursuant to the Transfer and Servicing Agreement and the grant of a
security interest therein by the Issuer to the Indenture Trustee pursuant to the
Indenture.
Section 9.15. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, Servicing Corp. shall not, prior to the date
which is one year and one day after the termination of this Agreement,
acquiesce, petition or otherwise invoke or cause CFC to invoke the process of
any Governmental Authority for the purpose of commencing or sustaining a case
against CFC under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, conservator, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of CFC or any substantial part of its
property or ordering the winding-up or liquidation or the affairs of CFC.
[END OF ARTICLE IX]
27
IN WITNESS WHEREOF, Servicing Corp. and CFC have caused this
Receivables Purchase Agreement to be duly executed by their respective officers
as of the day and year first above written.
CONSECO FINANCE SERVICING CORP.
By:
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Name:
Title:
CONSECO FINANCE CREDIT CARD FUNDING CORP.
By:
----------------------------------------
Name:
Title:
Schedule I
LIST OF ACCOUNTS
[Delivered Separately]
Schedule II
Bank Identification Numbers and Bank Numbers
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Bank Identification Numbers Bank Numbers
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Exhibit A
FORM OF SUPPLEMENTAL CONVEYANCE OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(As required by Section 2.04 of
the Receivables Purchase Agreement)
SUPPLEMENTAL CONVEYANCE No. ___ OF RECEIVABLES IN AUTOMATIC ADDITIONAL
ACCOUNTS, dated as of _____________________,/1/ by and between CONSECO FINANCE
SERVICING CORP., a Delaware corporation ("Servicing Corp."), and CONSECO FINANCE
CREDIT CARD FUNDING CORP., a Minnesota corporation ("CFC"), pursuant to the
Receivables Purchase Agreement referred to below.
WITNESSETH
WHEREAS, Servicing Corp. and CFC are parties to the Receivables
Purchase Agreement, dated as of May 1, 2001 (the "Agreement");
WHEREAS, pursuant to the Agreement, Servicing Corp. wishes to designate
Additional Accounts to be included as Accounts and to sell the Receivables of
such Additional Accounts (as each such term is defined in the Agreement),
whether now existing or hereafter created, to CFC; and
WHEREAS, CFC is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, Servicing Corp. and CFC hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Agreement unless otherwise defined
herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, _______________________, _______.
"Additional Cut-Off Date" shall mean, with respect to the Additional
Accounts designated hereby, ________________, _______.
2. Designation of Additional Accounts. On or before the date hereof,
Servicing Corp. will deliver to CFC a computer file or microfiche list
containing a true and complete schedule identifying all such Additional
Accounts (the "Additional Accounts") specifying for each such
Supplemental Account, as of the Additional Cut-Off Date, its account
number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal
--------
/1/ To be dated as of the applicable Addition Date.
Receivables outstanding in such Account, which computer file or
microfiche list shall supplement Schedule 1 to the Agreement.
3. Conveyance of Receivables. (a) Servicing Corp. does hereby, sell,
transfer, assign, set over and otherwise convey, without recourse
except as set forth in the Agreement, to CFC, all its right, title and
interest in, to and under the Receivables of such Additional Accounts
existing at the close of business on the Additional Cut-Off Date and
thereafter created from time to time until the termination of the
Agreement, all Recoveries related thereto, all monies due or to become
due and all amounts received or receivable with respect thereto and all
proceeds (including "proceeds" as defined in the UCC) thereof.
(b) If necessary, Servicing Corp. agrees to record and file, at its own
expense, financing statements (and continuation statements when applicable) with
respect to the Receivables in Additional Accounts existing on the Additional
Cut-Off Date and thereafter created meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect, and
maintain perfection of, the sale and assignment of such Receivables to CFC, and
to deliver a file-stamped copy of each such financing statement or other
evidence of such filing to CFC on or prior to the Addition Date.
(c) In connection with such sale, Servicing Corp. further agrees, at
its own expense, on or prior to the date of this Supplemental Conveyance, to
indicate in the appropriate computer files that Receivables created in
connection with the Additional Accounts and designated hereby have been conveyed
to CFC pursuant to the Agreement and this Supplemental Conveyance.
(d) It is the intention of the parties hereto that the arrangements
with respect to the property described in Section 3(a) hereof shall constitute
either a contribution to capital of CFC or a purchase and sale of such property
and not a loan. In the event, however, that it were to be determined that the
transactions evidenced hereby constitute a loan and not a contribution to
capital or a purchase and sale, this Supplemental Conveyance shall constitute a
security agreement under applicable law, and Servicing Corp. does hereby grant
to CFC a security interest in all of its right, title and interest, whether now
owned or hereafter acquired, in and to the Receivables in the Additional
Accounts existing on the Additional Cut-Off Date and thereafter created, all
Recoveries related thereto, all monies due or to become due and all amounts
received or receivable with respect thereto, all money, accounts, general
intangibles, chattel paper, instruments, documents, goods, investment property,
deposit accounts, certificates of deposit, letters of credit, and advices of
credit consisting of, arising from or related to the foregoing, and all
"proceeds" (including "proceeds" as defined in the UCC) thereof.
4. Acceptance by CFC. CFC hereby acknowledges its acceptance of all right,
title and interest to the property, existing on the Additional Cut-Off
Date and thereafter created, conveyed to CFC pursuant to Section 3(a)
of this Supplemental Conveyance. CFC further acknowledges that, prior
to or simultaneously with the execution and delivery of this
Supplemental Conveyance, Servicing Corp. delivered to CFC the computer
file or microfiche list described in Section 2 of this Supplemental
Conveyance.
5. Representations and Warranties of Servicing Corp. Servicing Corp.
hereby represents and warrants to CFC, as the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Supplemental Conveyance
constitutes a legal, valid and binding obligation of Servicing Corp. enforceable
against Servicing Corp. in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(b) Eligibility of Accounts. As of the Additional Cut-Off Date, each
Supplemental Account designated hereby is an Eligible Account;
(c) Insolvency. As of each of the Additional Cut-Off Date and the
Addition Date, no Insolvency Event with respect to Servicing Corp. has occurred
and the transfer by Servicing Corp. of Receivables arising in the Additional
Accounts to CFC has not been made in contemplation of the occurrence thereof;
(d) Amortization Event; Event of Default. Servicing Corp. reasonably
believes that (A) the transfer of the Receivables arising in the Additional
Accounts will not, based on the facts known to Servicing Corp., then or
thereafter cause an Amortization Event or Event of Default to occur with respect
to any Series and (B) no selection procedure was utilized by Servicing Corp.
which would result in the selection of Additional Accounts (from among the
available Eligible Accounts available to Servicing Corp.) that would be
materially adverse to the interests of CFC or the Noteholders of any Series as
of the Addition Date;
(e) Security Interest. This Supplemental Conveyance constitutes a valid
sale, transfer and assignment to CFC of all right, title and interest, whether
owned on the Additional Cut-Off Date or thereafter acquired, of Servicing Corp.
in the Receivables existing on the Additional Cut-Off Date or thereafter created
in the Additional Accounts, all Recoveries related thereto, all monies due or to
become due and all amounts received or receivable with respect thereto and the
"proceeds" (including "proceeds" as defined in the applicable UCC) thereof, or,
if this Supplemental Conveyance does not constitute a sale of such property, it
constitutes a grant of a "security interest" (as defined in the applicable UCC)
in such property to CFC, which, in the case of existing Receivables and the
proceeds thereof, is enforceable upon execution and delivery of this
Supplemental Conveyance, and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof upon such creation. Upon
the filing of the financing statements described in Section 3 of this
Supplemental Conveyance and, in the case of the Receivables hereafter created
and the proceeds thereof, upon the creation thereof, CFC shall have a first
priority perfected security or ownership interest in such property;
(f) No Conflict. The execution and delivery by Servicing Corp. of this
Supplemental Conveyance, the performance of the transactions contemplated by
this Supplemental Conveyance and the fulfillment of the terms hereof applicable
to Servicing Corp., will not conflict with or violate any Requirements of Law
applicable to Servicing Corp. or conflict with, result in any breach of any of
the material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any indenture, contract,
agreement,
mortgage, deed of trust or other instrument to which Servicing Corp. is a party
or by which it or its properties are bound;
(g) No Proceedings. There are no proceedings or investigations,
pending, or to the best knowledge of Servicing Corp., threatened, against
Servicing Corp. before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (i) asserting the invalidity of
this Supplemental Conveyance, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Supplemental Conveyance, (iii) seeking any
determination or ruling that, in the reasonable judgment of Servicing Corp.,
would materially and adversely affect the performance by Servicing Corp. of its
obligations under this Supplemental Conveyance or (iv) seeking any determination
or ruling that would materially and adversely affect the validity or
enforceability of this Supplemental Conveyance; and
(h) All Consents. All authorizations, consents, orders or approvals of
any court or other governmental authority required to be obtained by Servicing
Corp. in connection with the execution and delivery of this Supplemental
Conveyance by Servicing Corp. and the performance of the transactions
contemplated by this Supplemental Conveyance by Servicing Corp., have been
obtained.
6. Ratification of Agreement. As supplemented by this Supplemental
Conveyance, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Supplemental Conveyance shall
be read, taken and construed as one and the same instrument.
7. Counterparts. This Supplemental Conveyance may be executed in two or
more counterparts, and by different parties on separate counterparts,
each of which shall be an original, but all of which shall constitute
one and the same instrument.
8. GOVERNING LAW. THIS SUPPLEMENTAL CONVEYANCE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
IN WITNESS WHEREOF, Servicing Corp. and CFC have caused this
Supplemental Conveyance to be duly executed by their respective officers as of
the day and year first above written.
CONSECO FINANCE SERVICING CORP.
By:
---------------------------------
Name:
Title:
CONSECO FINANCE CREDIT CARD FUNDING
CORP.
By:
---------------------------------
Name:
Title:
SCHEDULE 1
List of Accounts
