AMENDMENT TO THE FIRST RESIDUAL FACILITY
(ASSET ASSIGNMENT AGREEMENT)
This AMENDMENT (this "Amendment"), dated as of September 22, 2000 by
and among XXXXXX XXX INC., as the assignee of Xxxxxx Commercial Paper Inc. (the
"Lender") and GREEN TREE RESIDUAL FINANCE CORP. I (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender are party to that certain Asset
Assignment Agreement, dated as of February 13, 1998, (such agreement, as amended
as of the date hereof, the "Agreement"; capitalized terms used herein without
definition are being used as defined in the Agreement);
WHEREAS, the Borrower and other parties have entered into the Amended
and Restated Agreement dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "Umbrella Agreement") pursuant to
which such parties have agreed to enter into amendments and other agreements in
connection with existing arrangements, including the Agreement; and
WHEREAS, the Borrower and the Lender have agreed to amend the
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:
Section 1. Amendments to the Agreement. On the Effective Date (under
and as defined in the Umbrella Agreement), the Agreement shall be amended as
follows:
(a) the definition of "Guarantor" in Section 1 (Definitions) of the
Agreement is amended and restated in its entirety to read as follows:
"Guarantor" means Conseco Finance Corp., formerly Green Tree
Financial Corporation, and any successor thereto.
(b) the definition of "Loan Amount" in Section 1 (Definitions) is
amended and restated in its entirety to read as follows:
"Loan Amount" means (i) the lesser of (a) $600,000,000 and (b)
50% of the Lender Value of the Pledged Assets less (ii) the Purchase
Price of all Purchased Securities and Additional Purchased Securities
subject to Transactions under the Master Repurchase Agreement, dated
September 29, 1999, between the Lender and Xxxxxx Brothers Inc. (each
such term being used as defined in such agreement).
(c) the definition of "Maturity Date" in Section 1 (Definitions) is
amended and restated in its entirety to read as follows:
"Maturity Date" means February 15, 2003 or such earlier date on
which this Agreement shall terminate in accordance with the provisions
thereof.
(d) the second sentence of clause (b) of Section 2 (Loan) of the
Agreement is deleted in its entirety.
(e) Exhibit D to the Agreement is replaced by Annex 1 attached hereto.
(f) subclauses (i), (ii) and (iii) of clause (g) of Section 7 are
hereby deleted in their entirety.
(g) clause (k) of Section 7 (Borrower Covenants) of the Agreement is
amended and restated in its entirety to read as follows:
k. So long as the Lender shall be committed to lend hereunder,
the Guarantor on a consolidated basis with its Subsidiaries shall:
(i) at all times commencing December 31, 2000,
maintain an Adjusted Tangible Net Worth of at least
$1,950,000,000;
(ii) for the three-month period ending on the last day
of the Fiscal Quarter ending December 31, 2000, the
six-month period ending on the last day of the Fiscal
Quarter ending March 31, 2001, the nine-month period ending
on the last day of the Fiscal Quarter ending June 30, 2001,
the twelve-month period ending on the last day of the Fiscal
Quarter ending September 30, 2001, and the twelve-month
period ending on the last day of each subsequent Fiscal
Quarter, maintain a Fixed Charge Coverage Ratio of not less
than 1.0:1.0;
(iii) at all times commencing December 31, 2000,
maintain a ratio of GAAP Net Worth to Total Managed
Receivables of not less than 4:100;
(iv) for each Fiscal Quarter commencing with the Fiscal
Quarter ending December 31, 2000, maintain a ratio of
Non-Warehouse Debt to GAAP Net Worth of not more than
1.0:2.0; and
(v) for the three-month period ending on the last day
of the Fiscal Quarter ending December 31, 2000, the
six-month period ending on the last day of the Fiscal
Quarter ending March 31, 2001, the nine-month period ending
on the last day of the Fiscal Quarter ending June 30, 2001,
the twelve-month period ending on the last day of the Fiscal
Quarter ending September 30, 2001, and the twelve-month
period ending on the last day of each
subsequent Fiscal Quarter, maintain positive Operating Cash
Flow.
For purposes of this clause (k):
"Adjusted Tangible Net Worth" means, at any date, the
sum of (a) GAAP Net Worth plus (b) the amount of intercompany
indebtedness converted to Preferred Stock on the Effective Date in
accordance with Section 1(e) (to the extent such Preferred Stock is
not included in GAAP Net Worth), plus (c) writedowns after the
Effective Date of all IOs and capitalized servicing rights of the
Guarantor and its Subsidiaries, in an aggregate amount not to exceed
$450,000,000, minus (d) any indebtedness owing by the Guarantor or any
of its Affiliates (other than the Guarantor or any Subsidiary thereof)
to the Guarantor or any Subsidiary thereof as of such date, minus (e)
any amount that would be included on the consolidated balance sheet of
the Guarantor as goodwill and deferred charges in accordance with
GAAP.
"Cash Equivalents" means (a) securities issued or fully
guaranteed or insured by the United States government or any agency
thereof, (b) certificates of deposit, eurodollar time deposits,
overnight bank deposits and bankers' acceptances of any commercial
bank organized under the laws of the United States, any state thereof,
the District of Columbia, any foreign bank, or its branches or
agencies (fully protected against currency fluctuations) which, at the
time of acquisition, are rated at least "A-1" by Standard & Poor's
Rating Services ("S&P") or "P-1" by Xxxxx'x Investors Services, Inc.
("Moody's"), (c) commercial paper of an issuer rated at least "A-1" by
S&P or "P-1" by Moody's, and (d) shares of any money market fund that
(i) has at least 95% of its assets invested continuously in the types
of investments referred to in clauses (a) through (c) above, (ii) has
net assets of not less than $500,000,000 and (iii) is rated at least
"A-1" by S&P or "P-1" by Moody's; provided, however, that the
maturities of all obligations of the type specified in clauses (a)
through (c) above shall not exceed 180 days.
"Fiscal Quarter" means each of the four quarterly
accounting period comprising a Fiscal Year.
"Fiscal Year" means the twelve-month accounting period
commencing on January 1 and ending December 31 of each year.
"Fixed Charge Coverage Ratio" means, for any period,
the ratio of (a) Pre Tax Operating Income for such period to (b)
Interest Expense for such period.
"GAAP Net Worth" means, at any date, the stockholders'
equity that would be reflected on a consolidated balance sheet of the
Company and its subsidiaries at such date prepared in accordance with
GAAP, inclusive of
Preferred Stock, to the extent such Preferred Stock is not included in
stockholders' equity in accordance with GAAP.
"indebtedness" of the Guarantor means the Guarantor's
(a) obligations for borrowed money, (b) obligations representing the
deferred purchase price of property (whether real or personal,
tangible or intangible) or services (other than accounts payable
arising in the ordinary course of such the Guarantor's business
payable on terms customary in the trade), (c) obligations, whether or
not assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by the
Guarantor, (d) obligations which are evidenced by notes, acceptances,
or similar instruments, (e) capitalized lease obligations, (f) rate
hedging obligations, (g) contingent obligations of any type, (h)
obligations for which the Guarantor is obligated pursuant to or in
respect of a letter of credit or similar instrument and (i) repurchase
obligations or liabilities of the Guarantor with respect to accounts
or notes receivable and chattel paper sold by such Person.
"Interest Expense" means, for any period, all interest
paid or accrued during such period by the Guarantor and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP.
"Net Income" means, for any period, with respect to the
Guarantor and its Subsidiaries on a consolidated basis (other than any
Subsidiary which is prohibited from declaring or paying dividends or
otherwise advancing funds to its parent whether by contract or
otherwise), cumulative net income earned during such period as
determined in accordance with GAAP.
"Non-Warehouse Debt" means, at any time, all
indebtedness of the Guarantor for borrowed money (including without
limitation all liabilities in respect of deposit products, notes
payable, note payables to the Guarantor (net of receivables due from
the Guarantor), bonds and other indebtedness) less the sum of
Unrestricted Cash and Cash Equivalents at such time plus the book
value of all finance receivables and plus 85% of servicing advance
receivables.
"Operating Cash Flow" means, for any period, cash flow
from the operations of the Guarantor for such period (as reported
under "Cash Flow From Operations" in the Guarantor's statements of
cash flow filed with the Securities and Exchange Commission) for such
period.
"Pre Tax Operating Income" means, for any period, Net
Income for such period, plus (a) income and franchise taxes paid or
accrued during such period, (b) Interest Expense, (c) losses derived
from discontinued operations of the Guarantor and its Subsidiaries
during such period and (d) extraordinary non-recurring losses of the
Guarantor and its Subsidiaries resulting from changes in the
application of GAAP applicable during such period in an amount not to
exceed $450,000,000 minus (a) income derived from discontinued
operations of
the Guarantor and its Subsidiaries during such period and (b)
extraordinary non-recurring gains of the Guarantor and its
Subsidiaries.
"Subsidiary" means (a) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall
at the time be owned or controlled, directly or indirectly, by the
Guarantor or by one or more of its Subsidiaries or by the Guarantor
and one or more of its Subsidiaries, or (b) any partnership, limited
liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time by so owned or controlled.
"Total Managed Receivables" means, for any period, the
"averaged managed receivables", as such term is reported in the
related filing with the Securities and Exchange Commission for such
period.
"Unrestricted Cash" means, for any period, the average
daily balance during such period of available cash on deposit in bank
accounts of the Guarantor, provided the accounts into which such cash
is deposited are not subject to any lien, security interest or control
agreement or otherwise encumbered (excluding customary rights of
set-off or restricted in any way. No new borrowings after the
Effective Date from the Guarantor or its Subsidiaries shall constitute
Unrestricted Cash.
(h) clause (o) of Section 8 (Events of Default) of the Agreement is
amended and restated in its entirety to read as follows:
(o) an "event of default" shall occur pursuant to the New Bank
Facility Documents (each as defined in the Amended and Restated
Umbrella Agreement, dated as of September 22, 2000, by and among
Conseco Inc., CIHC Incorporated, Green Tree Finance Corp - Five, the
Borrower and Xxxxxx Brothers Holdings Inc., as amended, supplemented
or otherwise modified from time to time (the "Umbrella Agreement")),
the Warehouse Facility Documents, any other Residual Facility Document
or any party to the Umbrella Agreement (other than Xxxxxx Brothers
Holdings Inc.) shall fail to comply with any terms, covenants or
agreements contained in the Umbrella Agreement on its part to be
performed or observed or any representation or warranty made under or
in connection with the Umbrella Agreement shall be incorrect in any
material respect when made.
(i) new clauses (q) and (r) are added to Section 8 (Events of Default)
of the Agreement to read as follows:
(q) (A) the Guaranty, dated as of September 22, 2000, made by
CIHC, Incorporated for the benefit of the Borrower shall cease to be
valid, binding and enforceable or CIHC, Incorporated or Conseco, Inc.
or any Subsidiary thereof shall so state in writing or (B) any
"Subordinated Obligations" under and as defined in such guaranty shall
cease, for any reason, to be validly subordinated to
the obligations of CIHC under such guaranty as provided in the
relevant provisions thereof or CIHC, Incorporated or Conseco, Inc. or
any Subsidiary thereof shall so state in writing.
(r) Conseco, Inc. or the Guarantor shall enter into any agreement
that prohibits, restricts or imposes additional conditions to, or
otherwise modifies in any manner adverse to Xxxxxx Brothers Holdings
Inc. or any of its Subsidiaries, the terms as in effect as of the
Effective Date (as defined in the Umbrella Agreement) permitting
Conseco, Inc. or any of its Subsidiaries to make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase of any capital stock, bonds, notes,
debentures or other debt securities of, or any assets constituting a
business unit of, or any other investment in, the Guarantor or any of
its Subsidiaries.
Section 2. Costs and Expenses. Pursuant to Section 10(b) of the
Agreement, the Borrower agrees to pay on demand all reasonable costs and
expenses of the Lender in connection with this Amendment.
Section 3. Representations and Warranties.
(a) The Borrower hereby represents and warrants that before and after
giving effect to this Amendment, (i) no Default or Event of Default has occurred
and is continuing and (ii) the representations and warranties of the Borrower
contained in Section 5 of the Agreement and Section 8 of the Umbrella Agreement
are true and correct.
(b) The execution, delivery and performance by the Borrower of this
Amendment and the other agreements to which it is or is to be a party pursuant
to the Umbrella Agreement have been duly authorized by all necessary or proper
corporate action on the part of the Borrower and do not require the consent or
approval of any Person that has not been obtained.
(c) The Borrower acknowledges that it has no defense, offset, claim or
counterclaim with respect to any of its obligations to make payments under the
Agreement and the other agreements to which it is or is to be a party pursuant
to the Umbrella Agreement.
(d) This Amendment and each of the other agreements, as amended
hereby, to which the Borrower is a party constitute legal, valid and binding
obligations of the Borrower enforceable against the Borrower in accordance with
their respective terms.
Section 4. Reference to and Effect on the Agreement and Ancillary
Documents.
(a) Except as specifically amended herein, the Agreement is and shall
continue to be in full force and effect and is hereby in all respects ratified
and confirmed. On and after the date hereof each reference in the Agreement to
"this Agreement,"
"hereunder," "hereof" or words of like import referring to the Agreement, and
each reference in each other documents executed in connection with or pursuant
to the Agreement to the "Agreement," the "Residual Agreement" or "thereunder" or
"thereof" (when referring to the Agreement) or words of like import referring to
the Agreement, shall mean and be a reference to the Agreement as amended hereby.
(b) Except as specifically amended above, the Agreement and all
documents executed pursuant thereto or in connection therewith are and shall
continue to be in full force and effect and are hereby in all respects ratified
and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as an amendment, waiver or
modification of any right, power or remedy of the Lender, nor constitute an
amendment, waiver or modification of any other provisions of the Agreement or
any other document executed in connection therewith.
Section 5. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof.
Section 6. Governing Law. This Amendment shall be governed by, and
construed and enforced in accordance with, the law of the State of New York.
Section 7. Headings. Section headings contained in this Amendment are
included herein for the convenience of reference only and shall not constitute
part of this Amendment for any other purpose.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officer thereto duly authorized, as of the date
first above written.
XXXXXX XXX INC.
By: /s/Xxxxxxx Xxxxxxxx
------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
GREEN TREE FINANCE CORP. I
By: /s/Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and Treasurer
