EXHIBIT 4.2
SALE AND SERVICING AGREEMENT
among
CONSECO FINANCE HOME LOAN TRUST 1999-G
Issuer
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
and
CONSECO FINANCE CORP.
as Originator, Servicer and Guarantor
Dated as of September 1, 1999
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................. 1-1
SECTION 1.01. General....................................................................... 1-1
SECTION 1.02. Specific Terms................................................................ 1-1
ARTICLE II TRANSFER OF LOANS........................................................................ 2-1
SECTION 2.01. Transfer of Loans............................................................. 2-1
SECTION 2.02. Conditions to Acceptance by Owner Trustee..................................... 2-1
SECTION 2.03. Conveyance of the Subsequent Loans............................................ 2-3
ARTICLE III REPRESENTATIONS AND WARRANTIES........................................................... 3-1
SECTION 3.01. Representations and Warranties Regarding the Seller and
Originator and Covenants of the Originator.................................... 3-1
SECTION 3.02. Representations and Warranties Regarding Each Loan............................ 3-3
SECTION 3.03. Representations and Warranties Regarding the Loans
in the Aggregate.............................................................. 3-8
SECTION 3.04. Representations and Warranties Regarding the Loan Files....................... 3-12
SECTION 3.05. Repurchase of Loans for Breach of Representations
and Warranties................................................................ 3-12
SECTION 3.06. Additional Representations and Warranties..................................... 3-13
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION
OF SECURITY INTERESTS.................................................................... 4-1
SECTION 4.01. Custody of Loans.............................................................. 4-1
SECTION 4.02. Filings....................................................................... 4-1
SECTION 4.03. Name Change or Relocation..................................................... 4-2
SECTION 4.04. Chief Executive Office........................................................ 4-2
SECTION 4.05. Costs and Expenses............................................................ 4-2
ARTICLE V SERVICING OF LOANS....................................................................... 5-1
SECTION 5.01. Responsibility for Loan Administration........................................ 5-1
SECTION 5.02. Standard of Care.............................................................. 5-1
SECTION 5.03. Records....................................................................... 5-1
SECTION 5.04. Inspection; Computer Tape..................................................... 5-1
SECTION 5.05. Collections................................................................... 5-2
SECTION 5.06. Enforcement................................................................... 5-3
SECTION 5.07. Satisfaction of Loans......................................................... 5-4
SECTION 5.08. Costs and Expenses............................................................ 5-4
SECTION 5.09. Maintenance of Insurance...................................................... 5-4
SECTION 5.10. Deposit of Funds.............................................................. 5-5
SECTION 5.11. Monthly Reports; Certificate of Servicing Officer............................. 5-5
SECTION 5.12. Annual Report of Accountants.................................................. 5-5
SECTION 5.13. Certain Duties of the Servicer Under the Trust Agreement...................... 5-6
SECTION 5.14. Annual Statement as to Compliance; Notice of Servicer
Termination Event............................................................. 5-6
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SECTION 5.15. Maintenance of Lien Interests in Real Property................................ 5-6
SECTION 5.16. Covenants, Representations, and Warranties of Servicer........................ 5-7
SECTION 5.17. Purchase of Loans Upon Breach of Covenant..................................... 5-9
ARTICLE VI DISTRIBUTIONS; TRUST ACCOUNTS; LIMITED GUARANTY;
STATEMENTS TO SECURITYHOLDERS............................................................ 6-1
SECTION 6.01. Trust Accounts................................................................ 6-1
SECTION 6.02. Collection Account Deposits................................................... 6-2
SECTION 6.03. Permitted Withdrawals......................................................... 6-2
SECTION 6.04. Advances ..................................................................... 6-3
SECTION 6.05. Limited Guaranty.............................................................. 6-3
SECTION 6.06. Distributions................................................................. 6-4
SECTION 6.07. Statements to Securityholders................................................. 6-6
SECTION 6.08. Pre-Funding Account........................................................... 6-8
ARTICLE VII SERVICE TRANSFER......................................................................... 7-1
SECTION 7.01. Events of Termination......................................................... 7-1
SECTION 7.02. Transfer...................................................................... 7-2
SECTION 7.03. Indenture Trustee to Act; Appointment of Successor............................ 7-3
SECTION 7.04. Notification to Securityholders............................................... 7-3
SECTION 7.05. Effect of Transfer............................................................ 7-4
SECTION 7.06. Transfer of Collection Account................................................ 7-4
ARTICLE VIII TERMINATION.............................................................................. 8-1
SECTION 8.01. Class C Certificateholder's Purchase Option; Auction Sale;
Additional Principal Distribution Amount...................................... 8-1
SECTION 8.02. Liquidation of Trust Estate................................................... 8-3
ARTICLE IX INDEMNITIES.............................................................................. 9-1
SECTION 9.01. Originator's Indemnities...................................................... 9-1
SECTION 9.02. Liabilities to Obligors....................................................... 9-1
SECTION 9.03. Servicer's Indemnities........................................................ 9-1
SECTION 9.04. Operation of Indemnities...................................................... 9-1
ARTICLE X MISCELLANEOUS............................................................................ 10-1
SECTION 10.01. Servicer Not to Assign Duties or Resign; Delegation of
Servicing Duties.............................................................. 10-1
SECTION 10.02. Assignment or Delegation by Originator........................................ 10-1
SECTION 10.03. Amendment..................................................................... 10-2
SECTION 10.04. Notices....................................................................... 10-3
SECTION 10.05. Merger and Integration........................................................ 10-4
SECTION 10.06. Headings...................................................................... 10-5
SECTION 10.07. Governing Law................................................................. 10-5
SECTION 10.08. Limitation of Liability....................................................... 10-5
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EXHIBIT A - FORM OF ASSIGNMENT........................................................................ A-1
EXHIBIT B - FORM OF CERTIFICATE REGARDING REPURCHASED LOANS........................................... B-1
EXHIBIT C - FORM OF MONTHLY REPORT.................................................................... C-1
EXHIBIT D - FORM OF CERTIFICATE OF SERVICING OFFICER.................................................. D-1
EXHIBIT E - FORM OF ADDITION NOTICE................................................................... E-1
EXHIBIT F - FORM OF SUBSEQUENT TRANSFER INSTRUMENT.................................................... F-1
EXHIBIT G - FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)....................................... G-1
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THIS SALE AND SERVICING AGREEMENT, dated as of September 1, 1999, among
Conseco Finance Home Loan Trust 1999-G (the "Trust"), Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), and Conseco Finance Corp., a
corporation organized and existing under the laws of the State of Delaware, as
originator of the loans described herein (the "Originator"), as Servicer (the
"Servicer") and as Limited Guarantor of the Class B-2 Certificates (the
"Guarantor").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
purchases, originates and services home improvement loans and home equity loans,
which loans provide for installment payments by or on behalf of the borrowers
and grant mortgages, deeds of trust or security deeds on certain real estate
securing such loans;
WHEREAS, the Seller, in the ordinary course of its business, acquires
pools of home improvement loans and home equity loans and other receivables from
Conseco Finance Corp. and arranges the securitization of those receivables; and
WHEREAS, the Seller, the Originator, the Servicer, the Guarantor and
the Trust wish to set forth the terms and conditions on which the Trust will
acquire the Loans (as defined herein) and the Servicer will service the Loans.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as provided herein:
ARTICLE I
DEFINITIONS
SECTION 1.01. General.
(a) For the purpose of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Article include the plural as well as the singular, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and
Section references refer to Sections of this Agreement.
(b) Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Indenture.
(c) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(d) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person include its permitted successors and assignees.
SECTION 1.02. Specific Terms.
All terms defined in any Related Document and not otherwise defined in
this Agreement shall have the meanings given them in such Related Document.
"Addition Notice" means, with respect to the transfer of Subsequent
Loans to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit E, which shall be given not later than
five Business Days prior to the related Subsequent Transfer
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Date, of the Seller's designation of Subsequent Loans, as applicable, to be sold
to the Trust and the aggregate Cut-off Date Principal Balance of such Subsequent
Loans.
"Additional Loan" means an Initial Loan that was not included in the
Loans described in the Prospectus Supplement dated November 1, 1999 relating to
the Securities.
"Additional Principal Distribution Amount" means, for any Payment Date,
the lesser of (x) the Amount Available remaining after payment of the amounts
described in clauses (i) through (xv) of Section 6.06(a) and (y) the amount
necessary to reduce the Class A Principal Balance, Class M Principal Balance and
Class B Principal Balance to zero.
"Advance Payment" means, with respect to any Due Period, any payment by
an Obligor that was not due under the related Loan during or before such Due
Period and which payment is not a Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Liquidation Loss Principal Amount" means, as of any Payment
Date, the excess, if any, of (a) the sum of the Note Principal Balance plus the
Certificate Principal Balance as of such Payment Date (before giving effect to
distributions of principal on such Payment Date) over (b) the sum of the Pool
Scheduled Principal Balance as of the preceding Payment Date plus the Pre-Funded
Amount on such Payment Date.
"Agreement" means this Sale and Servicing Agreement as the same may be
amended or supplemented from time to time.
"Amount Available" means, for any Payment Date, an amount equal to:
(a) the sum of
(i) the amount on deposit in the Collection Account
as of the close of business on the last day of the related Due
Period,
(ii) any Advances deposited in the Collection Account
with respect to such Payment Date,
(iii) any amount withdrawn from the Pre-Funding
Account pursuant to Section 6.08(a) and deposited in the
Collection Account, and
(iv) any amounts required to be deposited in the
Collection Account for such Payment Date pursuant to Sections
8.01 or 8.02, minus
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(b) the sum of
(i) the Amount Held for Future Distribution, and
(ii) amounts permitted to be withdrawn by the
Indenture Trustee from the Collection Account pursuant to
clauses (b) - (e), inclusive, of Section 6.03.
"Amount Held for Future Distribution" means, as to any Payment Date,
the total of the amounts held in the Collection Account on the last day of the
related Due Period on account of Advance Payments in respect of such Due Period.
"Assignment" means the Assignment from the Seller to the Trust in
substantially the form of Exhibit A, whereby the Seller assigns the Loans to the
Trust.
"Average Sixty-Day Delinquency Ratio" means the arithmetic average of
the Sixty-Day Delinquency Ratios for such Payment Date and for the two
immediately preceding Payment Dates.
"Backup Servicer" means the Indenture Trustee, which shall initially
serve as Backup Servicer hereunder in the event of the termination of the
Servicer, subject to the right of the Indenture Trustee to assign such duties to
another party pursuant to Section 7.03.
"Business Day" means any day other than a Saturday, Sunday, legal
holiday or other day on which commercial banking institutions in Minneapolis,
Minnesota, New York, New York, Wilmington, Delaware or any other location of any
successor Servicer, successor Owner Trustee or successor Indenture Trustee are
authorized or obligated by law, executive order or governmental decree to be
closed.
"Certificates" means the Class B-1, Class B-2 and Class C Certificates
issued under the Trust Agreement.
"Certificate Distribution Account" means the account established and
maintained pursuant to Section 6.01(c).
"Certificateholder" means the person in whose name a Certificate is
registered on the Certificate Register.
"Certificate Majority" means, as to each Class of Certificates, Holders
of Certificates representing a majority of the Principal Balance of such Class.
"Certificate Pool Factor" means, with respect to any Payment Date and
the Class B-1 or Class B-2 Certificates, an eight-digit decimal figure equal to
the outstanding principal balance of such Class of Certificates as of such
Payment Date (after giving effect to all distributions on such date) divided by
the Original Principal Balance of such Class of Certificates.
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"Certificate Principal Balance" means, as of any Payment Date, the sum
of the Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class A, Class M, Class B or Class C" means the Class A Notes, Class M
Notes, Class B Certificates or the Class C Certificate, as the case may be.
"Class A Formula Interest Distribution Amount" means, as to any Payment
Date, the sum of the Class A Interest Amount and the Unpaid Class A Interest
Shortfall, if any.
"Class A Formula Principal Distribution Amount" means, as to any
Payment Date, the lesser of (a) the Class A Percentage of the Formula Principal
Distribution Amount and (b) the Class A Principal Balance.
"Class A Interest Amount" means, as to any Payment Date, the sum of the
Class A-1 Interest Amount, the Class A-2 Interest Amount, the Class A-3 Interest
Amount, the Class A-4 Interest Amount, the Class A-5 Interest Amount and the
Class A-6 Interest Amount.
"Class A Percentage" means, as to any Payment Date, a fraction,
expressed as a percentage, the numerator of which is the Class A Principal
Balance and the denominator of which is the sum of (a) the Class A Principal
Balance, (b) if the Class M-1 Distribution Test is satisfied on such Payment
Date, the Class M-1 Adjusted Principal Balance, otherwise zero, (c) if the Class
M-2 Distribution Test is satisfied on such Payment Date, the Class M-2 Adjusted
Principal Balance, otherwise zero, (d) if the Class B-1 Distribution Test is
satisfied on such Payment Date, the Class B-1 Adjusted Principal Balance,
otherwise zero and (e) if the Class B-2 Distribution Test is satisfied on such
Payment Date, the Class B-2 Adjusted Principal Balance, otherwise zero.
"Class A Principal Balance" means, as to any Payment Date, the sum of
the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3
Principal Balance, the Class A-4 Principal Balance, the Class A-5 Principal
Balance and the Class A-6 Principal Balance.
"Class A Principal Deficiency Amount" means, as to any Payment Date,
the amount, if any, by which the sum of the Pool Scheduled Principal Balance
plus the Pre-Funded Amount on such Payment Date is less than the Class A
Principal Balance.
"Class A Principal Distribution Amount" means (1) as to any Payment
Date on which there is no Class A Principal Deficiency Amount, the lesser of (a)
the Amount Available remaining after distribution of amounts described in
Sections 6.06(a)(i) through (v) and (b) the Class A Formula Principal
Distribution Amount, and (2) as to any Payment Date on which there is a Class A
Principal Deficiency Amount on such Payment Date, the lesser of (x) the Amount
Available remaining after distribution of amounts described in Section
6.06(a)(i) through (v) and (y) the Class A Principal Balance on such Payment
Date.
"Class A-1 Interest Amount" means, with respect to any Payment Date, an
amount equal to one month's interest (or, with respect to the first Payment
Date, interest from and including the
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Closing Date to but excluding the first Payment Date) at the Class A-1 Interest
Rate on the Class A-1 Principal Balance for such Payment Date.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class A-1 Notes on such Payment Date pursuant to Section 8.02(c)(1) of the
Indenture is less than the sum of the Class A-1 Interest Amount and the Unpaid
Class A-1 Interest Shortfall for such Payment Date.
"Class A-1 Interest Rate" means a per annum rate of interest equal to
6.57%, computed on the basis of a year of 360 days and twelve 30-day months.
"Class A-1 Notes" means the Class A-1 Notes issued by the Trust
pursuant to the Indenture.
"Class A-1 Principal Balance" means, as to any Payment Date, the
Original Class A-1 Principal Balance less all amounts distributed to Holders of
Class A-1 Notes on prior Payment Dates on account of principal.
"Class A-2 Interest Amount" means, with respect to any Payment Date,
one month's interest (or, with respect to the first Payment Date, interest from
and including the Closing Date to but excluding the first Payment Date) at the
Class A-2 Interest Rate on the Class A-2 Principal Balance for such Payment
Date.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class A-2 Notes on such Payment Date pursuant to Section 8.02(c)(1) of the
Indenture is less than the sum of the Class A-2 Interest Amount for such Payment
Date and the Unpaid Class A-2 Interest Shortfall for such Payment Date.
"Class A-2 Interest Rate" means a per annum rate of interest equal to
7.14%, computed on the basis of a year of 360 days and twelve 30-day months.
"Class A-2 Notes" means the Class A-2 Notes issued by the Trust
pursuant to the Indenture.
"Class A-2 Principal Balance" means, as to any Payment Date the
Original Class A-2 Principal Balance less all amounts distributed to Holders of
Class A-2 Notes on prior Payment Dates on account of principal.
"Class A-3 Interest Amount" means, with respect to any Payment Date, an
amount equal to one month's interest (or, with respect to the first Payment
Date, interest from and including the Closing Date to but excluding the first
Payment Date) at the Class A-3 Interest Rate on the Class A-3 Principal Balance
for such Payment Date.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class A-3 Notes on such
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Payment Date pursuant to Section 8.02(c)(1) of the Indenture is less than the
sum of the Class A-3 Interest Amount and the Unpaid Class A-3 Interest Shortfall
for such Payment Date.
"Class A-3 Interest Rate" means a per annum rate of interest equal to
7.36%, computed on the basis of a year of 360 days and twelve 30-day months.
"Class A-3 Notes" means the Class A-3 Notes issued by the Trust
pursuant to the Indenture.
"Class A-3 Principal Balance" means, as to any Payment Date, the
Original Class A-3 Principal Balance less all amounts distributed to Holders of
Class A-3 Notes on prior Payment Dates on account of principal.
"Class A-4 Interest Amount" means, with respect to any Payment Date,
one month's interest (or, with respect to the first Payment Date, interest from
and including the Closing Date to but excluding the first Payment Date) at the
Class A-4 Interest Rate on the Class A-4 Principal Balance for such Payment
Date.
"Class A-4 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class A-4 Notes on such Payment Date pursuant to Section 8.02(c)(1) of the
Indenture is less than the sum of the Class A-4 Interest Amount for such Payment
Date and the Unpaid Class A-4 Interest Shortfall for such Payment Date.
"Class A-4 Interest Rate" means a per annum rate of interest equal to
7.55%, computed on the basis of a year of 360 days and twelve 30-day months.
"Class A-4 Notes" means the Class A-4 Notes issued by the Trust
pursuant to the Indenture.
"Class A-4 Principal Balance" means, as to any Payment Date the
Original Class A-4 Principal Balance less all amounts distributed to Holders of
Class A-4 Notes on prior Payment Dates on account of principal.
"Class A-5 Interest Amount" means, with respect to any Payment Date,
one month's interest (or, with respect to the first Payment Date, interest from
and including the Closing Date to but excluding the first Payment Date) at the
Class A-5 Interest Rate on the Class A-5 Principal Balance for such Payment
Date.
"Class A-5 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class A-5 Notes on such Payment Date pursuant to Section 8.02(c)(1) of the
Indenture is less than the sum of the Class A-5 Interest Amount for such Payment
Date and the Unpaid Class A-5 Interest Shortfall for such Payment date.
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"Class A-5 Interest Rate" means a per annum rate of interest equal to
8.08%, computed on the basis of a year of 360 days and twelve 30-day months.
"Class A-5 Notes" means the Class A-5 Notes issued by the Trust
pursuant to the Indenture.
"Class A-5 Principal Balance" means, as to any Payment Date the
Original Class A-5 Principal Balance less all amounts distributed to Holders of
Class A-5 Notes on prior Payment Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class A-6 Interest Amount" means, with respect to any Payment Date,
one month's interest (or, with respect to the first Payment Date, interest from
and including the Closing Date to but excluding the first Payment Date) at the
Class A-6 Interest Rate on the Class A-6 Principal Balance for such Payment
Date.
"Class A-6 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class A-6 Notes on such Payment Date pursuant to Section 8.02(c)(1) of the
Indenture is less than the sum of the Class A-6 Interest Amount for such Payment
Date and the Unpaid Class A-6 Interest Shortfall for such Payment Date.
"Class A-6 Interest Rate" means a per annum rate of interest equal to
8.16%, computed on the basis of a year of 360 days and twelve 30-day months.
"Class A-6 Notes" means the Class A-6 Notes issued by the Trust
pursuant to the Indenture.
"Class A-6 Principal Balance" means, as to any Payment Date the
Original Class A-6 Principal Balance less all amounts distributed to Holders of
Class A-6 Notes on prior Payment Dates on account of principal.
"Class B Principal Balance" means, as to any Payment Date, the sum of
the Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B-1 Adjusted Principal Balance" means, as of any Payment Date,
the Class B-1 Principal Balance as of that Payment Date minus the Class B-1
Liquidation Loss Principal Amount (if any) as of the prior Payment Date.
"Class B-1 Distribution Test," to be considered "satisfied" for any
Payment Date, requires that (i) such Payment Date occurs in or after December
2003; (ii) the Average Sixty-Day Delinquency Ratio for such Payment Date is less
than or equal to 10% of the Senior Subordination Percentage; (iii) the
Cumulative Realized Losses Test for such Payment Date is satisfied; and (iv) the
fraction, expressed as a percentage, the numerator of which is the sum of the
Class B-1 Adjusted Principal Balance, the Class B-2 Adjusted Principal Balance
and the Over-Collateralization Amount (after giving effect to the distributions
made on the preceding Payment Date) as of such Payment Date and the denominator
of which is the Pool Scheduled
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Principal Balance as of the immediately preceding Payment Date, is equal to or
greater than 28.00%.
"Class B-1 Formula Interest Distribution Amount" means, as to any
Payment Date, the sum of the Class B-1 Interest Amount and the Unpaid Class B-1
Interest Shortfall, if any.
"Class B-1 Formula Liquidation Loss Interest Distribution Amount"
means, as to any Payment Date, the sum of (a) the Class B-1 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall, if any.
"Class B-1 Formula Principal Distribution Amount" means, as to any
Payment Date, the lesser of (a) the Class B-1 Percentage of the Formula
Principal Distribution Amount or (b) the Class B-1 Principal Balance.
"Class B-1 Interest Amount" means, with respect to any Payment Date, an
amount equal to one month's interest (or, with respect to the first Payment
Date, interest from and including the Closing Date to but excluding the first
Payment Date) at the Class B-1 Interest Rate on the Class B-1 Adjusted Principal
Balance for such Payment Date.
"Class B-1 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class B-1 Certificates on such Payment Date pursuant to Section 6.06(a)(v)
is less than the Class B-1 Formula Interest Distribution Amount for such Payment
Date.
"Class B-1 Interest Rate" means 10.48% per annum, computed on the basis
of a year of 360 days consisting of twelve 30-day months.
"Class B-1 Liquidation Loss Interest Amount" means, as to any Payment
Date, an amount equal to one month's interest at the Class B-1 Interest Rate on
the Class B-1 Liquidation Loss Principal Amount (if any) for the immediately
preceding Payment Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Payment Date, the amount, if any, by which the Class B-1 Formula Liquidation
Loss Interest Distribution Amount exceeds any amount distributed on the Class
B-1 Certificates on such Payment Date pursuant to Section 6.06(a)(x)(C).
"Class B-1 Liquidation Loss Principal Amount" means, as to any Payment
Date, the lesser of (a) the Class B-1 Adjusted Principal Balance and (b) the
excess, if any, of the Aggregate Liquidation Loss Principal Amount over the
Class B-2 Liquidation Loss Principal Amount.
"Class B-1 Certificates" means the Class B-1 Certificates issued by the
Trust pursuant to the Trust Agreement.
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"Class B-1 Percentage" means:
(i) zero, if the Class A Principal Balance, the Class M-1
Principal Balance and the Class M-2 Principal Balance have not yet been
reduced to zero and the Class B-1 Distribution Test is not satisfied or
(ii) a fraction, expressed as a percentage, the numerator of
which is the Class B-1 Adjusted Principal Balance and the denominator
of which is the sum of (a) the Class A Principal Balance, (b) the Class
M-1 Adjusted Principal Balance, (c) the Class M-2 Adjusted Principal
Balance, (d) the Class B-1 Adjusted Principal Balance and (e) if the
Class B-2 Distribution Test is satisfied on such Payment Date, the
Class B-2 Adjusted Principal Balance, otherwise zero.
"Class B-1 Principal Balance" means, as to any Payment Date, the
Original Class B-1 Principal Balance less all amounts distributed to Holders of
Class B-1 Certificates on prior Payment Dates on account of principal.
"Class B-2 Adjusted Principal Balance" means, as of any Payment Date,
the Class B-2 Principal Balance as of that Payment Date minus any Class B-2
Liquidation Loss Principal Amount as of the prior Payment Date that was not paid
by the Guarantor pursuant to the Limited Guaranty.
"Class B-2 Distribution Amount" means, as to any Payment Date, the sum
of the amounts paid to Class B-2 Certificateholders on such Payment Date
pursuant to Section 6.06(a)(xii) and (xiii).
"Class B-2 Distribution Test," to be considered "satisfied" for any
Payment Date, requires that (i) such Payment Date occurs in or after December
2003; (ii) the Average Sixty-Day Delinquency Ratio for such Payment Date is less
than or equal to 10% of the Senior Subordination Percentage; (iii) the
Cumulative Realized Losses Test for such Payment Date is satisfied; and (iv) the
fraction, expressed as a percentage, the numerator of which is the sum of the
Class B-2 Adjusted Principal Balance and the Over-Collateralization Amount as of
such Payment Date and the denominator of which is the Pool Scheduled Principal
Balance as of the immediately preceding Payment Date, is equal to or greater
than 17.50%.
"Class B-2 Formula Interest Distribution Amount" means, as to any
Payment Date, the sum of the Class B-2 Interest Amount and the Unpaid Class B-2
Interest Shortfall, if any.
"Class B-2 Formula Distribution Amount" means, as to any Payment Date,
the sum of (a) the Class X-0 Xxxxxxx Xxxxxxxx Xxxxxxxxxxxx Xxxxxx, (x) the Class
B-2 Formula Principal Distribution Amount, (c) the Class B-2 Liquidation Loss
Interest Amount, if any, and (d) the Class B-2 Liquidation Loss Principal
Amount, if any (but in no event more than is necessary to reduce the Class B-2
Principal Balance to zero).
1-9
"Class B-2 Formula Liquidation Loss Interest Distribution Amount"
means, as to any Payment Date, the sum of (i) the Class B-2 Liquidation Loss
Interest Amount, if any, and (ii) the Unpaid Class B-2 Liquidation Loss Interest
Shortfall, if any.
"Class B-2 Formula Principal Distribution Amount" means, as to any
Payment Date, the lesser of (a) the Class B-2 Percentage of the Formula
Principal Distribution Amount, and (b) the Class B-2 Principal Balance.
"Class B-2 Interest Amount" means, as to any Payment Date, an amount
equal to one month's interest (or, with respect to the first Payment Date,
interest from and including the Closing Date to but excluding the first Payment
Date) at the Class B-2 Interest Rate on the Class B-2 Adjusted Principal Balance
for such Payment Date.
"Class B-2 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class B-2 Certificates on such Payment Date pursuant to Section
6.06(a)(xii), plus any Guaranty Payment on such Payment Date in respect of
interest, is less than the Class B-2 Formula Interest Distribution Amount for
such Payment Date.
"Class B-2 Interest Rate" means 10.96% per annum, computed on the basis
of a 360-day year consisting of twelve 30-day months.
"Class B-2 Liquidation Loss Interest Amount" means, as to any Payment
Date, an amount equal to one month's interest at the Class B-2 Interest Rate on
the Class B-2 Liquidation Loss Principal Amount (if any) for the immediately
preceding Payment Date.
"Class B-2 Liquidation Loss Interest Shortfall" means, as to any
Payment Date, the amount, if any, by which the Class B-2 Formula Liquidation
Loss Interest Distribution Amount exceeds any amount distributed on the Class
B-2 Certificates on such Payment Date pursuant to Section 6.06(a)(xii)(C).
"Class B-2 Liquidation Loss Principal Amount" means, as to any Payment
Date, the lesser of (a) the Class B-2 Adjusted Principal Balance and (b) the
Aggregate Liquidation Loss Principal Amount.
"Class B-2 Certificates" means the Class B-2 Certificates issued by the
Trust pursuant to the Trust Agreement.
"Class B-2 Percentage" means:
(i) zero, if the Class A Principal Balance, the Class M-1
Principal Balance, the Class M-2 Principal Balance and the Class B-1
Principal Balance have not yet been reduced to zero and the Class B-2
Distribution Test is not satisfied or
(ii) a fraction, expressed as a percentage, the numerator of
which is the Class B-2 Adjusted Principal Balance and the denominator
of which is the sum of (a) the Class
1-10
A Principal Balance, (b) the Class M-1 Adjusted Principal Balance, (c)
the Class M-2 Adjusted Principal Balance, (d) the Class B-1 Adjusted
Principal Balance and (e) the Class B-2 Adjusted Principal Balance.
"Class B-2 Principal Balance" means, as to any Payment Date, the
Original Class B-2 Principal Balance less all amounts distributed to Holders of
Class B-2 Certificates on prior Payment Dates on account of principal.
"Class C Certificate Distribution Amount" means the amount specified in
Section 6.06(a)(xviii).
"Class M-1 Adjusted Principal Balance" means, as of any Payment Date,
the Class M-1 Principal Balance as of that Payment Date minus the Class M-1
Liquidation Loss Principal Amount (if any) as of the prior Payment Date.
"Class M-1 Distribution Test," to be considered "satisfied" for any
Payment Date, requires that (i) such Payment Date occurs in or after December
2003; (ii) the Average Sixty-Day Delinquency Ratio for such Payment Date is less
than or equal to 10% of the Senior Subordination Percentage; (iii) the
Cumulative Realized Losses Test for such Payment Date is satisfied; and (iv) the
fraction, expressed as a percentage, the numerator of which is the sum of the
Class M-1 Adjusted Principal Balance, the Class M-2 Adjusted Principal Balance,
the Class B-1 Adjusted Principal Balance, the Class B-2 Adjusted Principal
Balance and the Over-Collateralization Amount (after giving effect to the
distributions made on the preceding Payment Date) as of such Payment Date and
the denominator of which is the Pool Scheduled Principal Balance as of the
immediately preceding Payment Date, is equal to or greater than 57.00%.
"Class M-1 Formula Interest Distribution Amount" means, as to any
Payment Date, the sum of the Class M-1 Interest Amount and the Unpaid Class M-1
Interest Shortfall, if any.
"Class M-1 Formula Liquidation Loss Interest Distribution Amount"
means, as to any Payment Date, the sum of (a) the Class M-1 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall, if any.
"Class M-1 Formula Principal Distribution Amount" means, as to any
Payment Date, the lesser of (a) the Class M-1 Percentage of the Formula
Principal Distribution Amount, and (b) the Class M-1 Principal Balance.
"Class M-1 Interest Amount" means, with respect to any Payment Date, an
amount equal to one month's interest (or, with respect to the first Payment
Date, interest from and including the Closing Date to but excluding the first
Payment Date) at the Class M-1 Interest Rate on the Class M-1 Adjusted Principal
Balance for such Payment Date.
"Class M-1 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class M-1 Notes on such Payment Date pursuant to Section 6.06(a)(iii) is
less than the Class M-1 Formula Interest Distribution Amount for such Payment
Date.
1-11
"Class M-1 Interest Rate" means a per annum rate of interest equal to
8.88%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class M-1 Liquidation Loss Interest Amount" means, as to any Payment
Date, an amount equal to one month's interest at the Class M-1 Interest Rate on
the Class M-1 Liquidation Loss Principal Amount (if any) for the immediately
preceding Payment Date.
"Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Payment Date, the amount, if any, by which the Class M-1 Formula Liquidation
Loss Interest Distribution Amount exceeds any amount distributed to Class M-1
Noteholders on such Payment Date pursuant to Section 6.06(a)(x)(A).
"Class M-1 Liquidation Loss Principal Amount" means, as to any Payment
Date, the lesser of (a) the Class M-1 Adjusted Principal Balance and (b) the
excess, if any, of the Aggregate Liquidation Loss Principal Amount over the
aggregate of the Class M-2 Liquidation Loss Principal Amount, the Class B-1
Liquidation Loss Principal Amount and the Class B-2 Liquidation Loss Principal
Amount.
"Class M-1 Notes" means the Class M-1 Notes issued by the Trust
pursuant to the Indenture.
"Class M-1 Percentage" means:
(i) zero, as to any Payment Date on which the Class A
Principal Balance has not yet been reduced to zero and on which the
Class M-1 Distribution Test is not satisfied or
(ii) a fraction, expressed as a percentage, the numerator of
which is the Class M-1 Adjusted Principal Balance and the denominator
of which is the sum of (a) the Class A Principal Balance, (b) the Class
M-1 Adjusted Principal Balance, (c) if the Class M-2 Distribution Test
is satisfied on such Payment Date, the Class M-2 Adjusted Principal
Balance, otherwise zero, (d) if the Class B-1 Distribution Test is
satisfied on such Payment Date, the Class B-1 Adjusted Principal
Balance, otherwise zero and (e) if the Class B-2 Distribution Test is
satisfied on such Payment Date, the Class B-2 Adjusted Principal
Balance, otherwise zero.
"Class M-1 Principal Balance" means, as to any Payment Date, the
Original Class M-1 Principal Balance less all amounts distributed to Holders of
Class M-1 Notes on prior Payment Dates on account of principal.
"Class M-2 Adjusted Principal Balance" means, as of any Payment Date,
the Class M-2 Principal Balance as of that Payment Date minus the Class M-2
Liquidation Loss Principal Amount (if any) as of the prior Payment Date.
"Class M-2 Distribution Test," to be considered "satisfied" for any
Payment Date, requires that (i) such Payment Date occurs in or after December
2003; (ii) the Average Sixty-Day
1-12
Delinquency Ratio for such Payment Date is less than or equal to 10% of the
Senior Subordination Percentage; (iii) the Cumulative Realized Losses Test for
such Payment Date is satisfied; and (iv) the fraction, expressed as a
percentage, the numerator of which is the sum of the Class M-2 Adjusted
Principal Balance, the Class B-1 Adjusted Principal Balance, the Class B-2
Adjusted Principal Balance as of such Payment Date, and the
Over-Collateralization Amount (after giving effect to the distributions made on
the preceding Payment Date) and the denominator of which is the Pool Scheduled
Principal Balance as of the immediately preceding Payment Date, is equal to or
greater than 41.00%.
"Class M-2 Formula Interest Distribution Amount" means, as to any
Payment Date, the sum of the Class M-2 Formula Distribution Amount and the
Unpaid Class M-2 Interest Shortfall, if any.
"Class M-2 Formula Liquidation Loss Interest Distribution Amount"
means, as to any Payment Date, the sum of (a) the Class M-2 Liquidation Loss
Interest Amount, if any, and (b) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall, if any.
"Class M-2 Formula Principal Distribution Amount" means, as to any
Payment Date, the lesser of (a) the Class M-2 Percentage of the Formula
Principal Distribution Amount and (b) the Class M-2 Principal Balance.
"Class M-2 Interest Amount" means, with respect to any Payment Date, an
amount equal to one month's interest (or, with respect to the first Payment
Date, interest from and including the Closing Date to but excluding the first
Payment Date) at the Class M-2 Interest Rate on the Class M-2 Adjusted Principal
Balance.
"Class M-2 Interest Carryover Shortfall" means, with respect to any
Payment Date, the amount, if any, by which the amount distributed to Holders of
the Class M-2 Notes on such Payment Date pursuant to Section 6.06(a)(x)(B) is
less than the Class M-2 Formula Interest Distribution Amount for such Payment
Date.
"Class M-2 Interest Rate" means a per annum rate of interest equal to
9.52%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class M-2 Liquidation Loss Interest Amount" means, as to any Payment
Date, an amount equal to one month's interest (or, as to the first Payment Date,
interest from and including the Closing Date to but excluding the first Payment
Date) at the Class M-2 Interest Rate on the Class M-2 Liquidation Loss Principal
Amount (if any) for the immediately preceding Payment Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Payment Date, the amount, if any, by which the Class M-2 Formula Liquidation
Loss Interest Distribution Amount exceeds any amount distributed to Class M-2
Noteholders on such Payment Date pursuant to Section 6.06(a)(x).
1-13
"Class M-2 Liquidation Loss Principal Amount" means, as to any Payment
Date, the lesser of (a) the Class M-2 Adjusted Principal Balance and (b) the
excess, if any, of the Aggregate Liquidation Loss Principal Amount over the
aggregate of the Class B-1 Liquidation Loss Principal Amount and the Class B-2
Liquidation Loss Principal Amount.
"Class M-2 Notes" means the Class M-2 Notes issued by the Trust
pursuant to the Indenture.
"Class M-2 Percentage" means:
(i) zero, as to any Payment Date on which the Class A
Principal Balance and the Class M-1 Principal Balance have not yet been
reduced to zero and on which the Class M-2 Distribution Test is not
satisfied, or
(ii) a fraction, expressed as a percentage, the numerator of
which is the Class M-2 Adjusted Principal Balance and the denominator
of which is the sum of (a) the Class A Principal Balance, (b) the Class
M-1 Adjusted Principal Balance, (c) the Class M-2 Adjusted Principal
Balance, (d) if the Class B-1 Distribution Test is satisfied on such
Payment Date, the Class B-1 Adjusted Principal Balance, otherwise zero
and (e) if the Class B-2 Distribution Test is satisfied on such Payment
Date, the Class B-2 Adjusted Principal Balance, otherwise zero.
"Class M-2 Principal Balance" means, as to any Payment Date, the
Original Class M-2 Principal Balance less all amounts distributed to Holders of
Class M-2 Notes on prior Payment Dates on account of principal.
"Class Percentage Interest" means, as to any Note or Certificate (other
than the Class C Certificate), the percentage interest evidenced thereby in
distributions made on the related Class, such percentage interest being equal to
the percentage (carried to eight places) obtained from dividing the denomination
of such Note or Certificate by the aggregate denomination of all Notes or
Certificates of the related Class (which equals the Original Class A-1 Principal
Balance in the case of a Class A-1 Note, the Original Class A-2 Principal
Balance in the case of a Class A-2 Note, the Original Class A-3 Principal
Balance in the case of a Class A-3 Note, the Original Class A-4 Principal
Balance in the case of a Class A-4 Note, the Original Class A-5 Principal
Balance in the case of a Class A-5 Note, the Original Class A-6 Principal
Balance in the case of a Class A-6 Note, the Original Class M-1 Principal
Balance in the case of a Class M-1 Note, the Original Class M-2 Principal
Balance in the case of a Class M-2 Note, the Original Class B-1 Principal
Balance in the case of a Class B-1 Certificate or the Original Class B-2
Principal Balance in the case of a Class B-2 Certificate). The aggregate Class
Percentage Interest for each Class of Notes or Certificates shall equal 100%.
The Class C Certificate shall be issued as a single Certificate having a Class
Percentage Interest of 100%.
"Class Principal Balance" means, as to any date, the Class A-1
Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal
Balance, the Class A-4 Principal Balance, the Class A-5 Principal Balance, the
Class A-6 Principal Balance, the Class M-1 Principal
1-14
Balance, the Class M-2 Principal Balance, the Class B-1 Principal Balance or the
Class B-2 Principal Balance, as appropriate.
"Closing Date" means November 16, 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" means, with respect to any Loan, (i) the
mortgage, deed of trust or security deed granted by or on behalf of the related
Obligor with respect thereto, including the lien on the related real property,
(ii) all other security interests or liens and property subject thereto from
time to time purporting to secure payment of such Loan, whether pursuant to the
agreement giving rise to such Loan or otherwise, together with all financing
statements signed by the Obligor describing any collateral securing such Loan,
(iii) all rights the Originator may have against the originator of the Loan if
other than the Originator (iv) all rights under hazard insurance, if applicable,
on the property described in the Loan, (v) all rights in any title insurance
policy with respect to a Loan and (vi) all guarantees, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Loan whether pursuant to the agreement giving rise to
such Loan or otherwise, and (vii) all records in respect of such Loan.
"Collection Account" means the account established and maintained
pursuant to Section 6.01.
"Computer Tape" means the computer tape generated by the Originator
which provides information relating to the Loans and which was used by the
Originator in selecting the Loans, and includes the master file and the history
file.
"Corporate Trust Office" means with respect to the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the Closing Date
is located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Corporate Trust Administration; the telecopy
number for the Corporate Trust Office of the Owner Trustee on the date of the
execution of this Agreement is 000-000-0000; with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at U.S. Bank Trust National Association, 000 Xxxx
Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000 Attention: Corporate Trust Department;
the telecopy number for the Corporate Trust Office of the Indenture Trustee on
the date of execution of this Agreement is (000) 000-0000.
"Counsel for the Servicer" means Xxxxxx & Xxxxxxx LLP, or other legal
counsel for the Servicer.
"Cumulative Realized Loss Ratio" means, for any Payment Date, a
fraction, expressed as a percentage, the numerator of which is the Cumulative
Realized Losses for that Payment Date, and the denominator of which is the
Cut-off Date Pool Principal Balance.
1-15
"Cumulative Realized Losses Test," to be considered "satisfied" for any
Payment Date, requires:
(i) if such Payment Date occurs between November 15, 2003 and
November 14, 2004, that the Cumulative Realized Losses as of
such Payment Date are less than or equal to 10% of the Cut-off
Date Pool Principal Balance;
(ii) if such Payment Date occurs between November 15, 2004 and
November 14, 2005, that the Cumulative Realized Losses as of
such Payment Date are less than or equal to 12% of the Cut-off
Date Pool Principal Balance;
(iii) if such Payment Date occurs between November 15, 2005 and
November 14, 2006, that the Cumulative Realized Losses as of
such Payment Date are less than or equal to 14% of the Cut-off
Date Pool Principal Balance; and
(iv) if such Payment Date occurs on or after November 15, 2006,
that the Cumulative Realized Losses as of such Payment Date
are less than or equal to 15% of the Cutoff Date Pool
Principal Balance.
"Current Realized Loss Ratio" means, as to any Payment Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Realized Losses for such Payment Date and each of the eleven immediately
preceding Payment Dates and the denominator of which is the arithmetic average
of the Pool Scheduled Principal Balance of as of the twelfth preceding Payment
Date and the Pool Scheduled Principal Balance of as of such Payment Date.
"Cut-off Date" means with respect to each Initial Loan, August 31, 1999
(or the date of origination, if later), and with respect to each Subsequent
Loan, the applicable Subsequent Cutoff Date.
"Cut-off Date Pool Principal Balance" means the aggregate of the
Cut-off Date Principal Balances of the Loans.
"Cut-off Date Principal Balance" means, as to any Loan, the unpaid
principal balance thereof at the applicable Cut-off Date after giving effect to
all installments of principal due on or prior thereto.
"Defaulted Loan" means a Loan with respect to which the Servicer
commenced foreclosure proceedings, made a sale of such Loan to a third party for
foreclosure or enforcement, or as to which there was a Delinquent Payment 180 or
more days past due.
"Delinquent Payment" means, as to any Loan, with respect to any Due
Period, any payment or portion of a payment of principal or interest that was
originally scheduled to be made during such Due Period under such Loan (after
giving effect to any reduction in the principal amount deemed owed on such Loan
by the Obligor) and was not received or applied during such Due Period, whether
or not any payment extension permitted under Section 5.06(f) has been granted by
the Servicer.
1-16
"Determination Date" means the third Business Day prior to each Payment
Date during the term of this Agreement.
"Due Date" means, as to any Loan, the date of the month on which the
scheduled monthly payment for such Loan is due.
"Due Period" means a calendar month during the term of this Agreement;
with respect to any Payment Date, the "related Due Period" means the calendar
month immediately preceding the month in which the Due Period occurs (except
that the "related Due Period" for the Payment Date in December 1999 shall mean
the period from and including September 1, 1999 to and including November 30,
1999)
"Electronic Ledger" means the electronic master record of installment
sale contracts, home equity loans and promissory notes of the Originator.
"Eligible Account" means, at any time, an account which is any of the
following: (i) an account maintained with an Eligible Institution; (ii) an
account or accounts the deposits in which are fully insured by either the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC; (iii) a
trust account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company subject to regulations regarding fiduciary funds on
deposit similar to federal regulations with trust powers and acting in its
fiduciary capacity for the benefit of the Indenture Trustee, which depository
institution or trust company shall have capital and surplus (or, if such
depository institution or trust company is a subsidiary of a bank holding
company system, the capital and surplus of the bank holding company) of not less
than $50,000,000 and the securities of such depository institution (or, if such
depository institution is a subsidiary of a bank holding company system and such
depository institution's securities are not rated, the securities of the bank
holding company) shall have a credit rating from Standard & Poor's (if rated by
Standard & Poor's) and Xxxxx'x (if rated by Xxxxx'x) in one of its generic
credit rating categories which signifies investment grade; or (iv) an account
that will not cause either of the Rating Agencies to downgrade or withdraw their
then-current ratings assigned to the Notes and Class B Certificates, as
confirmed in writing by the Rating Agencies.
"Eligible Institution" means any depository institution (which may be
the Owner Trustee, the Indenture Trustee or an Affiliate of either) organized
under the laws of the United States or any State, the deposits of which are
insured to the full extent permitted by law by the Bank Insurance Fund
(currently administered by the Federal Deposit Insurance Corporation), which is
subject to supervision and examination by federal or state authorities and whose
short-term deposits have been rated A-1+ by Standard & Poor's and P-1 by Xxxxx'x
if the deposits are to be held in the account for less than 30 days, or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by Standard & Poor's and Xxxxx'x if the deposits are to be held in
the account for 30 days or more, or who shall otherwise be acceptable to the
Rating Agencies.
1-17
"Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association having the
highest credit rating then available from Xxxxx'x and Standard &
Poor's, or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and
credit of the United States of America and which are noncallable;
(ii) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or any
Affiliate of the Indenture Trustee, acting in its commercial capacity)
incorporated under the laws of the United States of America or any
State thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, the commercial
paper or other short-term deposits of such depository institution or
trust company (or, in the case of a depository institution which is the
principal subsidiary of a holding company, the commercial paper or
other short-term debt obligations of such holding company) are rated at
least A-1+ by Standard & Poor's and at least P-1 by Xxxxx'x;
(iii) shares of an investment company registered under the
Investment Company Act of 1940, whose shares are registered under the
Securities Act of 1933 and have the highest credit rating then
available from Xxxxx'x and Standard & Poor's and whose only investments
are in securities described in clauses (i) and (ii) above if the
Indenture Trustee has taken possession of any certificate evidencing
the shares or, if uncertificated, there is an appropriate book entry
notation showing the Indenture Trustee as the owner of the shares;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii) above if
the Indenture Trustee has taken possession of any certificate
evidencing the securities or, if uncertificated, there is an
appropriate book entry notation showing the Indenture Trustee as the
owner of the securities;
(v) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any State thereof which have a credit rating of at least AAA
by Standard & Poor's and at least Aaa from Moody's at the time of such
investment; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the corpus of
the Trust to exceed 10% of amounts held in the Collection Account; and
1-18
(vi) commercial paper having a rating of at least A-1+ from
Standard & Poor's and at least P-1 by Moody's at the time of such
investment or pledge as a security.
Notwithstanding the foregoing, securities that represent the right to receive
payments only of interest due on underlying obligations shall not be included as
Eligible Investments, whether or not such securities otherwise fall within (i)
through (vi) above.
Each of the Indenture Trustee and the Owner Trustee may trade with
itself or an Affiliate in the purchase or sale of such Eligible Investments.
"Eligible Servicer" means Conseco Finance Corp. or a Person designated
as an approved seller-servicer by Xxxxxx Xxx or Xxxxxxx Mac and otherwise
qualified to act as servicer of the Loans under applicable Federal and State
laws and regulations, and which services not less than an aggregate of
$100,000,000 in outstanding principal amount of home improvement contracts and
promissory notes, manufactured housing conditional sales contracts and
installment loan agreements and home equity loans.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Loans comprising a
portion of the corpus of the Trust.
"Federal Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
"Fidelity Bond" means the fidelity bond maintained by the Servicer or
any similar replacement bond, meeting the requirements of Section 5.09, as such
bond relates to Loans comprising a portion of the corpus of the Trust.
"Final Scheduled Payment Date" has the meaning given in the Indenture
with respect to the Notes, and the meaning given in the Trust Agreement with
respect to the Class B Certificates.
"Formula Principal Distribution Amount" means, for any Payment Date,
the sum of:
(a) all scheduled payments of principal due on each
outstanding Loan during the prior Due Period as specified in the
amortization schedule at the time applicable thereto (after adjustments
for previous Partial Principal Prepayments and after any adjustment to
such amortization schedule by reason of any bankruptcy of an Obligor or
similar proceeding or any moratorium or similar waiver or grace
period); plus
(b) all Partial Principal Prepayments applied and all
Principal Prepayments in Full received during the prior Due Period with
respect to the Loans; plus
(c) the aggregate Scheduled Principal Balance of all Loans
that became Liquidated Loans during the prior Due Period plus the
amount of any reduction in
1-19
principal balance of any Loan during the prior Due Period pursuant to
bankruptcy proceedings involving the related Obligor; plus
(d) the aggregate Scheduled Principal Balance of all Loans
repurchased, and all amounts deposited in lieu of the repurchase of any
Loan, during the prior Due Period pursuant to Section 3.05(a); plus
(e) any amount described in clauses (a) through (d) above that
was not previously distributed because of an insufficient amount of
funds available in the Collection Account; plus
(f) on the Post-Funding Payment Date, any amount withdrawn
from the Pre-Funding Account and deposited in the Collection Account
pursuant to Section 6.08(a).
"Guarantor" means Conseco Finance Corp.
"Guaranty Payment" means, as of any Payment Date, the amount, if any,
by which (A) the Class B-2 Formula Distribution Amount on such Payment Date
exceeds (B) the remainder of (x) the Amount Available as of that Payment Date,
minus (y) the amounts to be distributed from the Collection Account on that
Payment Date pursuant to Section 6.06(a)(i) through (xi).
"Holder" means the person in whose name a Note is registered on the
Note Register, or in whose name a Certificate is registered on the Certificate
Register.
"Home Equity Loan" means each closed-end home equity loan described in
the List of Loans and to be assigned and conveyed by the Seller to the Trust,
and includes, without limitation, any and all related mortgages, deeds of trust
and security deeds and any and all rights to receive payments which are due
pursuant thereto after the Cut-off Date.
"Home Improvement Loan" means each retail installment sale contract and
promissory note described in the List of Loans and to be assigned and conveyed
by the Seller to the Trust, and includes, without limitation, any and all
related mortgages, deeds of trust and security deeds and any and all rights to
receive payments which are due pursuant thereto after the Cut-off Date.
"Indenture" means the Indenture, dated as of September 1, 1999, between
the Trust and U.S. Bank Trust National Association, as Indenture Trustee, as the
same may be amended and supplemented from time to time.
"Indenture Trustee" means the Person acting as Trustee under the
Indenture, its successors in interest and any successor Trustee under the
Indenture.
"Independent" means, when used with respect to any specified Person,
Xxxxxx & Xxxxxxx LLP, or any Person who (i) is in fact independent of the Seller
and the Servicer, (ii) does not have any direct financial interest or any
material indirect financial interest in the Seller or the Servicer or in an
Affiliate of either and (iii) is not connected with the Seller or the Servicer
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar
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functions. Whenever it is provided herein that any Independent Person's opinion
or certificate shall be furnished to the Owner Trustee or the Indenture Trustee,
such opinion or certificate shall state that the signatory has read this
definition and is Independent within the meaning set forth herein.
"Initial Loan" means a Loan identified on the List of Loans attached
hereto as of the Closing Date.
"Limited Guaranty" means the obligation of the Guarantor to make
Guaranty Payments pursuant to Section 6.05.
"Liquidated Loan" means with respect to any Due Period, either
(i) a Defaulted Loan as to which the Servicer has received
from the Obligor, or a third party purchaser of the Loan, all amounts
which the Servicer reasonably and in good faith expects to recover from
or on account of such Loan, or
(ii) a Loan as to which there was a Delinquent Payment 180 or
more days past due (without regard to any extension given by the
Servicer under Section 5.06(f));
provided, however, that any Loan which the Originator is obligated to repurchase
pursuant to Section 3.05, and did so repurchase shall be deemed not to be a
Liquidated Loan; and provided, further, that with respect to Due Periods
beginning on or after December 2027, a Liquidated Loan also means any Loan as to
which the Servicer has commenced foreclosure proceedings or made a sale of the
Loan to a third party for foreclosure or enforcement.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any Defaulted Loan, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.
"Liquidation Proceeds" means cash (including insurance proceeds)
received in connection with the liquidation of Defaulted Loans, whether through
repossession, foreclosure sale or otherwise.
"List of Loans" means the list identifying each Loan constituting part
of the corpus of the Trust, which list sets forth as to each Loan (i) the
Cut-off Date Principal Balance, (ii) the amount of monthly payments due from the
Obligor, (iii) the Loan Interest Rate and (iv) the maturity date. The List of
Loans as of the Closing Date is attached to the Assignment, and shall be revised
on each Subsequent Transfer Date to add the Subsequent Loans then being
transferred to the Trust.
"Loan File" means, as to each Loan, (a) the original copy of the Loan
which is comprised of the related original contract and/or original promissory
note, endorsed to the Indenture Trustee or in blank, (b) the original or a copy
of the mortgage, deed of trust or security deed or similar evidence of a lien on
the related improved property and evidence of due recording of such
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mortgage, deed of trust or security deed, if available, (c) if such Loan was
originated by a contractor or lender other than the Originator, the original or
a copy of an assignment of the mortgage, deed of trust or security deed by the
contractor or lender to the Originator, (d) an assignment of the mortgage, deed
of trust or security deed in blank, and (e) originals of any extension,
modification or waiver agreement(s).
"Loan Interest Rate" means, with respect to any Loan, the annual rate
of interest specified in that Loan.
"Loans" means, collectively, the Home Improvement Loans and the Home
Equity Loans.
"MN UCC" means the Uniform Commercial Code as in effect in the State of
Minnesota.
"Monthly Report" has the meaning assigned in Section 5.11.
"Monthly Servicing Fee" means, as of any Payment Date (a) on which
Conseco Finance Corp. or an Affiliate is acting as Servicer, one-twelfth of the
product of 0.75% and the Pool Scheduled Principal Balance and (b) on which
Conseco Finance Corp. or an Affiliate is not acting as Servicer, any amount
agreed to by the Indenture Trustee and the successor Servicer; provided that
only that portion of the Monthly Servicing Fee that does not exceed one-twelfth
of the product of 0.75% and the Pool Scheduled Principal Balance for the
immediately preceding Payment Date shall be paid pursuant to Section 6.06(a)(i)
and any balance shall be paid pursuant to Section 6.06(a)(xiv).
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto; provided that, if Moody's no longer has a rating outstanding on any
Class of Securities, then references herein to "Moody's" shall be deemed to
refer to the NRSRO then rating any Class of the Securities (or, if more than one
such NRSRO is then rating any Class of the Securities, to such NRSRO as may be
designated by the Servicer), and references herein to ratings by or requirements
of Moody's shall be deemed to have the equivalent meanings with respect to
ratings by or requirements of such NRSRO.
"Net Liquidation Loss" means, as to a Liquidated Loan, the difference
between (a) the Repurchase Price of such Loan, and (b) the Net Liquidation
Proceeds with respect to such Liquidated Loan, where such difference is a
positive number.
"Net Liquidation Proceeds" means, as to a Liquidated Loan, the proceeds
received, or, for Loans which become Liquidated Loans pursuant to the last
proviso in the definition of "Liquidated Loan," the estimated proceeds to be
received, as of the last day of the Due Period in which such Loan became a
Liquidated Loan, from the Obligor, from a third party purchaser of the Loan,
under insurance or otherwise, net of Liquidation Expenses.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 6.01(b).
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
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"Note Majority" means Holders of Notes representing a majority of the
Class Principal Balance of each Class of Notes.
"Note Pool Factor" means, with respect to any Payment Date and any
Class of Notes, an eight-digit decimal figure equal to the outstanding principal
balance of such Class of Notes as of such Payment Date (after giving effect to
all distributions on such date) divided by the Original Class Principal Balance
of such Class of Notes.
"Note Principal Balance" means, as of any Payment Date, the sum of the
Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3
Principal Balance, the Class A-4 Principal Balance, the Class A-5 Principal
Balance, the Class A-6 Principal Balance, the Class M-1 Principal Balance and
the Class M-2 Principal Balance.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes, Class A-5 Notes, Class A-6 Notes, Class M-1 Notes and Class M-2
Notes.
"NRSRO" means any nationally recognized statistical rating
organization.
"Obligor" means a Person who is indebted under a Loan.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, President or any Vice President
of such Person and delivered to the Owner Trustee and/or the Indenture Trustee
as applicable.
"Opinion of Counsel" means a written opinion of counsel, who may,
except as expressly provided herein, be salaried counsel for the Servicer,
acceptable to the Indenture Trustee, the Owner Trustee and the Seller.
"Original Certificate Principal Balance" means the sum of the Original
Class B-1 Principal Balance and the Original Class B-2 Principal Balance.
"Original Class A-1 Principal Balance" means $45,100,000.
"Original Class A-2 Principal Balance" means $48,400,000.
"Original Class A-3 Principal Balance" means $24,900,000.
"Original Class A-4 Principal Balance" means $30,200,000.
"Original Class A-5 Principal Balance" means $35,000,000.
"Original Class A-6 Principal Balance" means $13,025,000.
"Original Class B-1 Principal Balance" means $14,437,000.
"Original Class B-2 Principal Balance" means $19,938,000.
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"Original Class M-1 Principal Balance" means $22,000,000.
"Original Class M-2 Principal Balance" means $17,875,000.
"Original Class Principal Balance" means, with respect to any Class,
the Original Class A-1 Principal Balance, the Original Class A-2 Principal
Balance, the Original Class A-3 Principal Balance, the Original Class A-4
Principal Balance, the Original Class A-5 Principal Balance, the Original Class
A-6 Principal Balance, the Original Class M-1 Principal Balance, the Original
Class M-2 Principal Balance, the Original Class B-1 Principal Balance or the
Original Class B-2 Principal Balance, as appropriate.
"Originator" means Conseco Finance Corp., a Delaware corporation.
"Over-Collateralization Amount" means, for any Payment Date, the
amount, if any, by which the aggregate Principal Balance of the Securities for
such Payment Date is less than the sum of the Pool Scheduled Principal Balance
for the immediately preceding Payment Date plus the Pre-Funded Amount on such
Payment Date.
"Owner Trustee" means Wilmington Trust Company, acting not individually
but solely as trustee, or its successor in interest, and any successor appointed
as provided in the Trust Agreement.
"Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Collection Account pursuant to the proviso in Section 3.05(a).
"Payment Date" means the fifteenth day of each calendar month during
the term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing on December 15, 1999.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Pool Scheduled Principal Balance" means, as of any Payment Date, the
aggregate Scheduled Principal Balance of all Loans that were outstanding as of
the last day of the related Due Period and other than Liquidated or Repurchased
Loans.
"Post-Funding Payment Date" means the Payment Date on, or the first
Payment Date after, the last day of the Pre-Funding Period.
"Pre-Funded Amount" means with respect to any date of determination,
the amount then on deposit in the Pre-Funding Account, after giving effect to
any sale of Subsequent Loans to the Trust on such date.
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"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 6.09.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000.00, or (b) the close of business on
December 17, 1999, or (c) the date on which a Servicer Termination Event occurs.
"Principal Prepayment" means a payment or other recovery of principal
on a Loan (exclusive of Liquidation Proceeds) which is received in advance of
its scheduled due date and applied upon receipt (or, in the case of a Partial
Principal Prepayment, upon the next scheduled Payment Date on such Loan) to
reduce the outstanding principal amount due on such Loan prior to the date or
dates on which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the
entire principal balance of a Loan.
"Rating Agencies" means Standard & Poor's and Moody's.
"Realized Losses" means, as to any Payment Date, the aggregate Net
Liquidation Losses for all Loans that became Liquidated Loans during the
immediately preceding Due Period.
"Record Date" means the Business Day immediately preceding the related
Payment Date.
"Related Documents" means the Transfer Agreement, the Trust Agreement,
the Indenture, the Administration Agreement, the Certificates, the Notes, the
Note Depository Agreement, the Certificate Depository Agreement, the Custodial
Agreement and the Underwriting Agreement. The Related Documents executed by any
party are referred to herein as "such party's Related Documents," "its Related
Documents" or by a similar expression.
"Repurchase Price" means, with respect to a Loan to be repurchased
pursuant to Section 3.05 or which becomes a Liquidated Loan, an amount equal to
(a) the remaining principal amount outstanding on such Loan, plus (b) interest
at the Loan Interest Rate on such Loan from the end of the Due Period with
respect to which the Obligor last made a scheduled payment through the date of
such repurchase or liquidation.
"Responsible Officer" means, with respect to the Owner Trustee, the
chairman and any vice chairman of the board of directors, the president, the
chairman and vice chairman of any executive committee of the board of directors,
every vice president, assistant vice president, the secretary, every assistant
secretary, cashier or any assistant cashier, controller or assistant controller,
the treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Owner Trustee
customarily performing functions similar to those performed by persons who at
the time shall be such officers, respectively, or to whom a corporate trust
matter is referred because of knowledge of, familiarity with, and authority to
act with respect to a particular matter.
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"Scheduled Principal Balance" means, with respect to any Loan and any
Payment Date or the applicable Cut-off Date, the principal balance of such Loan
as of the Due Date in the Due Period immediately preceding such Payment Date or
applicable Cut-off Date, as the case may be, as specified in the amortization
schedule at the time relating thereto (before any adjustment to such
amortization schedule by reason of any bankruptcy of an Obligor or similar
proceeding or any moratorium or similar waiver or grace period) after giving
effect to any previous Partial Principal Prepayments and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by, or extension granted to, the related Obligor. If for any Loan the Cut-off
Date is the date of origination of the Loan, its Scheduled Principal Balance as
of the Cutoff Date is the principal balance of the Loan on its date of
origination.
"Securities" means the Notes and the Certificates.
"Securityholders" means the Noteholders and the Certificateholders.
"Seller" means Conseco Finance Securitizations Corp., a Minnesota
corporation.
"Senior Subordination Percentage" means:
(i) on any Payment Date on which the Class A Principal Balance
has not been reduced to zero, a fraction, expressed as a percentage,
(x) the numerator of which is the sum of the Class M-1 Adjusted
Principal Balance, the Class M-2 Adjusted Principal Balance, the Class
B-1 Adjusted Principal Balance, the Class B-2 Adjusted Principal
Balance and the Over-Collateralization Amount and (y) the denominator
of which is the sum of the Pool Scheduled Principal Balance plus the
Pre-Funded Amount; or
(ii) on any Payment Date on which the Class A Principal
Balance has been reduced to zero and the Class M-1 Principal Balance
has not been reduced to zero, a fraction, expressed as a percentage,
(x) the numerator of which is the sum of the Class M-2 Adjusted
Principal Balance, the Class B-1 Adjusted Principal Balance, the Class
B-2 Adjusted Principal Balance and the Over-Collateralization Amount
and (y) the denominator of which is the sum of the Pool Scheduled
Principal Balance plus the Pre-Funded Amount; or
(iii) on any Payment Date on which the Class M-1 Principal
Balance has been reduced to zero and the Class M-2 Principal Balance
has not been reduced to zero, a fraction, expressed as a percentage,
(x) the numerator of which is the sum of the Class B-1 Adjusted
Principal Balance, the Class B-2 Adjusted Principal Balance and the
Over-Collateralization Amount and (y) the denominator of which is the
sum of the Pool Scheduled Principal Balance plus the Pre-Funded Amount;
or
(iv) on any Payment Date on which the Class M-2 Principal
Balance has been reduced to zero and the Class B-1 Principal Balance
has not been reduced to zero, a fraction, expressed as a percentage,
(x) the numerator of which is the Class B-2 Adjusted Principal Balance
and the Over-Collateralization Amount and (y) the denominator of which
is the sum of the Pool Scheduled Principal Balance plus the Pre-Funded
Amount.
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"Service Transfer" has the meaning assigned in Section 7.02.
"Servicer" means Conseco Finance Corp., a Delaware corporation, until
any Service Transfer hereunder and thereafter means the new servicer appointed
pursuant to Article VII.
"Servicer Termination Event" has the meaning assigned in Section 7.01.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Loans whose name appears on
a list of servicing officers appearing in an Officer's Certificate furnished to
the Trustee by the Servicer, as the same may be amended from time to time.
"Sixty-Day Delinquency Ratio" means, as to any Payment Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate of
the outstanding balances of all Loans that were delinquent 60 days or more as of
the end of the prior Due Period and all Loans in respect of which the related
real estate has been foreclosed upon but is still in inventory, and the
denominator of which is the Pool Scheduled Principal Balance as of such Payment
Date.
"Standard & Poor's" means Standard & Poor's Ratings Service, or any
successor thereto; provided that if Standard & Poor's no longer has a rating
outstanding on any Class of Securities, then references herein to "Standard &
Poor's" shall be deemed to refer to the NRSRO then rating any Class of the
Securities (or, if more than one such NRSRO is then rating any Class of the
Securities, to such NRSRO as may be designated by the Servicer), and references
herein to ratings by or requirements of Standard & Poor's shall be deemed to
have the equivalent meanings with respect to ratings by or requirements of such
NRSRO.
"Subsequent Cut-off Date" means the date specified as such in the
applicable Subsequent Transfer Instrument.
"Subsequent Loan" means a Loan sold by the Seller to the Trust pursuant
to Section 2.03, such Loan being identified as such in the Subsequent Transfer
Instrument.
"Subsequent Transfer Date" means, with respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Loans are sold to
the Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument dated as of a Subsequent Transfer Date executed by the Owner Trustee,
the Originator and the Seller substantially in the form of Exhibit F, by which
the Seller sells Subsequent Loans to the Trust.
"Trust" means Conseco Finance Home Loan Trust 1999-G.
"Trust Accounts" means the Collection Account, the Note Distribution
Account, the Pre-Funding Account, the Undelivered Loan Account and the
Certificate Distribution Account.
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"Trust Agreement" means the Trust Agreement dated as of September 1,
1999 between the Seller and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Fund" means the property conveyed to the Trust pursuant to
Section 2.01(a) and Section 2.03.
"Underwriter" means Bear, Xxxxxxx & Co. Inc.
"Underwriting Agreement" means the Underwriting Agreement dated as of
November 1, 1999 among the Originator, the Seller and the Underwriter, the
related Terms Agreement dated November 1, 1999, relating to the Class A and
Class M-1 Notes and the related Terms Agreement dated November 4, 1999 relating
to the Class B-2 Certificates.
"Unpaid Class A Interest Shortfall" means, as to any Payment Date, the
sum of the Unpaid Class A-1 Interest Shortfall, the Unpaid Class A-2 Interest
Shortfall, the Unpaid Class A-3 Interest Shortfall, the Unpaid Class A-4
Interest Shortfall, the Unpaid Class A-5 Interest Shortfall and the Unpaid Class
A-6 Interest Shortfall.
"Unpaid Class A-1 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class A-1 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class A-1 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class A-2 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class A-2 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class A-2 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class A-3 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class A-3 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class A-3 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class A-4 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class A-4 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class A-4 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class A-5 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class A-5 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class A-5 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class A-6 Interest Shortfall" means, as to any Payment Date,
the amount, if any, of (x) the Class A-6 Interest Carryover Shortfall, if any,
for the immediately prior Payment Date,
1-28
plus (y) accrued interest (to the extent payment thereof is legally permissible)
at the Class A-6 Interest Rate on such amount from such immediately prior
Payment Date to the current Payment Date.
"Unpaid Class B-1 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class B-1 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class B-1 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, with
respect to any Payment Date, the sum of the Class B-1 Liquidation Loss Interest
Shortfall, if any, for the prior Payment Date, plus accrued interest (to the
extent payment thereof is legally permissible) at the Class B-1 Interest Rate on
such amount from such immediately prior Payment date to the current Payment
Date.
"Unpaid Class B-2 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class B-2 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class B-2 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class M-1 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class M-1 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class M-1 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, with
respect to any Payment Date, the sum of the Class M-1 Liquidation Loss Interest
Shortfall, if any, for the prior Payment Date, plus accrued interest (to the
extent payment thereof is legally permissible) at the Class M-1 Interest Rate on
such amount from such immediately prior Payment Date to the current Payment
Date.
"Unpaid Class M-2 Interest Shortfall" means, as to any Payment Date,
the sum of (x) the Class M-2 Interest Carryover Shortfall, if any, for the
immediately prior Payment Date, plus (y) accrued interest (to the extent payment
thereof is legally permissible) at the Class M-2 Interest Rate on such amount
from such immediately prior Payment Date to the current Payment Date.
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, with
respect to any Payment Date, the sum of the Class M-2 Liquidation Loss Interest
Shortfall, if any, for the prior Payment Date, plus accrued interest (to the
extent payment thereof is legally permissible) at the Class M-2 Interest Rate on
such amount from such immediately prior Payment Date to the current Payment
Date.
"Weighted Average Interest Rate" means, for any Payment Date, with
respect to any Loan, the weighted average (expressed as a percentage and rounded
to four decimal places) of the
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Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 Class M-1,
Class M-2, Class B-1 and Class B-2 Interest Rates, weighted on the basis of the
respective Class A-1, Class A-2, Class A-3, Class A-4, Class X-0, Xxxxx X-0,
Class M-1, Class M-2, Class B-1 and Class B-2 Principal Balances immediately
prior to such Payment Date.
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ARTICLE II
TRANSFER OF LOANS
SECTION 2.01. Transfer of Loans.
(a) Subject to the terms and conditions of this Agreement, the Seller
hereby irrevocably and unconditionally transfers, assigns, sets over and
otherwise conveys to the Trust by execution of an Assignment substantially in
the form of Exhibit A hereto all right, title and interest of the Seller in and
to (1) the Loans (including, without limitation, the Collateral Security), and
all moneys payable thereon or in respect to the Loans, including any liquidation
proceeds therefrom but excluding payments due on the Loans on or prior to the
Cut-off Date, (2) all rights of the Seller under the Transfer Agreement and each
Subsequent Transfer Agreement, (3) the Errors and Omissions Protection Policy as
such policy relates to the Loans, (4) all items contained in the Loan Files, (5)
the Trust Accounts and all funds on deposit therein from time to time and all
investments and proceeds thereof (including all income thereon), and (6) all
proceeds and products of the foregoing.
(b) Although the parties intend that the conveyance pursuant to this
Agreement of the Seller's right, title and interest in and to the Loans shall
constitute a purchase and sale and not a pledge of security for loans from the
Certificateholders and/or the Noteholders, if such conveyance is deemed to be a
pledge of security for loans from the Certificateholders, the Noteholders or any
other Persons (the "Secured Obligations"), the parties intend that the rights
and obligations of the parties to the Secured Obligations shall be established
pursuant to the terms of this Agreement and that the Seller shall be deemed to
have granted to the Trust, and the Seller hereby grant to the Trust, a perfected
first-priority security interest in the items designated in Section 2.01(a)(1)
through 2.01(a)(5) above, and all proceeds thereof, to secure the Secured
Obligations, and that this Agreement shall constitute a security agreement under
applicable law. If the trust created by this Agreement terminates prior to the
satisfaction of the claims of any Person under any Certificate, any Note or the
Secured Obligations, the security interest created hereby shall continue in full
force and effect and the Owner Trustee shall be deemed to be the collateral
agent for the benefit of such Person.
SECTION 2.02. Conditions to Acceptance by Owner Trustee.
As conditions to the Owner Trustee's execution and delivery of the
Notes on behalf of the Trust and the execution, authentication and delivery of
the Certificates on behalf of the Trust on the Closing Date, the Owner Trustee
on behalf of the Trust shall have received the following on or before the
Closing Date:
(a) The List of Loans, certified by the Chairman of the Board,
President or any Vice President of the Originator (which certification may be
part of the Assignment delivered pursuant to Section 2.02(f)).
(b) A letter from PricewaterhouseCoopers LLP or another nationally
recognized accounting firm, stating that such firm has reviewed the Initial
Loans on a
2-1
statistical sampling basis and, based on such sampling, concluding that, except
with respect to those Loans so specified in the letter, such Loans conform in
all material respects to the List of Loans, to a confidence level of 97.5%, with
an error rate generally not in excess of 1.8%.
(c) Copies of resolutions of the board of directors of the Seller and
of the Originator or of the executive committee of the board of directors of the
Seller or the Originator, as applicable, approving the execution, delivery and
performance of this Agreement, its Related Documents and the transactions
contemplated hereunder, certified in each case by the secretary or an assistant
secretary of the Seller and the Originator, as applicable.
(d) Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota, and of the
Servicer under the laws of the State of Delaware.
(e) Evidence of filing of UCC-1 financing statements (a) with the
Secretary of State of Minnesota, executed by the Seller as debtor, naming the
Trust as secured party and describing the Loans as collateral and (b) with the
Secretary of State of Minnesota and the Secretary of State of Delaware executed
by the Trust as debtor, naming the Indenture Trustee as secured party and
describing the Indenture Collateral as collateral.
(f) An executed copy of the Assignment.
(g) Evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy.
(h) Evidence of deposit in the Collection Account of all funds received
with respect to the Loans prior to the Closing Date which were due on or after
the Cut-off Date, together with an Officer's Certificate of the Servicer to the
effect that such amount is correct.
(i) An Officer's Certificate of the Originator confirming that the
Originator's internal audit department has reviewed the original or a copy of
each Loan and each Loan File, that each Loan and Loan File conforms in all
material respects with the List of Loans and that each Loan File is complete in
all material respects, except to the extent permitted by this Agreement.
(j) Evidence of the deposit of $285,663.73 in the Pre-Funding Account.
(k) An executed copy of the Indenture Trustee's Acknowledgment
delivered under Section 6.01(k) of the Indenture.
(l) Such other documents and certificates as the Trust may request.
2-2
SECTION 2.03. Conveyance of the Subsequent Loans.
(a) Subject to the conditions set forth in paragraph (b) below, in
consideration of the Indenture Trustee's delivery on the related Subsequent
Transfer Dates to or upon the order of the Seller of the purchase price
therefor, the Seller shall on any Subsequent Transfer Date sell, transfer,
assign, set over and convey to the Trust by execution and delivery of a
Subsequent Transfer Instrument, all the right, title and interest of the Seller
in and to the Subsequent Loans identified on the List of Loans attached to the
Subsequent Transfer Instrument, including all rights to receive payments on or
with respect to the Subsequent Loans due after the related Subsequent Cut-off
Date, all items with respect to such Subsequent Loans in the related Loan Files,
and all rights of the Seller under the related Subsequent Transfer Agreement.
The transfer to the Trust by the Seller of the Subsequent Loans shall be
absolute and is intended by the Seller, the Owner Trustee, the Indenture
Trustee, the Noteholders and the Certificateholders to constitute and to be
treated as a sale of the Subsequent Loans by the Seller to the Trust.
The purchase price paid by the Trust shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balance of such Subsequent Loans.
The purchase price of Subsequent Loans shall be paid solely from amounts in the
Pre-Funding Account.
(b) The Seller shall transfer to the Trust the Subsequent Loans, and
the Trust shall release funds equal to the purchase price therefor from the
Pre-Funding Account only upon the satisfaction of each of the following
conditions on or prior to the related Subsequent Transfer Date:
(i) the Seller shall have provided the Owner Trustee and the
Indenture Trustee with an Addition Notice at least five Business Days
prior to the Subsequent Transfer Date and shall have provided any
information reasonably requested by the Owner Trustee and the Indenture
Trustee with respect to the Subsequent Loans;
(ii) the Seller shall have delivered the related Loan File for
each Subsequent Loan to the Indenture Trustee or its custodian at least
two Business Days prior to the Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Owner Trustee a
duly executed Subsequent Transfer Instrument substantially in the form
of Exhibit F, which shall include a List of Loans identifying the
related Subsequent Loans;
(iv) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the Seller shall not be
insolvent nor shall it have been made insolvent by such transfer nor
shall it be aware of any pending insolvency;
(v) the Pre-Funding Period shall not have ended;
(vi) the Seller shall have delivered to the Trustee an
Officer's Certificate, substantially in the form attached hereto as
Exhibit G, confirming the satisfaction of each
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condition precedent and the representations specified in this Section
2.03 and in Sections 3.01, 3.02, 3.03, 3.04 and 3.06;
(vii) the Seller and the Originator shall have delivered to
the Trustee Opinions of Counsel addressed to S&P, Xxxxx'x, the Owner
Trustee and the Indenture Trustee with respect to the transfer of the
Subsequent Loans substantially in the form of the Opinions of Counsel
delivered on the Closing Date regarding certain bankruptcy, corporate
and tax matters; and
(viii) the Seller shall have delivered assignments in
recordable form to the Indenture Trustee of the mortgages, deeds of
trust and security deeds relating to the Subsequent Loans.
(c) Before the last day of the Pre-Funding Period, the Seller shall
deliver to the Trustee:
(i) A letter from PricewaterhouseCoopers LLP or another
nationally recognized accounting firm retained by the Seller (with
copies provided to S&P and Xxxxx'x, the Underwriter, the Owner Trustee
and the Indenture Trustee) that is in form, substance and methodology
the same as that dated November 16, 1999 and delivered under Section
2.02(d) of this Agreement, except that it shall address the Subsequent
Loans and their conformity in all material respects to the
characteristics described in Section 3.04(b) of this Agreement.
(ii) Evidence that, as a result of the purchase by the Trust
of the Subsequent Loans, none of the ratings assigned to the Securities
as of the Closing Date by S&P or Xxxxx'x will be reduced, withdrawn or
qualified.
(d) Although the parties intend that the conveyance pursuant to each
Subsequent Transfer Instrument of the Seller's right, title and interest in and
to the related Subsequent Loans shall constitute a purchase and sale and not a
pledge of security for loans from the Certificateholders and/or the Noteholders,
if such conveyance is deemed to be a pledge of security for Secured Obligations,
the parties intend that the rights and obligations of the parties to the Secured
Obligations shall be established pursuant to the terms of this Agreement and the
related Subsequent Transfer Instrument and that the Seller shall be deemed to
have granted to the Trust, and the Seller hereby grant to the Trust, a perfected
first-priority security interest in the items designated in the related
Subsequent Transfer Instrument, and all proceeds thereof, to secure the Secured
Obligations, and that this Agreement and the related Subsequent Transfer
Instrument shall constitute a security agreement under applicable law. If the
Trust terminates prior to the satisfaction of the claims of any Person under any
Certificate, any Note or the Secured Obligations, the security interest created
hereby shall continue in full force and effect and the Owner Trustee shall be
deemed to be the collateral agent for the benefit of such Person.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of the Seller and the Originator makes the following
representations and warranties, effective as of the Closing Date, on which the
Trust will rely in accepting the Loans and the other Trust Property in trust and
on which the Owner Trustee relies in executing and delivering, on behalf of the
Trust, the Certificates and the Notes. The repurchase obligation of the
Originator set forth in Section 3.05 constitutes the sole remedy available to
the Trust, the Owner Trustee, the Indenture Trustee, and the Securityholders for
a breach of a representation or warranty of the Originator set forth in Sections
3.02, 3.03 and 3.04 of this Agreement or in the Officer's Certificate delivered
pursuant to Section 2.02(i) of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Seller and
Originator and Covenants of the Originator.
The representations and warranties set forth in this Section 3.01 shall
survive delivery by the Seller of the Loans and the Loan Files. As promptly as
practicable, but in any event, within 60 days of its discovery or its receipt of
notice from any Person of a material breach of any representation or warranty in
this Section 3.01, the Originator shall cure such breach in all material
respects.
(a) Organization and Good Standing. Each of the Seller and the
Originator, as applicable, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the corporate power to own its assets and to
transact the business in which it is currently engaged. Each of the
Seller and the Originator, as applicable, is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse effect on
the business, properties, assets, or condition (financial or other) of
the Seller.
(b) Authorization; Binding Obligations. Each of the Seller and
the Originator has the power and authority to make, execute, deliver
and perform this Agreement and its Related Documents and all of the
transactions contemplated under this Agreement and thereunder and to
sell and assign the Trust Property to be sold and assigned to the Trust
by it and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and its Related
Documents. When executed and delivered, this Agreement and its Related
Documents will constitute the legal, valid and binding obligations of
each of the Seller and the Originator enforceable in accordance with
their terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies.
(c) No Consent Required. Neither the Seller nor the Originator
is required to obtain the consent of any other party or any consent,
license, approval or authorization
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from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
(d) No Violations. The execution, delivery and performance by
the Seller and the Originator of this Agreement and its Related
Documents and the fulfillment of their terms will not violate any
provision of any existing law or regulation or any order or decree of
any court or the related Articles of Incorporation or Bylaws of the
Seller and the Originator, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which either the
Seller or the Originator is a party or by which the either the Seller
or the Originator may be bound.
(e) Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently
pending, or to the knowledge of the Seller or the Originator
threatened, against the Seller or the Originator or any of its
properties or with respect to this Agreement, the Related Documents, or
the Securities which, if adversely determined, would in the opinion of
the Seller or the Originator have a material adverse effect on the
transactions contemplated by this Agreement and Related Documents.
(f) Licensing. Each of the Seller and the Originator is duly
registered as a finance company in each state in which Loans were
originated, to the extent such registration is required by applicable
law.
(g) Chief Executive Office. The chief executive office of each
of the Seller and the Originator is at 1100 Landmark Towers, 000 Xx.
Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000.
(h) Absolute Sale. The Seller intends that the transfer of
Loans and the Collateral Security constitute a complete and absolute
sale, removing the Loans and the Collateral Security from the Seller's
estate, for purposes of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy
Code, as amended.
(i) No Default. Neither the Seller nor the Originator is in
default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or governmental
agency, which default would materially and adversely affect its
condition (financial or other) or operations or its properties or the
consequences of which would materially and adversely affect its
performance hereunder and under its other Related Documents. Neither
the Seller nor the Originator is in default under any agreement
involving financial obligations or on any outstanding obligation which
would materially adversely impact its financial condition or operations
or legal documents associated with the transaction contemplated by this
Agreement or the other Related Documents.
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(j) Non-consolidation Covenants. With respect to the Seller
and, for so long as Green Tree Finance Corp.--Two ("GTFC-2") is the
Class C Certificateholder, with respect to GTFC-2, the Originator
covenants that:
(i) it will at all times hold out to the public,
including the respective creditors of the Originator, the
Seller and GTFC-2, that it is a separate entity from the
others. The Originator, the Seller and GTFC-2 will not share a
common logo. The Originator will not hold out or consider the
Seller or GTFC-2 as a department or division of the
Originator.
(ii) Other than the payment of certain of the
organizational expenses of the Seller and GTFC-2 by the
Originator, each of the Seller and GTFC-2 will be responsible
for the payment of all its losses, obligations and expenses,
and it will be adequately capitalized to conduct its business.
(iii) All transactions and dealings between the
Originator and the Seller or GTFC-2 will be on such terms and
conditions as would be generally available to entities
unaffiliated with the Originator in comparable transactions.
All such transactions have been and will be made only with
prior approval of the Seller's or GTFC-2's (as applicable)
Board of Directors, at arm's length, in good faith, and
without the intent to hinder, delay or defraud creditors of
either entity, and transfers between the Originator, the
Seller or GTFC-2 will not be made if the party making the
transfer is insolvent or would be rendered insolvent by the
transfer.
(iv) Following the formation of the Trust, the
Originator will disclose all material transactions associated
with the transaction in communications to its shareholders and
in public announcements which will disclose the separate
corporate identity of the Seller and GTFC-2 and that the
assets of the Seller and GTFC-2 will not be available for
payment of creditors' claims in the event of the insolvency of
the Originator.
(v) Each of the Seller and GTFC-2 will comport itself
in a manner consistent with the factual assumptions contained
in the "nonconsolidation opinions" of Xxxxxx & Xxxxxxx LLP
dated November 16, 1999 rendered in connection with the
issuance of the Notes.
SECTION 3.02. Representations and Warranties Regarding Each Loan. The
Originator has made the following representations and warranties to the Seller
in the Transfer Agreement, which representations and warranties the Seller has
assigned to the Trust for the benefit of the Noteholders and the
Certificateholders, as of the Closing Date with respect to each Initial Loan
and, as of each Subsequent Transfer Date, with respect to each Subsequent Loan
identified on the List of Loans attached to the related Subsequent Transfer
Instrument:
(a) List of Loans. The information set forth in the List of Loans is
true, complete and correct as of its date.
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(b) Payments. No scheduled payment due under the Loan was delinquent
over 59 days as of the applicable Cut-off Date.
(c) Costs Paid and No Waivers. The terms of the Loan have not been
waived, altered or modified in any respect, except by instruments or documents
identified in the Loan File. All costs, fees and expenses incurred in making,
closing and perfecting the lien of the Loan have been paid. The subject real
property has not been released from the lien of such Loan.
(d) Binding Obligation. The Loan is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally.
(e) No Defenses. The Loan is not subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Loan or the exercise of any right
thereunder will not render the Loan unenforceable in whole or in part or subject
to any right of rescission, setoff, counterclaim or defense, including the
defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
(f) Insurance Coverage. The Originator has been named as an additional
insured party under any hazard insurance on the property described in the Loan,
to the extent required by the Originator's underwriting guidelines, which
coverage represents not less than the least of (i) the outstanding principal
balance of the Loan (together, in the case of a junior mortgage loan, with the
outstanding principal balance of all liens senior thereto), (ii) the minimum
amount required to compensate for damage or loss to the related real property on
a replacement cost basis, or (iii) the full insurable value of the related real
property. If upon origination of the Loan, the property securing the Loan was in
an area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and if flood insurance was required by
federal regulation and such flood insurance has been made available in the
locale where the property is located), the property is covered by a flood
insurance policy of the nature and in an amount which is consistent with the
servicing standard set forth in Section 5.02.
(g) Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Loan or an interest therein pursuant to the Transfer Agreement or this
Agreement, or pursuant to transfers of the Securities, unlawful or render the
Loan unenforceable.
(h) Compliance with Law. At the date of origination of the Loan, all
requirements of any federal and state laws, rules and regulations applicable to
the Loan, including, without limitation, usury, truth in lending and equal
credit opportunity laws, have been complied with, and the Originator shall for
at least the period of this Agreement, maintain in its possession, available for
the Owner Trustee's inspection, and shall deliver to the Owner Trustee upon
demand, evidence of compliance with all such requirements.
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(i) Loan in Force. The Loan has not been satisfied or subordinated to a
lower lien ranking than its original position in whole or in part or rescinded,
and the real property securing the Loan has not been released from the lien of
the Loan in whole or in part.
(j) Valid Lien. Each Loan has been duly executed and delivered by the
Obligor, and the lien created thereby has been duly recorded, or has been
delivered to the appropriate governmental authority for recording and will be
duly recorded within 180 days and constitutes a valid and perfected first,
second, third or fourth priority lien on the real estate described in such Loan.
(k) Capacity of Parties. The signature(s) of the Obligor(s) on the Loan
are genuine and all parties to the Loan had full legal capacity to execute the
Loan.
(l) Good Title. The Originator is the sole owner of the Loan and has
the authority to sell, transfer and assign such Loan to the Seller under the
terms of the Transfer Agreement. There has been no assignment, sale or
hypothecation of the Loan by the Originator except the usual past hypothecation
of the Loan in connection with the Originator's normal banking transactions in
the conduct of its business, which hypothecation terminates upon sale of the
Loan to the Seller. The Originator has good and marketable title to the Loan,
free and clear of any encumbrance, equity, loan, pledge, charge, claim, or
security interest of any type and has full right to transfer the Loan to the
Seller.
(m) No Defaults. There is no default, breach, violation or event
permitting acceleration existing under the Loan and no event which, with notice
and the expiration of any grace or cure period, would constitute such a default,
breach, violation or event permitting acceleration under such Loan (except
payment delinquencies permitted by clause (b) above). The Originator has not
waived any such default, breach, violation or event permitting acceleration
except payment delinquencies permitted by clause (b) above.
(n) No Liens. There are, to the best of the Originator's knowledge, no
liens or claims which have been filed for work, labor or materials affecting the
Collateral Security securing the Loan which are or may be liens prior to, or
equal or coordinate with, the lien of the Loan.
(o) Equal Installments. Each Loan has a fixed Loan Interest Rate and
provides for substantially level monthly payments which fully amortize the loan
over its term.
(p) One Original. There is only one original executed Loan, which Loan
has been delivered to the Indenture Trustee or its custodian on or before the
Closing Date (in the case of an Initial Loan) or the related Subsequent Transfer
Date (in the case of a Subsequent Loan).
(q) Genuine Documents. All documents submitted are genuine, and all
other representations as to the Loan, including the List of Loans, are true and
correct. Any copies of documents provided by the Originator are accurate and
complete (except that, with respect to any Loan that was originated by a
contractor or lender other than the Originator, the Originator makes such
representation and warranty only to the best of the Originator's knowledge).
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(r) Origination. Each Home Improvement Loan was originated by a home
improvement contractor in the ordinary course of such contractor's business or
was originated by the Originator directly. Each Home Equity Loan was originated
by a home equity lender in the ordinary course of such lender's business or was
originated by the Originator directly.
(s) Underwriting Guidelines. The Loan was originated or purchased in
accordance with the Originator's then-current underwriting guidelines.
(t) Good Repair. The property described in the Loan is, to the best of
the Originator's knowledge, free of damage and in good repair.
(u) No Government Loans. No Obligor is the United States government or
an agency, authority, instrumentality or other political subdivision of the
United States government.
(v) Consolidation of Advances. Any advances made after the date of
origination of the Loan but prior to the applicable Cut-off Date have been
consolidated with the outstanding principal amount secured by the related
mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the List of Loans. The
consolidated principal amount does not exceed the original principal amount of
the Loan. The Loan does not obligate the Servicer to make future advances to the
Obligor at the option of the Obligor.
(w) Condemnation. There is no proceeding pending or threatened for the
total or partial condemnation of the real property that is described in the
Loan, nor is such a proceeding currently occurring.
(x) Encroachments. Any improvements which were included for the
purposes of determining the appraised value of any real property securing the
Loan are wholly within the boundaries and building restriction lines of such
real property, and no improvements on adjoining properties encroach upon such
real property.
(y) Zoning. No improvement located on or part of any real property that
is described in the Loan is in violation of any applicable zoning law or
regulation, and all inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the property and, with
respect to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities and such property is lawfully occupied
under the applicable law.
(z) Deeds of Trust. If the Loan constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Loan, and no fees or
expenses are or will become payable by the Indenture Trustee to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the related Obligor.
(aa) Remedies. The Loan contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the related
3-6
property of the benefits of the security, including (i) in the case of a
mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. There is no homestead or other exemption, other than any
applicable redemption rights available to the related Obligor, which would
materially interfere with the right to sell the related property at a trustee's
sale or the right to foreclose the related mortgage.
(bb) Appraisal. The Loan was, to the extent required by the
Originator's underwriting guidelines, originated based upon a full appraisal,
which included an interior inspection of the subject property by a qualified
appraiser, duly appointed by the Originator, who had no interest, direct or
indirect in the related real property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Loan.
(cc) Hazardous Substances. The Originator has no actual knowledge that
there exist any hazardous substances, hazard wastes or solid wastes, as such
terms are defined in the Comprehensive Environmental Response Compensation and
Liability Act, the Resource Conservation and Recovery Act of 1976, or other
federal, state or local environmental legislation,
on any real property described in the Loan.
(dd) Ground Lease. With respect to any real property described in the
Loan subject to a ground lease (i) the current ground lessor has been identified
and all ground rents which have previously become due and owing have been paid,
(ii) the ground lease term extends, or is automatically renewable, for at least
five years beyond the maturity date of the Loan, (iii) the ground lease has been
duly executed and recorded, (iv) the amount of the ground rent and any increases
therein are clearly identified in the lease and are for predetermined amounts at
predetermined times, (v) the ground rent payment is included in the Obligor's
monthly payment as an expense item in determining the qualification of the
borrower for the Loan, (vi) the Originator has the right to cure defaults on the
ground lease, and (vii) the terms and conditions of the leasehold do not prevent
the free and absolute marketability of the property.
(ee) Defaults on Prior Liens. The Originator has not received notice of
default of any prior mortgage loan secured by any real property described in the
Loan which default has not been cured by a party other than the Originator.
(ff) Certain Advances. The Originator has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of any real property described in the Loan or the Obligor,
directly or indirectly, for the payment of any amount required by any Loan.
(gg) Review of the Loan File. The Originator has reviewed all of the
documents constituting the Loan File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein.
(hh) Knowledge of Certain Facts. The Originator has no knowledge of any
circumstances or conditions not reflected in the representations set forth
herein, or in the Loan File with respect to the Loan, the related real property
or the related Obligor which, in the Originator's opinion, could reasonably be
expected to affect materially and adversely the value of
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related real property, the marketability of the Loan, or cause the Loan to
become delinquent or otherwise in default.
(ii) Manufactured Home. The Loan is not a loan in respect of a
manufactured home or the land on which a manufactured home or manufactured home
will be placed.
(jj) No Errors, Omissions, Etc. No error, omission, misrepresentation,
negligence, fraud or similar occurrence with respect to the Loan has taken place
on the part of any person, including without limitation the obligor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Loan or in the application of any insurance in relation to
the Loan.
(kk) Servicing. The Loan has been serviced in accordance with all
applicable laws and, to the best of the Originator's knowledge, no fraud or
misrepresentation was committed by any Person in connection therewith.
(ll) Inspection. Upon completion of all home improvements in excess of
$5,000, the real property securing such Loan was inspected by the Originator or
its agents.
(mm) No Bankruptcies. The real property described in the Loan has not
been subject to any bankruptcy proceeding or foreclosure proceeding to which the
Obligor was a party, and the Obligor has not filed for protection under
applicable bankruptcy laws. There is no homestead or other exemption available
to the Obligor which would interfere with the right to sell the real property at
a trustee's sale or the right to foreclose the related mortgage. The Obligor has
not notified the Originator, and the Originator has no knowledge of, any relief
requested or allowed to the Obligor under the Soldier's and Sailors' Civil
Relief Act of 1940, as amended.
(nn) Certain Disclosure Statements. Each Obligor has executed a
statement to the effect that it has received all disclosure materials required
by applicable law with respect to the making of fixed rate mortgage loans and
rescission materials with respect to home improvement loans, and such statement
will be retained.
SECTION 3.03. Representations and Warranties Regarding the Loans in the
Aggregate.
(a) Amounts. The aggregate principal amounts payable by Obligors under
the Loans as of the Cut-off Date equal the Cut-off Date Pool Principal Balance.
(b) Characteristics of the Loans. The Loans (including the Initial,
Additional and Subsequent Loans) will have the following characteristics:
(i) 100% are secured by a mortgage, deed of trust or security
deed on the related real estate;
(ii) none has a remaining maturity of more than 360 months;
(iii) none has a final scheduled payment date later than
September 2029;
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(iv) none has a Loan Interest Rate less than 7.75%;
(v) none was originated before April 24, 1990;
(vi) none contains a provision for the extension of the
original term of the related note;
(vii) The percentage (by Scheduled Principal Balance) of the
Loans as of the Post-Funding Payment Date which are identified by the
Originator under its standard underwriting criteria as "B," "C," and
"D" credits will not be more than 300 basis points, 200 basis points,
and 100 basis points, respectively, more than the percentage of Initial
Loans identified as B, C, and D credits.
(viii) the Loans have a weighted average Loan Interest Rate of
at least 14.31%;
(ix) no Loan had a remaining term to maturity at origination
of more than 360 months;
(x) no more than 1% of the Loans, by principal balance as of
the applicable Cut-off Date, were secured by properties located in an
area with the same zip code; and
(xi) no more than 5% of the Loans, by principal balance as of
the applicable Cut-off Date, were originated by any one contractor or
lender.
(c) Representations and Warranties Regarding the Additional and
Subsequent Loans in the Aggregate.
(i) no adverse selection procedures were employed in selecting
the Additional and Subsequent Loans;
(ii) each Additional and Subsequent Loan was not more than 31
days delinquent as of the applicable Cut-Off Date;
(iii) no Additional or Subsequent Loan has a Loan Interest
Rate less than 7.75%;
(iv) as a result of the purchase of the Additional and
Subsequent Loans, the weighted average Loan Interest Rate of all the
Loans may not be less than the weighted average Loan Interest Rate of
the Initial Loans;
(v) the weighted average combined loan-to-value ratio of the
Additional and Subsequent Loans may be no more than 1.00% higher than
such ratio with respect to the Initial Loans;
(vi) no more than 1% of the aggregate Cut-off Date Principal
Balance of the Loans may be secured by property located in an area with
the same five-digit zip code;
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(vii) as a result of the purchase of the Additional and
Subsequent Loans, which may not have weighted average FICO score less
than that of the initial loans, the percentage of all loans, by
aggregate principal balance, with a FICO score less than 620 will not
increase by more than 2%;
(viii) no Additional or Subsequent Loan may be a Title I loan;
(ix) all Additional and Subsequent Loans will be single family
and owner-occupied;
(x) no Additional or Subsequent Loans will be adjustable rate
loans;
(xi) as a result of the purchase of the Additional and
Subsequent Loans, the weighted average debt-to-income ratio, by
aggregate Cut-Off Date Principal Balance of all Loans, will not be
greater than such ratio with respect to the Initial Loans, and no
Additional or Subsequent Loan will have an individual debt-to-income
ratio greater than 60%;
(d) Additional and Subsequent Home Improvement Loans. The Originator
represents and warrants with respect to each Additional and Subsequent Loan that
is a Home Improvement Loan:
(i) it is secured by a mortgage, deed of trust or security
deed on the related real estate;
(ii) it has an original stated term to maturity not to exceed
360 months;
(iii) the weighted average Loan Interest Rate of the
Additional and Subsequent Home Improvement Loans will not be more than
5 basis points below the weighted average Loan Interest Rate of all
Initial Loans;
(iv) the Additional and Subsequent Home Improvement Loans do
not cause the percentages in the states representing more than 5% of
the aggregate Cut-Off Date Principal Balances of the Home Improvement
Loans to increase by more than 1%;
(v) the Initial Home Improvement Loan lien status percentage
of third and fourth liens is 7.22%. The additional and subsequent loans
does not cause this percentage to go up more than 1%; and
(vi) each Additional and Subsequent Home Improvement Loan was
originated under the same underwriting guidelines as the Initial Home
Improvement Loans.
(e) Additional and Subsequent Home Equity Loans. The Originator
represents and warrants with respect to each additional or Subsequent Loan that
is a home equity loan:
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(i) the Additional and Subsequent Loans cannot cause the
percentages in the states representing more than 5% of the aggregate
Cut-off Date Principal Balances of the Home Equity Loans to increase by
more than 1%;
(ii) the percentage (by original scheduled principal balance)
of the Loans as of December 17, 1999 which are identified by the
Originator under its standard underwriting criteria as "B", "C" and "D"
credits will not be more than 300 basis points, 200 basis points and
100 basis points, respectively, more than the percentage of Initial
Home Equity Loans identified as B, C and D credits;
(iii) the Initial Home Equity Loan lien status percentage of
third liens is 14.55%. The Additional and Subsequent Loans does not
cause the preceding percentage to go up more than 1%;
(iv) the percentage of home equity loans in the initial pool
designated by the borrower as debt consolidation is 68.20%. The
Additional and Subsequent Home Equity Loans will not increase the debt
consolidation percentage by more than 2%; and
(v) each Additional and Subsequent Loan has been originated
under the same underwriting guidelines as the Initial Home Equity
Loans.
(f) Computer Tape. The Computer Tape made available by the Originator
was complete and accurate as of its date and includes a description of the same
Loans that are described in the List of Loans.
(e) Marking Records. The Originator has caused the portions of the
Electronic Ledger relating to the Loans to be clearly and unambiguously marked
to indicate that such Loans constitute part of the Trust and are owned by the
Trust in accordance with the terms of the trust created under the Trust
Agreement.
(f) No Adverse Selection. Except for the effect of the representations
and warranties made in Sections 3.02 and 3.03 hereof, no adverse selection
procedures have been employed in selecting the Loans.
(g) Not Principally Real Estate Secured, etc. With respect to at least
50% of the Loans in the aggregate: (i) the fair market value of the interest in
the real property securing each such Loan is less than 80% of the adjusted issue
price of such Loan at the time the obligation was originated; and (ii)
substantially all of the proceeds of each such Loan were not used to acquire,
improve or protect an interest in real property that, at the origination date,
was the only security for such Loan.
(h) Non-Owner Occupied. As of the Cut-off Date, no more than1.00% of
the Scheduled Principal Balance of the Loans is secured by real property that is
non-owner occupied property (i.e., investor-owned and vacation property).
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(i) Ground Leases. As of the Cut-off Date, the aggregate Scheduled
Principal Balance of all Loans subject to ground leases does not exceed 1% of
the Cut-off Date Pool Scheduled Principal Balance.
(j) Income Verification. No more than 1.00% of the Scheduled Principal
Balance of the Loans was originated under any non-income verification program of
the Originator.
SECTION 3.04. Representations and Warranties Regarding the Loan Files.
(a) Possession. Immediately prior to the Closing Date (in the case of
an Initial Loan) or Subsequent Transfer Date (in the case of a Subsequent Loan),
the Originator will have possession of each original Loan and the related Loan
File and there are not and there will not be any custodial agreements in effect
that materially and adversely affect the rights of the Originator to make, or
cause to be made, any delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Loans and the Loan Files by the Originator pursuant to the Transfer Agreement,
and by the Seller pursuant to this Agreement, is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.
SECTION 3.05. Repurchase of Loans for Breach of Representations and
Warranties.
(a) The Originator shall repurchase a Loan, at its Repurchase Price,
not later than the last day of the Due Period prior to the Due Period during
which occurs the 90th day after the day on which the Originator, the Seller, the
Servicer, the Owner Trustee or the Indenture Trustee first discovers, or the
Originator or the Servicer should have discovered, a breach of a representation
or warranty set forth in Sections 3.02, 3.03, 3.04 or 3.06 of this Agreement or
in the Officer's Certificate delivered pursuant to Section 2.02(i) that
materially adversely affects the interest of the Trust or the Securityholders in
such Loan and which breach has not been cured; provided, however, that (i) in
the event that a party other than the Originator first becomes aware of such a
breach, such discovering party shall notify the Originator in writing within
five Business Days of the date of such discovery (although the failure of a
party to give such notice shall not relieve the Originator of its repurchase
obligation hereunder), (ii) with respect to any Loan incorrectly described on
the List of Loans with respect to unpaid principal balance, which the Originator
would otherwise be required to repurchase pursuant to this Section, the
Originator may, in lieu of repurchasing such Loan, deposit in the Collection
Account no later than the first Determination Date that is 90 or more days from
the date of such discovery cash in an amount sufficient to cure such deficiency
or discrepancy, plus interest, at the Loan Interest Rate, on the amount of such
deficiency, from the Cut-off Date to the date of deposit, (iii) any repurchase
of Loans as a result of the breach of a representation and warranty set forth in
Section 3.03 shall be without adverse selection of Loans. Any such cash so
deposited shall be accounted for as a collection of principal or interest on
such Loan, according to the nature of the deficiency or discrepancy.
Notwithstanding any other provision of this Agreement, the obligation of the
Originator under this Section shall not terminate upon a Service Transfer
pursuant to Article VII.
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(b) Upon receipt by the Trust by deposit in the Collection Account of
the Repurchase Price under subsection (a) above, and upon receipt of a
certificate of a Servicing Officer in the form attached hereto as Exhibit B, the
Indenture Trustee shall release its security interest in such Loan and the Owner
Trustee on behalf of the Trust shall convey and assign to the Originator all of
the Securityholders' right, title and interest in the repurchased Loan without
recourse, representation or warranty, except as to the absence of liens, charges
or encumbrances created by or arising as a result of actions of the Trust.
(c) The Originator shall defend and indemnify the Owner Trustee, the
Trust, the Indenture Trustee and the Securityholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, arising out of any claims which may be asserted against or
incurred by any of them as a result of any third-party action arising out of any
breach of any representation set forth in Sections 3.02, 3.03, 3.04 or 3.06 of
this Agreement or in the Officer's Certificate delivered pursuant to Section
2.02(i) of this Agreement.
SECTION 3.06. Additional Representations and Warranties. The Seller
hereby represents and warrants to the Trust for the benefit of the Noteholders
and the Certificateholders, as of the Closing Date with respect to each Initial
Loan and as of the related Subsequent Transfer Date with respect to each
Subsequent Loan:
(a) Lawful Assignment. The Loan was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Loan under this Agreement or pursuant to transfers of the Notes or
Certificates unlawful or render the Loan unenforceable. The Seller has duly
executed a valid blanket assignment of the Loans transferred to the Trust, and
has transferred all its right, title and interest in such Loans. The Assignment
or Subsequent Transfer Instrument, any and all documents executed and delivered
by the Seller pursuant to Section 2.01(a) or Section 2.03, as applicable, and
this Agreement each constitutes the legal, valid and binding obligation of the
Seller enforceable in accordance with its respective terms.
(b) Good Title. The Seller is the sole owner of the Loan and has the
authority to sell, transfer and assign such Loan to the Trust under the terms of
this Agreement. There has been no assignment, sale or hypothecation of the Loan
by the Seller, which hypothecation terminates upon sale of the Loan to the
Trust. The Seller has good and marketable title to the Loan, free and clear of
any encumbrance, equity, loan, pledge, charge, claim, or security interest of
any type and has full right to transfer the Loan to the Trust.
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ARTICLE IV
PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
SECTION 4.01. Custody of Loans.
(a) The Trust appoints the Indenture Trustee to maintain custody of the
Loan Files for the Loans, as further specified in Section 6.01(k) of the
Indenture.
(b) The Originator has delivered to the Indenture Trustee the original
copy of each Initial Loan, endorsed to the Indenture Trustee or in blank and
within 30 days of the Closing Date the Originator shall deliver to the Indenture
Trustee (if it has not previously done so) with respect to each Initial Loan an
assignment in recordable form of each mortgage, deed of trust or security deed
securing the Loan, and the remainder of the Loan File for each Loan. Pursuant to
Section 2.03(b)(ii) of this Agreement, the Originator shall deliver the related
Loan File for each Subsequent Loan to the Indenture Trustee or its custodian at
least two Business Days prior to the Subsequent Transfer Date.
(c) The Originator has delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the execution and recording of the assignments of the
mortgages, deeds of trust and security deeds securing the Loans is not
necessary, in any jurisdiction other than the State of Maryland, to effect the
assignment to the Trust and the pledge to the Indenture Trustee of the
Originator's lien on the real property securing each Loan. If, as of the
Post-Funding Payment Date, the aggregate Scheduled Principal Balance of Loans
secured by real property located in Maryland ("Maryland Loans") exceeds 10% of
the Pool Scheduled Principal Balance, the Originator shall, within sixty (60)
days, submit to the appropriate recording offices the assignments to the
Indenture Trustee of the number of mortgages, deeds of trust or security deeds
required to reduce to less than 10% of the Pool Scheduled Principal Balance the
aggregate Scheduled Principal Balance of Maryland Loans as to which such
assignments are not recorded. In the event that the Originator does not comply
with the requirements of the preceding sentence, the Originator shall repurchase
enough of such Maryland Loans until the aggregate Scheduled Principal Balance of
the Maryland Loans is less than 10% of the Pool Scheduled Principal Balance.
SECTION 4.02. Filings.
On or prior to the Closing Date, the Seller shall cause the UCC-1
financing statements referred to in Section 2.02(e) to be filed. The Servicer on
behalf of the Trust shall cause to be filed all necessary continuation
statements of the UCC-1 financing statements. From time to time the Servicer
shall take and cause to be taken such actions and execute such documents as are
necessary to perfect and protect the Securityholders' interests in the Loans,
the Collateral Security and their proceeds against all other persons, including,
without limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title. If the
Servicer comes into possession of any Loan File, whether for purposes of
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enforcement of the Loan or otherwise, the Servicer will maintain the first
priority perfected security interest of the Trust in such Loan so long as the
Loan is property of the Trust.
SECTION 4.03. Name Change or Relocation.
(a) During the term of this Agreement, the Seller shall not change its
name, identity or structure or relocate its chief executive office without first
giving notice thereof to the Owner Trustee, the Indenture Trustee and the
Servicer. In addition, following any such change in the name, identity,
structure or location of the chief executive office of the Seller, the Seller
shall give written notice of any such change to Standard & Poor's and Xxxxx'x.
(b) If any change in the Seller's name, identity or structure or the
relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute or would cause the security interest evidenced by any such financing or
continuation statement or notice of lien to become unperfected (whether
immediately or with lapse of time), the Seller, no later than five days after
the effective date of such change, shall file, or cause to be filed, such
amendments or financing statements as may be required to preserve, perfect and
protect the Securityholders' interests in the Loans, including the Collateral
Security and all proceeds thereof.
SECTION 4.04. Chief Executive Office.
During the term of this Agreement, the Seller will maintain its chief
executive office in one of the States of the United States, except Tennessee.
SECTION 4.05. Costs and Expenses.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Securityholders' right, title and interest in and to the
Loans, including the Collateral Security and all proceeds thereof.
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ARTICLE V
SERVICING OF CONTRACTS
SECTION 5.01. Responsibility for Loan Administration.
The Servicer will have the sole obligation to manage, administer,
service and make collections on the Loans and perform or cause to be performed
all contractual and customary undertakings of the holder of the Loans to the
Obligor. The Servicer may delegate duties under this Agreement to any of the
Servicer's Affiliates. In addition, the Servicer may at any time perform the
specific duty of foreclosing mortgage liens through subcontractors who are in
such business. The Servicer may also perform other specific duties through
subcontractors; provided that the Servicer gives notice to each of the Owner
Trustee, the Indenture Trustee and the Rating Agencies of the use of any such
subcontractors; and provided further that no such delegation of duties by the
Servicer shall relieve the Servicer of its responsibility with respect thereto.
The Owner Trustee, on behalf of the Trust and at the request of a Servicing
Officer, shall furnish the Servicer with any powers of attorney or other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Conseco Finance Corp. is hereby
appointed the Servicer until such time as any Service Transfer shall be effected
under Article VII.
SECTION 5.02. Standard of Care.
In managing, administering, servicing and making collections on the
Loans pursuant to this Agreement, the Servicer will exercise that degree of
skill and care required consistent with the highest degree of skill and care
that the Servicer exercises with respect to similar contracts serviced by the
Servicer; provided, however, that notwithstanding the foregoing, the Servicer
shall not release or waive the right to collect the unpaid balance on any Loan.
SECTION 5.03. Records.
The Servicer shall, during the period it is servicer hereunder,
maintain such books of account and other records as will enable the Owner
Trustee and the Indenture Trustee to determine the status of each Loan.
SECTION 5.04. Inspection; Computer Tape.
(a) At all times during the term hereof, the Servicer shall afford the
Owner Trustee and the Indenture Trustee and their authorized agents reasonable
access during normal business hours to the Servicer's records relating to the
Loans and will cause its personnel to assist in any examination of such records
by the Owner Trustee and Indenture Trustee or their authorized agents. The
examination referred to in this Section will be conducted in a manner which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Owner Trustee and Indenture Trustee may make, the Owner Trustee and Indenture
Trustee may, using generally accepted audit procedures, verify the status of
each Loan and review the Electronic Ledger and
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records relating thereto for conformity to Monthly Reports prepared pursuant to
Section 5.11 and compliance with the standards represented to exist as to each
Loan in this Agreement.
The Servicer shall provide to any Securityholder such access to the
records relating to the Loans only in such cases where the Servicer is required
by applicable statutes or regulations, whether applicable to the Servicer or to
such Securityholder, to permit such Securityholder to review such documentation.
In each case, such access shall be afforded without charge but only upon
reasonable request and during normal business hours. Nothing in this Section
shall derogate from the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors, and the failure of
the Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section. Any Securityholder, by
its acceptance of a Certificate or Note (or by acquisition of its beneficial
interest therein), as applicable, shall be deemed to have agreed to keep
confidential and not to use for its own benefit any information obtained by it
pursuant to this Section, except as may be required by applicable law.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Loans at its principal executive office for
inspection by the Owner Trustee and the Indenture Trustee.
(c) On or before the ninth Business Day of each month, the Servicer
will provide to the Indenture Trustee a Computer Tape setting forth a list of
all the outstanding Loans and the outstanding principal balance of each such
Loan as of the end of the next preceding Due Period.
SECTION 5.05. Collections.
(a) The Servicer shall pay into the Collection Account as promptly as
practicable (not later than the next Business Day) following receipt thereof all
payments from Obligors and Net Liquidation Proceeds (other than late payment
penalty fees, extension fees and assumption fees, which shall be retained by the
Servicer as additional compensation for servicing the Loans, and any payments
that were due on or prior to the applicable Cut-off Date, which shall be
remitted to the Originator).
(b) If the Servicer so directs, the institution maintaining the
Collection Account shall, in the name of the Indenture Trustee in its capacity
as such, invest the amounts in the Collection Account in Eligible Investments
that mature not later than one Business Day prior to the next succeeding Payment
Date. Once such funds are invested, such institution shall not change the
investment of such funds. All income and gain from such investments shall be
added to the Collection Account and distributed on such Payment Date pursuant to
Section 6.06(a). The Owner Trustee and the Indenture Trustee shall in no way be
liable for losses on amounts invested in accordance with the provisions hereof.
The Servicer shall deposit in the Collection Account an amount equal to any net
loss on such investments immediately as realized. Funds in the Collection
Account not so invested must be insured to the extent permitted by law by the
Federal Deposit Insurance Corporation.
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SECTION 5.06. Enforcement.
(a) The Servicer shall, consistent with customary servicing procedures
and the terms of this Agreement, act with respect to the Loans in such manner as
will maximize the receipt of principal and interest on such Loans and
Liquidation Proceeds with respect to Liquidated Loans.
(b) In accordance with the standard of care specified in Section 5.02,
the Servicer may, in its own name, if possible, or as agent for the Trust,
commence proceedings for the foreclosure of any real estate securing a Loan, or
may take such other steps that in the Servicer's reasonable judgment will
maximize Liquidation Proceeds with respect to the Loan, including, for example,
the sale of the Loan to a third party for foreclosure or enforcement and, in the
case of any default on a related prior mortgage loan, the advancing of funds to
correct such default and the advancing of funds to pay off a related prior
mortgage loan, which advances are Liquidation Expenses that will be reimbursed
to the Servicer out of related Liquidation Proceeds before the related Net
Liquidation Proceeds are deposited in the Collection Account. The Servicer shall
also deposit in the Collection Account any Net Liquidation Proceeds received in
connection with any Loan which became a Liquidated Loan in a prior Due Period.
(c) The Servicer may xxx to enforce or collect upon Loans, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to commence
a legal proceeding to enforce a Loan, the act of commencement shall be deemed to
be an automatic assignment of the Loan to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Loan on the ground that it is not a
real party in interest or a holder entitled to enforce the Loan, the Owner
Trustee on behalf of the Trust shall, at the Servicer's expense, take such steps
as the Servicer deems necessary to enforce the Loan, including bringing suit in
its name or the names of the Securityholders.
(d) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Loan in accordance with the Servicer's
usual practice. Without limitation of the foregoing, in exercising recourse
rights, the Servicer is authorized on behalf of the Trust to reassign the Loan
or to resell the related real property to the person against whom recourse
exists at the price set forth in the document creating the recourse.
(e) So long as the Originator is the Servicer, the Servicer may grant
to the Obligor on any Loan any rebate, refund or adjustment out of the
Collection Account that the Servicer in good faith believes is required because
of prepayment in full of the Loan. The Servicer will not permit any rescission
or cancellation of any Loan.
(f) So long as Conseco Finance Corp. is the Servicer, the Servicer may,
consistent with its customary servicing procedures and consistent with Section
5.02, grant to the Obligor on any Loan an extension of payments due under such
Loan, provided that Obligors may not be solicited for extensions and no more
than one extension of payments under a Loan may be granted in any twelve-month
period. The Servicer may not permit the extension of any payment beyond October
2029.
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(g) The Servicer shall enforce any due-on-sale clause in a Loan if such
enforcement is called for under its then current servicing policies for
obligations similar to the Loans, provided that such enforcement is permitted by
applicable law and will not adversely affect any applicable insurance policy. If
an assumption of a Loan is permitted by the Servicer, upon conveyance of the
related real property the Servicer shall use its best efforts to obtain an
assumption agreement in connection therewith.
(h) Any provision of this Agreement to the contrary notwithstanding,
the Servicer shall not agree to the modification or waiver of any provision of a
Loan, if such modification or waiver, when aggregated with all previous
modifications or waivers of the provisions of Loans, would cause any Notes to be
treated as having been exchanged for other Notes in a taxable exchange under
Section 1001 of the Code or any proposed, temporary or final Treasury
Regulations issued thereunder. The Servicer may not purchase any Loan from the
Trust other than pursuant to its obligation as Originator under Sections 3.05
and 5.17.
SECTION 5.07. Satisfaction of Loans.
Upon payment in full on any Loan, the Servicer will notify the Trust,
the Indenture Trustee and the Originator (if the Originator is not the Servicer)
on the next succeeding Payment Date by certification of a Servicing Officer
(which certification shall include a statement to the effect that all amounts
received in connection with such payments which are required to be deposited in
the Collection Account pursuant to Section 5.05 have been so deposited). The
Servicer is authorized to execute an instrument in satisfaction of such Loan and
to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the lien on the
related real property. The Servicer shall determine when a Loan has been paid in
full; to the extent that insufficient payments are received on a Loan credited
by the Servicer as prepaid or paid in full and satisfied, the shortfall shall be
paid by the Servicer out of its own funds.
SECTION 5.08. Costs and Expenses.
All costs and expenses incurred by the Servicer in carrying out its
duties hereunder, including all fees and expenses incurred in connection with
the enforcement of Loans (including enforcement of Defaulted Loans and
foreclosure of liens securing such Loans) shall be paid by the Servicer and the
Servicer shall not be entitled to reimbursement hereunder, except that the
Servicer shall be reimbursed out of the Liquidation Proceeds of a Liquidated
Loan for Liquidation Expenses incurred by it. The Servicer shall not incur such
Liquidation Expenses unless it determines in its good faith business judgment
that incurring such expenses will increase the Net Liquidation Proceeds on the
related Loan.
SECTION 5.09. Maintenance of Insurance.
(a) Except as otherwise provided in subsection (b) of this Section
5.09, the Servicer shall cause to be maintained with respect to each Loan,
hazard insurance (excluding flood insurance coverage) if such Loan is secured by
a first priority mortgage, deed of trust or security deed, issued by a company
authorized to issue such policies in the state in which the related real
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property is located and in an amount which is not less than the maximum
insurable value of such real property or the principal balance due from the
Obligor on the related Loan, whichever is less; provided, however, that the
amount of coverage provided by each insurance policy shall be sufficient to
avoid the application of any co-insurance clause contained therein; and
provided, further, that such insurance policies may provide for customary
deductible amounts. Each insurance policy caused to be maintained by the
Servicer shall contain a standard loss payee clause in favor of the Servicer and
its successors and assigns.
(b) The Servicer shall keep in force throughout the term of this
Agreement (i) a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement and (ii) a
fidelity bond. Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among Persons which service a
portfolio of retail installment sales contracts and home equity loan agreements
having an aggregate principal amount of $100,000,000 or more and which are
generally regarded as servicers acceptable to institutional investors.
SECTION 5.10. Deposit of Funds.
So long as the Originator is Servicer, any collections in respect of
Loans collected by the Originator shall, prior to the deposit thereof in the
Collection Account pursuant to Section 5.05, be held in bank accounts entitled
substantially as follows: "[name of depository], as agent for U.S. Bank Trust
National Association and other trustees and Conseco Finance Corp., as their
interests may appear."
SECTION 5.11. Monthly Reports; Certificate of Servicing Officer.
(a) No later than 1:00 p.m. (Minnesota time) on the Business Day
immediately following the Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee, the Paying Agent, the Originator (if the
Originator is not the Servicer) and the Rating Agencies a "Monthly Report,"
substantially in the form of Exhibit C hereto.
(b) Each Monthly Report pursuant to Section 5.11(a) shall be
accompanied by a certificate of a Servicing Officer substantially in the form of
Exhibit D, certifying the accuracy of the Monthly Report and that no Servicer
Termination Event or event that with notice or lapse of time or both would
become a Servicer Termination Event has occurred, or if such event has occurred
and is continuing, specifying the event and its status.
(c) The Originator and (if different from the Originator) the Servicer
shall, on request of the Owner Trustee, the Indenture Trustee, either of the
Rating Agencies or a Securityholder, furnish the Trust, the Indenture Trustee,
the Rating Agencies or a Securityholder such reasonably pertinent underlying
data as can be generated by the Servicer's existing data processing system
without undue modification.
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SECTION 5.12. Annual Report of Accountants.
On or before May 1 of each year, commencing May 1, 2000, the Servicer
at its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to make
available to the Trust, the Indenture Trustee, Standard & Poor's and Moody's a
report stating that such firm has examined selected documents and records
relating to the servicing of home improvement contracts and promissory notes and
home equity loans, including the Loans covered by this Agreement, in accordance
with the Mortgage Bankers Association of America's Uniform Single Attestation
Program for Mortgage Bankers, or any successor uniform program, and that, on the
basis of such examination, such servicing has been conducted in compliance with
the minimum servicing standards identified therein, except for such significant
exceptions or errors in records that, in the opinion of such firm, generally
accepted auditing standards requires it to report.
SECTION 5.13. Certain Duties of the Servicer Under the Trust
Agreement.
The Servicer shall, and hereby agrees that it will, monitor the Trust's
compliance with all applicable provisions of state and federal securities laws,
notify the Trust and the Administrator of any actions to be taken by the Trust
necessary for compliance with such laws and prepare on behalf of the Trust and
the Administrator all notices, filings or other documents or instruments
required to be filed under such laws.
SECTION 5.14. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, on or before March 31 (or 90 days after the end
of the Servicer's fiscal year, if other than December 31) of each year,
beginning on March 31, 2000, an officer's certificate signed by an authorized
officer of the Servicer, dated as of December 31 (or other applicable date) of
the immediately preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or such other period as shall
have elapsed from the Closing Date to the date of the first such certificate)
and of its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Originator or the Servicer shall deliver to the Owner Trustee,
the Indenture Trustee, the Servicer or the Originator (as applicable) and each
Rating Agency promptly after having obtained knowledge thereof, but in no event
later than 2 Business Days thereafter, written notice in an officer's
certificate of any event which with the giving of notice or lapse of time, or
both, would become a Servicer Termination Event under Section 7.01.
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SECTION 5.15. Maintenance of Lien Interests in Real Property.
(a) Consistent with the policies and procedures required by this
Agreement or as directed by the Owner Trustee, the Indenture Trustee or their
respective counsel, the Servicer shall take such steps as are necessary to
maintain perfection of the lien interest created by each Loan in the related
real property on behalf of the Trust, including but not limited to obtaining the
execution by the Obligors and the recording, registering, filing, re-recording,
re-filing, and re-registering of all security agreements, financing statements,
mortgages, deeds of trust, and continuation statements as are necessary to
maintain the security interest granted by the Obligors under the respective
Loans. In the event that the assignment of a Loan to the Trust is insufficient,
without a notation on the related real estate's certificate of title, or without
fulfilling any additional administrative requirements under the laws of the
state in which the real estate is located, to perfect a security interest in the
related real estate in favor of the Trust, the Servicer hereby agrees that the
Servicer's designation as the secured party on the certificate of title is in
its capacity as agent of the Trust.
(b) Upon the occurrence of a Servicer Termination Event, the Trust and
the Servicer shall take or cause to be taken such action as may, in the opinion
of the Owner Trustee, the Indenture Trustee, their respective counsel or counsel
to the Trust, be necessary to perfect or re-perfect the lien interests in the
real estate securing the Loans in the name of the Trust by amending the title
documents of real estate or by such other reasonable means as may, in the
opinion of the Owner Trustee, the Indenture Trustee, their respective counsel or
counsel to the Trust, be necessary or prudent. The Servicer hereby agrees to pay
all expenses related to such perfection or re-perfection and to take all action
necessary therefor.
SECTION 5.16. Covenants, Representations, and Warranties of Servicer.
By its execution and delivery of this Agreement, the Servicer makes the
following representations, warranties and covenants on which the Trust relies in
accepting the Loans and issuing the Notes and the Certificates and on which the
Indenture Trustee relies in authenticating the Notes and the Owner Trustee
relies in authenticating the Certificates.
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Servicer is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Servicer.
(b) Authorization; Binding Obligations. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and its Related
Documents and all of the transactions contemplated under this Agreement and
thereunder and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and its Related Documents.
When executed and delivered, this Agreement and its Related Documents will
constitute the legal, valid and binding obligations of the Servicer enforceable
in accordance
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with their terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by the availability of equitable
remedies.
(c) No Consent Required. The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses, approvals
and authorizations as have been obtained.
(d) No Violations. The execution, delivery and performance by the
Servicer of this Agreement and its Related Documents and the fulfillment of
their terms will not violate any provision of any existing law or regulation or
any order or decree of any court or the related Certificate of Incorporation or
Bylaws of the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party or by
which the Servicer may be bound.
(e) Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Agreement, the Related Documents, or the
Securities which, if adversely determined, would in the opinion of the Servicer
have a material adverse effect on the transactions contemplated by this
Agreement and Related Documents.
(f) Chief Executive Office. The chief executive office of the Servicer
is at 1100 Landmark Towers, 000 Xx. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx
00000-0000.
(g) No Default. The Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default would materially and
adversely affect its condition (financial or other) or operations or its
properties or the consequences of which would materially and adversely affect
its performance hereunder and under its other Related Documents. The Servicer is
not in default under any agreement involving financial obligations or on any
outstanding obligation which would materially adversely impact its financial
condition or operations or legal documents associated with the transaction
contemplated by this Agreement or the other Related Documents.
(h) Liens in Force. The real estate securing each Loan shall not be
released in whole or in part from the lien interest granted by the Loan, except
upon payment in full of the Loan or as otherwise contemplated herein.
(i) No Impairment. The Servicer shall do nothing to impair the rights
of the Trust, the Indenture Trustee or the Securityholders in the Loans or the
other Trust Property.
(j) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Loan, except in accordance with Section 5.06.
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SECTION 5.17. Purchase of Loans Upon Breach of Covenant.
Upon discovery by any of the Servicer, the Trust or the Indenture
Trustee of a breach of any of the covenants set forth in Section 5.15(a) or
5.16, the party discovering such breach shall give prompt written notice to the
others; provided, however, that the failure to give any such notice shall not
affect any obligation of the Servicer. Not later than the last day of the Due
Period that is 90 days after its discovery or receipt of notice of any breach of
any such covenant which materially and adversely affects the interests of the
Securityholders or the Trust in any Loan (including any Liquidated Loan), the
Servicer shall, unless it shall have cured such breach in all material respects,
purchase from the Trust the Loan affected by such breach and pay the related
Repurchase Price. It is understood and agreed that the obligation of the
Servicer to purchase any Loan (including any Liquidated Loan) with respect to
which such a breach has occurred and is continuing shall, if such obligation is
fulfilled, constitute the sole remedy against the Servicer for such breach
available to the Securityholders, the Trust or the Indenture Trustee on behalf
of the Noteholders; provided, however, that the Servicer shall indemnify the
Owner Trustee, the Trust, the Indenture Trustee and the Securityholders against
all costs, expenses, losses, damages, claims and liabilities, including
reasonable fees and expenses of counsel, which may be asserted against or
incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
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ARTICLE VI
DISTRIBUTIONS; TRUST ACCOUNTS; LIMITED GUARANTY;
STATEMENTS TO SECURITYHOLDERS
SECTION 6.01. Trust Accounts.
(a) The Servicer shall establish the Collection Account in the name of
the Indenture Trustee for the benefit of the Securityholders. The Collection
Account shall be an Eligible Account and initially shall be a segregated trust
account established with the Indenture Trustee and maintained with the Indenture
Trustee.
(b) The Servicer shall establish the Note Distribution Account in the
name of the Indenture Trustee for the benefit of the Noteholders. The Note
Distribution Account shall be an Eligible Account and initially shall be a
segregated trust account established with the Indenture Trustee and maintained
with the Indenture Trustee.
(c) The Servicer shall establish the Certificate Distribution Account
in the name of the Owner Trustee for the benefit of the Certificateholders. The
Certificate Distribution Account shall be an Eligible Account and initially
shall be a segregated trust account established with the Indenture Trustee and
maintained with the Indenture Trustee, so long as the Indenture Trustee is
acting as Paying Agent under Section 3.9 of the Trust Agreement.
(d) The Servicer shall establish the Pre-Funding Account on behalf of
the Trust, and shall deposit therein the Pre-Funded Amount pursuant to Section
2.02(j). The Pre-Funding Account shall be an Eligible Account and shall be a
segregated trust account established with the Indenture Trustee and maintained
with the Indenture Trustee.
(e) All amounts held in the Collection Account and the Pre-Funding
Account (but not the Note Distribution Account or the Certificate Distribution
Account) shall, to the extent permitted by applicable laws, rules and
regulations, be invested, as directed by the Servicer, in Eligible Investments
that mature not later than one Business Day prior to the Payment Date for the
Due Period to which such amounts relate. Any such written direction shall
certify that any such investment is authorized by this Section 6.01(e). Such
investments in Eligible Investments shall be made in the name of the Indenture
Trustee on behalf of the Trust, and such investments shall not be sold or
disposed of prior to their maturity. Any investment of funds in the Collection
Account or the Pre-Funding Account shall be made in Eligible Investments held by
a financial institution with respect to which (a) such institution has noted the
Indenture Trustee's interest therein by book entry or otherwise and (b) a
confirmation of the Indenture Trustee's interest has been sent to the Indenture
Trustee by such institution, provided that such Eligible Investments are (i)
specific certificated securities (as such term is used in MN UCC ss.
336.8-313(1)(d)(i)), and (ii) either (A) in the possession of such institution
or (B) in the possession of a clearing corporation (as such term is used in MN
UCC ss. 336.8-313(1)(g)) in New York or Minnesota, registered in the name of
such clearing corporation, not endorsed for collection or surrender or any other
purpose not involving transfer, not containing any evidence of a right or
interest inconsistent with the Indenture Trustee's security interest therein,
and held by such clearing
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corporation in an account of such institution. Subject to the other provisions
hereof, the Indenture Trustee shall have sole control over each such investment
and the income thereon, and any certificate or other instrument evidencing any
such investment, if any, shall be delivered directly to the Indenture Trustee or
its agent, together with each document of transfer, if any, necessary to
transfer title to such investment to the Indenture Trustee in a manner which
complies with this Section 6.01. All interest, dividends, gains upon sale and
other income from, or earnings on, investments of funds in the Collection
Account and the Pre-Funding Account shall be deposited in the Collection Account
and distributed on the next Payment Date pursuant to Section 6.06. The Servicer
shall deposit in the applicable Collection Account and the Pre-Funding Account,
as applicable, an amount equal to any net loss on such investments immediately
as realized.
SECTION 6.02. Collection Account Deposits.
(a) Collections. The Servicer shall remit directly to the Collection
Account (no later than the next Business Day as specified in Section 5.05) all
payments by or on behalf of the Obligors on the Loans and all Liquidation
Proceeds received by the Servicer.
(b) Repurchased Loans. The Originator shall deposit in the Collection
Account the Repurchase Price for each Loan repurchased by it under Section 3.05.
The Servicer shall deposit in the Collection Account the Repurchase Price for
each Loan repurchased by it under Section 5.17.
SECTION 6.03. Permitted Withdrawals.
The Indenture Trustee may, from time to time as provided herein, make
withdrawals from the Collection Account of amounts deposited in said account
that are attributable to the Loans only for the following purposes:
(a) to make payments in the amounts and in the manner provided
for in Section 6.06;
(b) to pay to the Originator with respect to each Loan or
property acquired in respect thereof that has been repurchased pursuant
to Section 3.05, all amounts received thereon and not required to be
distributed to Noteholders or Certificateholders as of the date on
which the related Scheduled Principal Balance or Repurchase Price is
determined;
(c) to reimburse the Servicer out of Liquidation Proceeds for
Liquidation Expenses incurred by it, to the extent such reimbursement
is permitted pursuant to Section 5.08;
(d) to withdraw any amount deposited in the Collection Account
that was not required to be deposited therein; or
(e) to make any rebates or adjustments deemed necessary by the
Servicer pursuant to Section 5.06(e).
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Since, in connection with withdrawals pursuant to clauses (a) and (b),
the Originator's or the Servicer's entitlement thereto is limited to collections
or other recoveries on the related Loan, the Servicer shall keep and maintain a
separate accounting, on a Loan by Loan basis, for the purpose of justifying any
withdrawal from the Collection Account pursuant to such clauses.
SECTION 6.04. Advances.
(a) Not later than one Business Day following the Determination Date,
the Servicer shall advance all Delinquent Payments for the immediately preceding
Due Period by depositing the aggregate amount of such Delinquent Payments in the
Collection Account; provided, however, that the Servicer shall be obligated to
advance Delinquent Payments only to the extent that the Servicer, in its sole
discretion, expects to be able to recover such Advances from funds subsequently
available therefor in the Collection Account in accordance with Section 6.06(a).
If the Servicer fails to advance all Delinquent Payments required under this
Section 6.04, the Indenture Trustee shall be obligated to advance such
Delinquent Payments pursuant to Section 6.15 of the Indenture.
(b) The Servicer and the Indenture Trustee shall be entitled to
reimbursement of an Advance from subsequent funds available therefor in the
Collection Account in accordance with Section 6.06(a).
SECTION 6.05. Limited Guaranty.
(a) No later than the Determination Date prior to each Payment Date,
the Servicer (if other than the Guarantor) shall notify the Guarantor of the
amount of the Guaranty Payment (if any) for such Payment Date. Not later than
the Business Day preceding each Payment Date, the Guarantor shall deposit the
Guaranty Payment, if any, for such Payment Date into the Collection Account.
(b) The obligations of the Guarantor under this Section shall not
terminate upon or otherwise be affected by a Service Transfer pursuant to
Article VII of this Agreement.
(c) The obligation of the Guarantor to provide the Limited Guaranty
under this Agreement shall terminate on the later of the Final Scheduled Payment
Date and the date the Guarantor has made all Guaranty Payments required to be
made by it.
(d) The obligation of the Guarantor to make the Guaranty Payments
described in subsection (a) above shall be unconditional and irrevocable. The
Guarantor acknowledges that its obligation to make the Guaranty Payments
described in subsection (a) above shall be deemed a guaranty by the Guarantor of
that portion of the Obligors' obligations under the Loans that is allocable to
the Class B-2 Certificateholders.
(e) If the Guarantor fails to make a Guaranty Payment in whole or in
part, the Seller shall promptly notify the Owner Trustee, and the Owner Trustee
shall promptly notify the Rating Agencies.
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SECTION 6.06. Distributions.
(a) On each Payment Date, the Servicer shall instruct the Indenture
Trustee (based on the information contained in the Monthly Report delivered
pursuant to Section 5.14) to make the following deposits and distributions by
11:00 a.m. (Minnesota time), to the extent of the Amount Available for such
Payment Date and in the following order of priority, provided that any Guaranty
Payment shall be distributed solely to the Class B-2 Certificateholders:
(i) Servicing Fee. If Conseco Finance Corp. or an Affiliate is
not the Servicer, then to the Servicer, the Monthly Servicing Fee for
the related Due Period (not to exceed 1/12 of 0.75% of the Pool
Scheduled Principal Balance);
(ii) Class A Interest. After payment of the amounts specified
in clause (i) above, to the Note Distribution Account, the Class A
Formula Interest Distribution Amount;
(iii) Class M-1 Interest. After payment of the amounts
specified in clauses (i) and (ii) above, to the Note Distribution
Account, the Class M-1 Formula Interest Distribution Amount;
(iv) Class M-2 Interest. After payment of the amounts
specified in clauses (i) through (iii) above, to the Note Distribution
Account, the Class M-2 Formula Interest Distribution Amount;
(v) Class B-1 Interest. After payment of the amounts specified
in clauses (i) through (iv) above, to the Certificate Distribution
Account, the Class B-1 Formula Interest Distribution Amount;
(vi) Class A Principal Distribution Amount. After payment of
the amounts specified in clauses (i) through (v) above, to the Note
Distribution Account, the Class A Principal Distribution Amount;
(vii) Class M-1 Principal. After payment of the amounts
specified in clauses (i) through (vi) above, to the Note Distribution
Account, the Class M-1 Formula Principal Distribution Amount;
(viii) Class M-2 Principal. After payment of the amounts
specified in clauses (i) through (vii) above, to the Note Distribution
Account, the Class M-2 Formula Principal Distribution Amount;
(ix) Class B-1 Principal. After payment of the amounts
specified in clauses (i) through (viii) above, to the Certificate
Distribution Account, the Class B-1 Formula Principal Distribution
Amount;
(x) Liquidation Loss Interest. After payment of the amounts
specified in clauses (i) through (ix) above,
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(A) to the Note Distribution Account, the Class M-1
Formula Liquidation Loss Interest Distribution Amount; then
(B) to the Note Distribution Account, the Class M-2
Formula Liquidation Loss Interest Distribution Amount; then
(C) to the Certificate Distribution Account, the
Class B-1 Formula Liquidation Loss Interest Distribution
Amount;
(xi) Liquidation Loss Principal. After payment of the amounts
specified in clauses (i) through (x) above,
(A) to the Note Distribution Account, the Class M-1
Liquidation Loss Principal Amount; then
(B) to the Note Distribution Account, the Class M-2
Liquidation Loss Principal Amount; then
(C) to the Certificate Distribution Account, the
Class B-1 Liquidation Loss Principal Amount;
(xii) Class B-2 Interest. After payment of the amounts
specified in clauses (i) through (xi) above, to the Certificate
Distribution Account,
(A) the Class B-2 Interest Amount, then
(B) any Unpaid Class B-2 Interest Shortfall, then
(C) the Class B-2 Formula Liquidation Loss Interest
Distribution Amount;
(xiii) Class B-2 Principal. After payment of the amounts
specified in clauses (i) through (xii) above, to the Certificate
Distribution Account,
(A) the Class B-2 Formula Principal Distribution
Amount, then
(B) any unpaid Class B-2 Liquidation Loss Principal
Amount;
(xiv) Monthly Servicing Fee. After payment of the amounts
specified in clauses (i) through (xiii) above, to Conseco Finance
Corp., if it is the Servicer, the Monthly Servicing Fee;
(xv) Unreimbursed Advances. After payment of the amounts
specified in clauses (i) through (xiv) above, to reimburse the Servicer
or the Indenture Trustee, as applicable, for any unreimbursed Advances
made with respect to the Loans in respect of
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current or prior Payment Dates pursuant to Section 6.04 of this Sale
and Servicing Agreement and Section 6.15 of the Indenture;
(xvi) Additional Principal Distribution Amount. After payment
of the amounts specified in clauses (i) through (xv) above, to the Note
Distribution Account and the Certificate Distribution Account for
distribution to each outstanding Class of Securities, pro rata based on
the Principal Balance of each such Class, the Additional Principal
Distribution Amount;
(xvii) Guaranty Fee. After payment of the amounts specified in
clauses (i) through (xvi) above, to pay the Class B-2 Guaranty Fee to
the Guarantor; and
(xviii) Class C Certificate Distribution Amount. After payment
of the amounts specified in clauses (i) through (xvii) above, to the
Certificate Distribution Account, the remaining Amount Available for
the benefit of the Class C Certificateholder.
(b) Guaranty Payments. On each Payment Date the Servicer shall instruct
the Indenture Trustee to distribute to the Certificate Distribution Account for
the benefit of the Class B-2 Certificateholders any Guaranty Payment deposited
in the Collection Account pursuant to Section 6.05.
SECTION 6.07. Statements to Securityholders.
(a) On each Payment Date, the Indenture Trustee shall include with each
distribution to each Noteholder, and the Paying Agent shall include with each
distribution to each Certificateholder (with a copy to the Owner Trustee), a
statement (which statement shall also be provided to each Rating Agency) based
on information in the Monthly Report delivered on the related Determination Date
pursuant to Section 5.11, setting forth the following information:
(i) the amount of such distribution to Holders of each Class
of Notes and Certificates allocable to interest, separately identifying
any Unpaid Class A-1 Interest Shortfall, Unpaid Class A-2 Interest
Shortfall, Unpaid Class A-3 Interest Shortfall, Unpaid Class A-4
Interest Shortfall, Unpaid Class A-5 Interest Shortfall, Unpaid Class
A-6 Interest Shortfall, Unpaid Class M-1 Interest Shortfall, Unpaid
Class M-2 Interest Shortfall, Unpaid Class B-1 Interest Shortfall and
Unpaid Class B-2 Interest Shortfall included in such distribution and
any remaining Unpaid Class A-1 Interest Shortfall, Unpaid Class A-2
Interest Shortfall, Unpaid Class A-3 Interest Shortfall, Unpaid Class
A-4 Interest Shortfall, Unpaid Class A-5 Interest Shortfall, Unpaid
Class A-6 Interest Shortfall, Unpaid Class M-1 Interest Shortfall,
Unpaid Class M-2 Interest Shortfall, Unpaid Class B-1 Interest
Shortfall and Unpaid Class B-2 Interest Shortfall;
(ii) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover
Shortfall, the Class A-4 Interest Carryover Shortfall, the Class A-5
Interest Carryover Shortfall, the Class A-6 Interest Carryover
Shortfall, the Class M-1 Interest Carryover Shortfall, the Class M-2
Interest
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Carryover Shortfall, the Class B-1 Interest Carryover Shortfall and the
Class B-2 Interest Carryover Shortfall, if any, for such Payment Date;
(iii) the amount of such distribution to Holders of each Class
of Securities allocable to principal, separately identifying the
Formula Principal Distribution Amount, and the amount, if any, by which
the Class A, Class M-1, Class M-2, Class B-1 and Class B-2 Principal
Distribution Amounts, respectively, exceed the respective Class A,
Class M-1, Class M-2, Class B-1 and Class B-2 Formula Principal
Distribution Amounts;
(iv) the Class A-1 Principal Balance, the Class A-2 Principal
Balance, the Class A-3 Principal Balance, the Class A-4 Principal
Balance, the Class A-5 Principal Balance, the Class A-6 Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal
Balance, the Class B-1 Principal Balance and the Class B-2 Principal
Balance after giving effect to the distribution of principal on such
Payment Date;
(v) the amount, if any, of the Guaranty Payment on such
Payment Date;
(vi) the amount of the Monthly Servicing Fee with respect to
the immediately preceding Due Period;
(vii) the Class C Certificate Distribution Amount (if any);
(viii) the Pool Scheduled Principal Balance, the
Over-Collateralization Amount and the Pre-Funded Amount for such
Payment Date;
(ix) the Note Pool Factor or Certificate Pool Factor, as
applicable, for each Class after giving effect to the distribution of
principal on such Payment Date;
(x) the number and aggregate principal balances of Loans
delinquent (a) 30-59 days, (b) 60-89 days, and (c) 90 or more days;
(xi) the number and aggregate Scheduled Principal Balance of
Loans that became Defaulted Loans during the immediately preceding Due
Period;
(xii) the number and aggregate Scheduled Principal Balance of
Defaulted Loans as of the last day of the immediately preceding Due
Period;
(xiii) the number and aggregate Scheduled Principal Balance of
Loans that became Liquidated Loans during the immediately preceding Due
Period and the related Net Liquidation Losses;
(xiv) the number and aggregate principal balance of Loans (x)
in foreclosure, (y) as to which foreclosure of the related real
property lien was completed during the related Due Period, exclusive of
any such Loans that are Liquidated Loans and (z) foreclosed upon and in
the Servicer's inventory ; and
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(xv) information relating to the satisfaction or
non-satisfaction of the the Class M-1 Distribution Test, Class M-2
Distribution Test, Class B-1 Distribution Test and
Class B-2 Distribution Test.
In the case of information furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount per $1,000
denomination of Security.
(b) The Indenture Trustee shall inform any of the Noteholders,
Certificateholders, Underwriter or Rating Agencies inquiring by telephone of the
information contained in the most recent Monthly Report.
(c) Certificateholders may obtain copies of the statements delivered by
the Owner Trustee pursuant to subsection (a) above upon written request to the
Owner Trustee at the Corporate Trust Office (together with a certification that
such Person is a Certificateholder and payment of any expenses associated with
the distribution thereof). Noteholders may obtain copies of the statements
delivered by the Indenture Trustee pursuant to subsection (a) above upon written
request to the Indenture Trustee at its Corporate Trust Office (together with a
certification that such Person is a Noteholder and payment of any expenses
associated with the distribution thereof).
SECTION 6.08. Pre-Funding Account.
(a) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Indenture Trustee on any Subsequent Transfer Date an amount equal to 100% of
the Cut-off Date Principal Balance of each Subsequent Loan transferred and
assigned to the Indenture Trustee on such Subsequent Transfer Date and pay such
amount to or upon the order of the Originator upon satisfaction of the
conditions set forth in Section 2.03(b) with respect to such transfer and
assignment. On the Post-Funding Payment date, any funds remaining in the
Pre-Funding Account (other than funds consisting of investment earnings) shall
be deposited in the Collection Account and added to the Amount Available.
(b) The Owner Trustee on behalf of the Trust shall be the legal owner
of the Pre-Funding Account. The Seller shall be the beneficial owner of the
Pre-Funding Account, subject to the foregoing power of the Indenture Trustee to
transfer amounts in the Pre-Funding Account to the Collection Account. All
amounts earned on deposits in the Pre-Funding Account shall be taxable to the
Seller. The Trustee shall release to the Seller all investment earnings in the
Pre-Funding Account on the Post-Funding Payment Date.
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ARTICLE VII
SERVICE TRANSFER
SECTION 7.01. Events of Termination.
(a) "Event of Termination" means the occurrence of any of the following
(each a "Servicer Termination Event"):
(i) Any failure by the Servicer to make any payment or deposit
required to be made hereunder (including an Advance) and the
continuance of such failure for a period of five Business Days;
(ii) Failure on the Servicer's part to observe or perform in
any material respect any covenant or agreement in this Agreement (other
than a covenant or agreement which is elsewhere in this Section
specifically dealt with) which continues unremedied for 30 days;
(iii) Any assignment by the Servicer of its duties or rights
hereunder except as specifically permitted hereunder, or any attempt to
make such an assignment;
(iv) A court having jurisdiction in the premises shall have
entered a decree or order for relief in respect of the Servicer in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Servicer, as the case may be, or for any substantial
liquidation of its affairs;
(v) The Servicer shall have commenced a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have consented to the entry of an order
for relief in an involuntary case under any such law, or shall have
consented to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian or sequestrator (or other
similar official) of the Servicer or for any substantial part of its
property, or shall have made any general assignment for the benefit of
its creditors, or shall have failed to, or admitted in writing its
inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or
(vi) The failure of the Servicer to be an Eligible Servicer.
(b) The Servicer shall not resign from the obligations and duties
hereby imposed on it, except upon determination that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Servicer so causing such a conflict being of a type and nature carried on
by the Servicer at the date of this Agreement. Any such determination permitting
the resignation of the Servicer shall be evidenced by an opinion of counsel
acceptable to the
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Indenture Trustee at the expense of the Servicer to such effect which shall be
delivered to the Indenture Trustee.
(c) Notwithstanding any other provision in this Agreement, no removal
or resignation of the Servicer shall become effective until the Indenture
Trustee or a successor Servicer shall have assumed the Servicer's
responsibilities and obligations in accordance with this Section.
(d) Upon removal or resignation of the Servicer, or expiration of its
Term of Service without renewal, the Servicer at its own expense also shall
promptly deliver or cause to be delivered to a successor servicer or the
Indenture Trustee all the books and records (including, without limitation,
records kept in electronic form) that the Servicer has maintained for the Loans,
including all tax bills, assessment notices, insurance premium notices and all
other documents as well as all original documents then in the Servicer's
possession.
(e) Any collections then being held by the Servicer prior to its
removal and any collections received by the Servicer after removal or
resignation shall be endorsed by it to the Indenture Trustee and remitted
directly and immediately to the Indenture Trustee or the successor Servicer.
(f) Upon removal or resignation of the Servicer, or expiration of its
Term of Service without renewal, the Indenture Trustee shall (i) solicit bids
for a successor servicer as described below or (ii) appoint the Backup Servicer
as Servicer. If the Indenture Trustee solicits bids for a successor Servicer,
the Indenture Trustee agrees to act as Backup Servicer during the solicitation
process and shall assume all duties of the Servicer (except as otherwise
provided in this Agreement). The Indenture Trustee shall, if it is unable to
obtain a qualifying bid and is prevented by law from acting as Servicer,
appoint, or petition a court of competent jurisdiction to appoint, any housing
and home finance institution, bank or mortgage servicing institution which has
been designated as an approved seller-servicer by Xxxxxx Xxx or Xxxxxxx Mac for
first and second lien home equity loans and having equity of not less than
$15,000,000, as determined in accordance with generally accepted accounting
principles, as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. The compensation of any successor Servicer (other than the Indenture
Trustee in its capacity as successor Servicer) so appointed shall be the Monthly
Servicing Fee, provided, however, that if the Indenture Trustee becomes the
successor Servicer it shall receive as its compensation the same compensation
paid to the Servicer immediately prior to the Servicer's removal or resignation.
SECTION 7.02. Transfer. If an Event of Termination has occurred and is
continuing, either the Indenture Trustee or Securityholders, in the aggregate,
representing 25% or more of the aggregate Principal Balance of the Securities,
by notice in writing to the Servicer (and to the Indenture Trustee if given by
the Securityholders) may terminate all (but not less than all) of the Servicer's
management, administrative, servicing and collection functions (such termination
being herein called a "Service Transfer"). On receipt of such notice (or, if
later, on a date designated therein), all authority and power of the Servicer
under this Agreement, whether with respect to the Loans, the Loan Files or
otherwise (except with respect to the Collection Account, the transfer of which
shall be governed by Section 7.06), shall pass to and be vested in the
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Indenture Trustee pursuant to and under this Section 7.02; and, without
limitation, the Indenture Trustee is authorized and empowered to execute and
deliver on behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do any and all acts or things necessary
or appropriate to effect the purposes of such notice of termination. The
Indenture Trustee shall cause all assignments of mortgages, deeds of trust or
security deeds securing the Loans to be duly recorded. Each of the Originator
and the Servicer agrees to cooperate with the Indenture Trustee in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the transfer to the Indenture Trustee for
administration by it of all cash amounts which shall at the time be held by the
Servicer for deposit, or have been deposited by the Servicer, in the Collection
Account, or for its own account in connection with its services hereafter or
thereafter received with respect to the Loans. The Servicer shall transfer at
its own expense to the new servicer (i) the Servicer's records relating to the
Loans in such electronic form as the new servicer may reasonably request and
(ii) any Loan Files in the Servicer's possession.
SECTION 7.03. Indenture Trustee to Act; Appointment of Successor. On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.02, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that (i) the Indenture Trustee will not assume any
obligations of the Originator pursuant to Section 3.05, and (ii) the Indenture
Trustee shall not be liable for any acts or omissions of the Servicer occurring
prior to such Service Transfer or for any breach by the Servicer of any of its
obligations contained herein or in any related document or agreement. As
compensation therefor, the Indenture Trustee shall be entitled to receive
reasonable compensation out of the Monthly Servicing Fee but not in excess of
the Monthly Servicing Fee. Notwithstanding the above, the Indenture Trustee may,
if it shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint, or petition a court of competent jurisdiction to appoint, an Eligible
Servicer as the successor to the Servicer hereunder in the assumption of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Pending appointment of a successor to the Servicer hereunder, unless
the Indenture Trustee is prohibited by law from so acting, the Indenture Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Indenture Trustee may make such arrangements for
the compensation of such successor out of payments on Loans as it and such
successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Securityholders, exceed the
Monthly Servicing Fee. The Indenture Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 7.04. Notification to Securityholders.
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Owner Trustee, the Indenture
Trustee, the Rating Agencies and the Obligors, to the extent required by law.
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(b) Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Owner Trustee on
behalf of the Trust shall give written notice thereof to the Rating Agencies,
and the Certificateholders at their respective addresses appearing on the
Certificate Register and the Indenture Trustee shall give written notice thereof
to Noteholders at their respective addresses appearing in the Note Register.
(c) The Owner Trustee on behalf of the Trust shall give written notice
to the Rating Agencies at least 30 days prior to the date upon which any
Eligible Servicer (other than the Indenture Trustee) is to assume the
responsibilities of Servicer pursuant to Section 7.03, naming such successor
Servicer.
SECTION 7.05. Effect of Transfer.
(a) After the Service Transfer, the Indenture Trustee or new Servicer
may notify Obligors to make payments directly to the new Servicer that are due
under the Loans after the effective date of the Service Transfer.
(b) After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Loans and the new Servicer shall have all of such obligations,
except that the replaced Servicer will transmit or cause to be transmitted
directly to the new Servicer for its own account, promptly on receipt and in the
same form in which received, any amounts (properly endorsed where required for
the new Servicer to collect them) received as payments upon or otherwise in
connection with the Loans.
(c) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Originator pursuant to Article IX and Sections 3.05 and 5.17) other than
those relating to the management, administration, servicing or collection of the
Loans.
SECTION 7.06. Transfer of Collection Account.
Notwithstanding the provisions of Section 7.02, if the Collection
Account shall be maintained with the Servicer and an Event of Termination shall
occur and be continuing, the Servicer shall, after five days' written notice
from the Indenture Trustee, or in any event within ten days after the occurrence
of the Event of Termination, establish an Eligible Account with an institution
other than the Servicer and promptly transfer all funds in the Collection
Account to such new account, which shall thereafter be deemed the Collection
Account for the purposes hereof.
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ARTICLE VIII
TERMINATION
SECTION 8.01. Class C Certificateholder's Purchase Option; Auction
Sale; Additional Principal Distribution Amount.
(a) The Class C Certificateholder shall, subject to subsection (b)
hereof, have the option to purchase all of the Loans and all property acquired
in respect of any Loan remaining in the Trust at a price (such price being
referred to as the "Minimum Purchase Price") equal to the greater of:
(i) the sum of (x) 100% of the principal balance of each Loan
(other than any Loan as to which title to the underlying property has
been acquired and whose fair market value is included pursuant to
clause (y) below), together with accrued and unpaid interest on each
such Loan at a rate per annum equal to the Weighted Average Interest
Rate, plus (y) the fair market value of such acquired property (as
reasonably determined by the Servicer as of the close of business on
the third Business Day preceding the date of such purchase), and
(ii) the aggregate Principal Balance of the Securities as of
the date of such purchase (less any amounts on deposit in the
Collection Account, the Note Distribution Account or the Certificate
Distribution Account on such purchase date and representing payments of
principal in respect of the Loans) plus an amount necessary to pay the
Class A Formula Interest Distribution Amount, the Class M-1 Formula
Interest Distribution Amount, the Class M-1 Formula Liquidation Loss
Interest Distribution Amount, the Class M-2 Formula Interest
Distribution Amount, the Class M-2 Formula Liquidation Loss Interest
Distribution Amount, the Class B-1 Formula Interest Distribution
Amount, the Class B-1 Formula Interest Distribution Amount, the Class
B-2 Formula Interest Distribution Amount and the Class B-2 Formula
Liquidation Loss Interest Amount due on the Payment Date occurring in
the calendar month following such purchase date (less any amounts on
deposit in the Collection Account, the Note Distribution Account or the
Certificate Account on such purchase date and representing payments of
interest in respect of the Loans at a rate per annum equal to the
Weighted Average Interest Rate).
(b) The purchase by the Class C Certificateholder of all of the Loans
pursuant to this Section 8.01 shall be conditioned upon:
(i) the Pool Scheduled Principal Balance, at the time of any
such purchase, aggregating not more than 20% of the Cut-off Date Pool
Principal Balance,
(ii) the Class C Certificateholder having provided the
Indenture Trustee, the Owner Trustee and the Depository (if any) with
at least 30 days' written notice, and
(iii) the Indenture Trustee not having accepted a qualifying
bid for the Loans pursuant to subsection (e) below.
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(c) The Class C Certificateholder may assign its rights under this
Section 8.01, separately from its other rights as Holder of the Class C
Certificate, by giving written notice of such assignment to the Trustee.
Following the Trustee's receipt of such notice of assignment, the Trustee shall
recognize only such assignee (or its assignee in turn) as the Person entitled to
exercise the purchase option set forth in Section 8.01(a).
(d) The Servicer shall notify the Indenture Trustee and the Class C
Certificateholder (whether or not the Class C Certificateholder has then
assigned its rights under this Section 8.01 pursuant to subsection (c)) no later
than two Business Days after the Determination Date relating to the first Due
Period which includes the date on which the Pool Scheduled Principal Balance
first becomes equal to or less than 20% of the Cut-off Date Pool Principal
Balance, to the effect that the Pool Scheduled Principal Balance is then equal
to or less than 20% of the Cut-off Date Pool Principal Balance.
(e) If the Class C Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option required
by subsection (b) by the Payment Date occurring in the month following the
Determination Date specified in subsection (d), then promptly after the
following Payment Date the Indenture Trustee shall begin a process for
soliciting bids in connection with an auction for the Loans. The Indenture
Trustee shall provide the Class C Certificateholder (or its assignee) written
notice of such auction at least 10 Business Days prior to the date bids must be
received in such auction (the "Auction Date").
If at least two bids are received, the Indenture Trustee shall solicit
and resolicit new bids from all participating bidders until only one bid remains
or the remaining bidders decline to resubmit bids. The Indenture Trustee shall
accept the highest of such remaining bids if it is equal to or in excess of the
greater of (i) the Minimum Purchase Price and (ii) the fair market value of the
Loans and related property (such amount being referred to as the "Minimum
Auction Price"). If less than two bids are received or the highest bid after the
resolicitation process is completed is not equal to or in excess of the Minimum
Auction Price, the Indenture Trustee shall not consummate such sale. If a bid
meeting the Minimum Purchase Price is received, then the Indenture Trustee may,
and if so requested by the Class C Certificateholder shall, consult with a
financial advisor, which may be an underwriter of the Securities, to determine
if the fair market value of the Loans and related property has been offered.
If the first auction conducted by the Indenture Trustee does not
produce any bid at least equal to the Minimum Auction Price, then the Indenture
Trustee shall, beginning on the Payment Date occurring approximately three
months after the Auction Date for the failed first auction, commence another
auction in accordance with the requirements of this subsection (e). If such
second auction does not produce any bid at least equal to the Minimum Auction
Price, then the Indenture Trustee shall, beginning on the Payment Date occurring
approximately three months after the Auction Date for the failed second auction,
commence another auction in accordance with the requirements of this subsection
(e), and shall continue to conduct similar auctions approximately every three
months thereafter until the earliest of (i) delivery by the Class C
Certificateholder or its assignee of notice of exercise of its purchase option
under subsection (a), (ii) receipt by the Indenture Trustee of a bid meeting the
conditions specified in the preceding
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paragraph, or (iii) the Payment Date on which the principal balance of all the
Loans is reduced to zero.
If the Indenture Trustee receives a bid meeting the conditions
specified in this subsection (e), then the Indenture Trustee shall release to
the winning bidder, upon payment of the bid purchase price, the Loan Files
pertaining to the Loans being purchased.
(f) If the Class C Certificateholder (or its assignee) has not
delivered to the Indenture Trustee the notice of exercise of its purchase option
required by subsection (b) by the Payment Date occurring in the month following
the Determination Date specified in subsection (d), then on the following
Payment Date and each Payment Date thereafter the Class A Notes, the Class M-1
Notes, the Class M-2 Notes, the Class B-1 Certificates and the Class B-2
Certificates shall be entitled to receive the Additional Principal Distribution
Amount, allocated among such Classes pro rata based upon the outstanding
Principal Balance of each such Class on each such Payment Date.
SECTION 8.02. Liquidation of Trust Estate.
Upon any sale of the assets of the Trust pursuant to Section 10.01 of
the Indenture or Section 9.1 of the Trust Agreement, the Trust shall instruct
the Indenture Trustee or the Owner Trustee, as the case may be, to deposit the
proceeds from such sale after all payments and reserves therefrom have been made
in the Collection Account. On the Payment Date on which such proceeds are
deposited in the Collection Account (or, if such proceeds are not so deposited
on a Payment Date, on the Payment Date immediately following such deposit), the
Trust shall instruct the Indenture Trustee to distribute such funds, together
with all other amounts available, in accordance with the terms of Section
6.06(a).
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ARTICLE IX
INDEMNITIES
SECTION 9.01. Originator's Indemnities.
The Originator will defend and indemnify the Trust, the Owner Trustee,
the Indenture Trustee (including the paying agent and any other agents of the
Owner Trustee and the Indenture Trustee) and the Securityholders against any and
all costs, expenses, losses, damages, taxes, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation of any
third-party claims arising out of or resulting from (i) the origination of any
Loan (including but not limited to truth in lending requirements) or the
servicing of such Loan prior to its transfer to the Trust (but only to the
extent such cost, expense, loss, damage, tax, claim or liability is not provided
for by the Originator's repurchase of such Loan pursuant to Section 3.05), (ii)
the use or ownership of any real property related to a Loan by the Originator or
the Servicer or any Affiliate of either, or (iii) the Originator's or the
Trust's violation of federal or state securities laws in connection with the
offering and sale of the Securities. Notwithstanding any other provision of this
Agreement, the obligation of the Originator under this Section shall not
terminate upon a Service Transfer pursuant to Article VII, except that the
obligation of the Originator under this Section shall not relate to the actions
of any subsequent Servicer after a Service Transfer.
SECTION 9.02. Liabilities to Obligors.
No obligation or liability to any Obligor under any of the Loans is
intended to be assumed by the Trust, the Owner Trustee, the Indenture Trustee or
the Securityholders under or as a result of this Agreement and the transactions
contemplated hereby and, to the maximum extent permitted and valid under
mandatory provisions of law, the Trust, the Owner Trustee, the Indenture Trustee
and the Securityholders expressly disclaim such assumption.
SECTION 9.03. Servicer's Indemnities.
The Servicer shall defend and indemnify the Trust, the Owner Trustee,
the Indenture Trustee (including the Paying Agent and any other agents of the
Owner Trustee and the Indenture Trustee) and the Securityholders against any and
all costs, expenses, losses, damages, taxes, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, in respect
of any action taken or omitted to be taken by the Servicer with respect to any
Loan. This indemnity shall survive any Service Transfer (but the original
Servicer's obligations under this Section 9.03 shall not relate to any actions
of any subsequent Servicer after a Service Transfer) and any payment of the
amount owing under, or any repurchase by the Originator of, any such Loan.
SECTION 9.04. Operation of Indemnities.
Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Originator or the Servicer has made any
9-1
indemnity payments pursuant to this Article and the recipient thereafter
collects any of such amounts from others, the recipient will repay such amounts
collected to the Originator or the Servicer, as the case may be, without
interest.
9-2
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Servicer Not to Assign Duties or Resign; Delegation of
Servicing Duties.
The Servicer may not sell or assign its rights and duties as Servicer
hereunder, except as expressly provided for herein, provided that the Servicer
may pledge or assign the right to receive all or any portion of the Monthly
Servicing Fee payable to it. The Servicer shall not resign from the obligations
and duties hereby imposed on it except upon determination that the performance
of its duties hereunder is no longer permissible under applicable law or is in
material conflict by reason of applicable law with any other activities carried
on by it. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel for the Servicer to such effect
addressed and delivered to the Trust and the Indenture Trustee. No such
resignation shall become effective until the Indenture Trustee or a successor
servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with Sections 7.03.
Notwithstanding the foregoing:
(a) Any person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Servicer shall be a party, or any Person
succeeding to the business of the Servicer, shall be the successor of
the Servicer hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to the Servicer shall satisfy the
criteria set forth in the definition of Eligible Servicer. The Servicer
shall promptly notify Standard & Poor's and Moody's of any such merger
to which it is a party.
(b) The Servicer may delegate duties under this Agreement to
any of the Servicer's Affiliates. In addition, the Servicer may at any
time perform the specific duty of foreclosing real property liens
through subcontractors who are in the business of servicing home
improvement contracts and promissory notes or home equity loans, and
may also perform other specific duties through subcontractors; provided
that the Servicer gives notice to the Trust and the Indenture Trustee
and each of Standard & Poor's and Moody's, and provided further that no
such delegation of duties by the Servicer shall relieve the Servicer of
its responsibility with respect thereto.
SECTION 10.02. Assignment or Delegation by Originator.
Except as specifically authorized hereunder, the Originator may not
convey and assign or delegate any of its rights or obligations hereunder absent
the prior written consent of a Note Majority of each Class of Notes and a
Certificate Majority of each Class of Certificates, and any attempt to do so
without such consent shall be void. It is understood that the foregoing does not
10-1
prohibit the pledge or assignment by the Originator of any right to payment
pursuant to Article VI.
Notwithstanding the foregoing, any person into which the Originator may
be merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Originator shall be a party, or any
Person succeeding to the business of the Originator, shall be the successor of
the Originator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Originator shall promptly notify Standard & Poor's
and Moody's of any such merger to which it is a party.
SECTION 10.03. Amendment.
(a) This Agreement may be amended from time to time by the Originator,
the Servicer, the Seller and the Trust, with the prior written consent of the
Indenture Trustee but without the consent of any of the Securityholders, to
correct manifest error, to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, as
the case may be, including, without limitation, to add or amend any provision as
required by Standard & Poor's, Moody's, or any other nationally recognized
statistical rating organization in order to improve or maintain the rating of
any Class of Notes or Class of Certificates, provided, however, that such action
shall not, as evidenced by an Opinion of Counsel for the Originator, adversely
affect in any material respect the interests of any Securityholder.
(b) This Agreement may also be amended from time to time by the
Originator, the Servicer, the Seller and the Trust with the prior written
consent of the Indenture Trustee and with the consent of the Holders of
Securities representing a majority of the aggregate Outstanding Amount of the
Securities (which consent of any Holder of a Security given pursuant to this
Section or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders of such Security and of any
Security issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Security) for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement, or of modifying in any manner the
rights of the Holders of Securities; provided, however, no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Loans or distributions required to be made
on any Security or the Class A-1 Interest Rate, Class A-2 Interest Rate, Class
A-3 Interest Rate, Class A-4 Interest Rate, Class A-5 Interest Rate, Class A-6
Interest Rate, Class M-1 Interest Rate, Class M-2 Interest Rate, Class B-1
Interest Rate or Class B-2 Interest Rate, (b) amend any provisions of Section
6.06 in such a manner as to affect the priority of payment of interest or
principal to Securityholders, or (c) reduce the aforesaid percentage required to
consent to any such amendment or any waiver hereunder, without the consent of
the Holders of all Securities then Outstanding, and provided further, that the
Rating Agency Condition has been satisfied.
(c) Concurrently with the solicitation of any consent pursuant to this
Section 10.03, the Indenture Trustee shall furnish written notification to
Standard & Poor's and Moody's of such solicitation. Promptly after the execution
of any amendment pursuant to this Section 10.03,
10-2
the Indenture Trustee shall furnish written notification of the substance of
such amendment to Standard & Poor's, Moody's and each Securityholder.
(d) It shall not be necessary for the consent of Securityholders under
this Section 10.03 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Securityholders shall be subject to such reasonable
requirements as the Indenture Trustee may prescribe.
(e) Each of the Owner Trustee and Indenture Trustee may, but shall not
be obligated to, enter into any such amendment which affects its own rights,
duties or immunities under this Agreement or otherwise.
(f) In connection with any amendment pursuant to this Section, the
Owner Trustee and Indenture Trustee shall be entitled to receive an unqualified
Opinion of Counsel to the Servicer to the effect that such amendment is
authorized or permitted by this Agreement.
(g) Upon the execution of any amendment or consent pursuant to this
Section 10.03, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Securityholder hereunder shall be bound thereby.
SECTION 10.04. Notices.
All communications and notices pursuant hereto to the Servicer, the
Originator, the Seller, the Trust, the Owner Trustee, the Indenture Trustee,
Standard & Poor's and Moody's shall be in writing and delivered (by facsimile or
other means) or mailed to it at the appropriate following address:
If to the Originator, the Guarantor or the Servicer:
Conseco Finance Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
If to the Seller:
Conseco Finance Securitizations Corp.
1100 Landmark Towers
000 Xx. Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
10-3
If to the Trust or the Owner Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telecopier Number: 000-000-0000
If to the Indenture Trustee:
U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Administration, Structured Finance
Telecopier Number: (000) 000-0000
If to Standard & Poor's:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Surveillance
Telecopier Number: (000) 000-0000
If to Moody's:
Xxxxx'x Investors Services, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Home Equity Monitoring Group
Telecopier Number: (000) 000-0000
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Securityholder
shall be in writing and delivered or mailed at the address shown in the Note
Register or the Certificate Register, as applicable.
SECTION 10.05. Merger and Integration.
Except as specifically stated otherwise herein, this Agreement sets
forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement. This Agreement may not be modified, amended, waived or supplemented
except as provided herein.
10-4
SECTION 10.06. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SECTION 10.07. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.
SECTION 10.08. Limitation of Liability.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as trustee of Conseco Finance Home Loan
Trust 1999-G under the Trust Agreement, in the exercise of the powers and
authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the parties hereto and by any Person claiming
by, through or under the parties hereto and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement or the other Related Documents.
10-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this 16th
day of November, 1999.
ISSUER:
CONSECO FINANCE HOME LOAN TRUST
1999-G
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely on behalf
of the Issuer as Owner Trustee under the
Trust Agreement
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Vice President
SELLER:
CONSECO FINANCE SECURITIZATIONS
CORP.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and Treasurer
SERVICER:
CONSECO FINANCE CORP.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and Treasurer
Acknowledged and Accepted:
U.S. BANK TRUST NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Vice President
By: /s/ Xxxxx X. Xxxx
---------------------------------
Xxxxx X. Xxxx
Assistant Secretary
10-6
EXHIBIT A
FORM OF ASSIGNMENT
In accordance with the Sale and Servicing Agreement (the "Agreement")
dated as of September 1, 1999 between Conseco Finance Corp. (the "Originator"),
Conseco Finance Securitizations Corp., as seller (the "Seller"), and Conseco
Finance Home Loan Trust 1999-G, the Seller does hereby transfer, assign, set
over and otherwise convey to the Trust all right, title and interest of the
Originator in (i) the home improvement contracts and promissory notes and home
equity loans (collectively, the "Loans") identified in the List of Loans, a copy
of which is attached hereto, including, without limitation, all related
Collateral Security, all liens and security interests created thereby and any
and all rights to receive payments which are due pursuant thereto from and after
the Cut-off Date, but excluding any rights to receive payments which were due
pursuant thereto prior to the Cut-off Date, (ii) all rights of the Seller under
the Transfer Agreement, (iii) the Errors and Omissions Protection Policy as such
policy relates to the Loans, (iv) all items contained in the Loan Files, (v) the
Trust Accounts and all funds on deposit therein from time to time and all
investments and proceeds thereof (including all income thereon), and (vi) all
proceeds in any way derived from any of the foregoing. Capitalized terms used
herein but not defined herein have the meanings assigned to them in the
Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this 16th day of November, 1999.
CONSECO FINANCE SECURITIZATIONS
CORP.
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
A-1
EXHIBIT B
FORM OF CERTIFICATE REGARDING
REPURCHASED LOANS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING REPURCHASED LOANS
The undersigned certifies that [s]he is a [title] of Conseco Finance
Corp., a Delaware corporation (the "Originator"); [s]he is duly authorized to
execute and deliver this certificate on behalf of the Servicer pursuant to
Section 3.05 of the Sale and Servicing Agreement (the "Agreement"), dated as of
September 1, 1999 among the Originator, Conseco Finance Securitizations Corp.,
as Seller and Conseco Finance Home Loan Trust 1999-G (the "Trust") (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement):
1. The Loans on the attached schedule are to be repurchased by
the [Originator] [Servicer] on the date hereof pursuant to Section
[3.05] [5.17] of the Agreement.
2. Upon deposit of the Repurchase Price for such Loans, such
Loans may, pursuant to Section [3.05] [5.17] of the Agreement, be
assigned by the Trust to the [Originator] [Servicer].
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day
of ________________, ________.
CONSECO FINANCE CORP.
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
B-1
EXHIBIT C
FORM OF MONTHLY REPORT
[TO BE REVISED]
CONSECO FINANCE HOME LOAN TRUST 1999-G
Payment Date:____________
1. Amount Available ____________
2. Monthly Servicing Fee (if Originator is not the Servicer)
(up to 1/12 of 0.75% of Pool Scheduled Principal Balance) ____________
Interest
--------
Class A-1
---------
3. (a) Class A-1 Interest Rate (6.57%) ________
(b) Class A-1 Interest Amount ____________
(c) Unpaid Class A-1 Interest Shortfall ____________
(d) Class A-1 Interest paid ____________
(e) Class A-1 Interest Carryover Shortfall ____________
Class A-2
---------
4. (a) Class A-2 Interest Rate (7.14%) ____________
(b) Class A-2 Interest Amount ____________
(c) Unpaid Class A-2 Interest Shortfall ____________
(d) Class A-2 Interest paid ____________
(e) Class A-2 Interest Carryover Shortfall ____________
Class A-3
---------
5. (a) Class A-3 Interest Rate (7.36%) ____________
(b) Class A-3 Interest Amount ____________
(c) Unpaid Class A-3 Interest Shortfall ____________
(d) Class A-3 Interest paid ____________
(e) Class A-3 Interest Carryover Shortfall ____________
C-1
Class A-4
---------
6. (a) Class A-4 Interest Rate (7.55%) ____________
(b) Class A-4 Interest Amount ____________
(c) Unpaid Class A-4 Interest Shortfall ____________
(d) Class A-4 Interest paid ____________
(e) Class A-4 Interest Carryover Shortfall ____________
Class A-5
---------
7. (a) Class A-5 Interest Rate (8.08%) ____________
(b) Class A-5 Interest Amount ____________
(c) Unpaid Class A-5 Interest Shortfall ____________
(d) Class A-5 Interest paid ____________
(e) Class A-5 Interest Carryover Shortfall ____________
Class A-6
---------
8. (a) Class A-6 Interest Rate (8.16%) ____________
(b) Class A-6 Interest Amount ____________
(c) Unpaid Class A-6 Interest Shortfall ____________
(d) Class A-6 Interest paid ____________
(e) Class A-6 Interest Carryover Shortfall ____________
Class M-1
---------
9. Interest on Class M-1 Adjusted Principal Balance
(a) Class M-1 Adjusted Principal Balance ____________
(b) Class M-1 Interest Rate (8.88%) ____________
(c) Class M-1 Interest Amount ____________
(d) Unpaid Class M-1 Interest Shortfall ____________
(e) Class M-1 Interest paid ____________
(f) Class M-1 Interest Carryover Shortfall ____________
Class M-2
---------
10. Interest on Class M-2 Adjusted Principal Balance
(a) Class M-2 Adjusted Principal Balance ____________
(b) Class M-2 Interest Rate (9.52%) ____________
(c) Class M-2 Interest Amount ____________
(d) Unpaid Class M-2 Interest Shortfall ____________
(e) Class M-2 Interest paid ____________
(f) Class M-2 Interest Carryover Shortfall ____________
C-2
Class B-1
---------
11. Interest on Class B-1 Adjusted Principal Balance
(a) Class B-1 Adjusted Principal Balance ____________
(b) Class B-1 Interest Rate (10.48%) ____________
(c) Class B-1 Interest Amount ____________
(d) Unpaid Class B-1 Interest Shortfall ____________
(e) Class B-1 Interest paid ____________
(f) Class B-1 Interest Carryover Shortfall ____________
Principal
---------
12. Formula Principal Distribution Amount
(a) Scheduled principal ____________
(b) Principal Prepayments ____________
(c) Liquidated Loans ____________
(d) Repurchases ____________
(e) Previously undistributed (a)-(d) amounts ____________
Class A Principal
-----------------
13. Amount Available less prior distributions ____________
14. Class A-1 Formula Principal Distribution Amount ____________
15. Class A-2 Formula Principal Distribution Amount ____________
16. Class A-3 Formula Principal Distribution Amount ____________
17. Class A-4 Formula Principal Distribution Amount ____________
18. Class A-5 Formula Principal Distribution Amount ____________
19. Class A-6 Formula Principal Distribution Amount ____________
20. Class A Principal Distribution Amount ____________
(a) Class A-1 principal paid ____________
(b) Class A-2 principal paid ____________
(c) Class A-3 principal paid ____________
(d) Class A-4 principal paid ____________
(e) Class A-5 principal paid ____________
(f) Class A-6 principal paid ____________
21. Class A Principal Balance (after distributions of principal
on current Payment Date) ____________
C-3
(a) Class A-1 ____________
(b) Class A-2 ____________
(c) Class A-3 ____________
(d) Class A-4 ____________
(e) Class A-5 ____________
(f) Class A-6
Class M-1 Principal
-------------------
22. Remaining Amount Available ____________
23. Class M-1 Formula Principal Distribution Amount ____________
24. Class M-1 Principal Distribution Amount ____________
25. Class M-1 Principal Balance (after distributions of
principal on current Payment Date) ____________
Class M-1 Distribution Test (test must be satisfied
---------------------------
on and after the Payment Date occurring in December 2003)
26. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for current
Payment Date ____________
(b) Average Sixty-Day Delinquency Ratio Test
(arithmetic average of ratios for this month and two
preceding months; may not exceed 10% of the Senior
Subordination Percentage calculated in Item 97.)
27. Cumulative Realized Losses Test
(a) Cumulative Realized Losses for current Payment Date (as
a percentage of Cut-off Date Pool Principal Balance;
may not exceed 10.0% from November 15, 2003 to November
14, 2004; 12.0% from November 15, 2004 to November 14,
2005; 14.0% from November 15, 2005, to November 14,
2006 and 15.0% thereafter) ____________
28. The sum of the Class M-1 Adjusted Principal Balance,
the Class M-2 Adjusted Principal Balance, the Class B-1
Adjusted Principal Balance and the Class B-2 Adjusted
Principal Balance divided by the Pool Scheduled
Principal Balance of the preceding Payment Date (not to
be less than 57.00%) ____________
C-4
Class M-2 Principal
-------------------
29. Remaining Amount Available ____________
30. Class M-2 Formula Principal Distribution Amount ____________
31. Class M-2 Principal Distribution Amount ____________
32. Class M-2 Principal Balance (after distributions of
principal on current Payment Date)
Class M-2 Distribution Test (test must be satisfied
---------------------------
on and after the Payment Date occurring in December 2003)
33. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Payment Date ____________
(b) Average Sixty-Day Delinquency Ratio Test
(arithmetic average of ratios for this month and two
preceding months; may not exceed 10% of the Senior
Subordination Percentage calculated in Item 81) ____________
C-5
34. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Payment Date
(as a percentage of Cut-off Date
Pool Principal Balance; may not
exceed 10.0% from November 15, 2003
to November 14, 2004; 12.0% from
November 15, 2004 to November 14, 2005;
14.0% from November 15, 2005, to
November 14, 2006 and 15.0% thereafter) ____________
35. The sum of the Class M-2 Adjusted Principal Balance,
the Class B-1 Adjusted Principal Balance and the Class
B-2 Adjusted Principal Balance divided by the Pool
Scheduled Principal Balance of the preceding Payment
Date (not to be less than 41.00%) ____________
Class B-1 Distribution Tests (tests must be satisfied
----------------------------
on and after the Payment Date occurring in December 2003)
36. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Payment Date ____________
(b) Average Sixty-Day Delinquency Ratio Test
(arithmetic average of ratios for this month and two
preceding months; may not exceed 10% of the
Senior Subordination Percentage calculated in
Item 97) ____________
37. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Payment Date
(as a percentage of Cut-off Date
Pool Principal Balance; may not
exceed 10.0% from November 15, 2003
to November 14, 2004; 12.0% from
November 15, 2004 to November 14, 2005;
14.0% from November 15, 2005, to
November 14, 2006 and 15.0% thereafter) ____________
38. The sum of the Class B-1 Adjusted Principal Balance and
the Class B-2 Adjusted Principal Balance divided by the
Pool Scheduled Principal Balance of the preceding
Payment Date (not to be less than 28.00%) ____________
C-6
Class B-1 Principal
-------------------
39. Amount Available less all prior distributions ____________
40. Class B-1 Formula Principal Distribution Amount ____________
41. Class B-1 Principal Distribution Amount ____________
42. Class B-1 Principal Balance (after distributions of
principal on current Payment Date) ____________
Class B-2 Distribution Test (test must be satisfied
---------------------------
on and after the Payment Date occurring in December 2003)
43. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Payment Date ____________
(b) Average Sixty-Day Delinquency Ratio Test
(arithmetic average of ratios for this month and two
preceding months; may not exceed 10% of the Senior
Subordination Percentage calculated in Item 81.)
44. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Payment Date
(as a percentage of Cut-off Date
Pool Principal Balance; may not
exceed 10.0% from November 15, 2003
to November 14, 2004; 12.0% from
November 15, 2004 to November 14, 2005;
14.0% from November 15, 2005, to
November 14, 2006 and 15.0% thereafter) ____________
45. The Class B-2 Adjusted Principal Balance divided by the
Pool Scheduled Principal Balance of the preceding
Payment Date (not to be less than 17.50%) ____________
46. Class B-2 Adjusted Principal Balance (not to be less
than $2,000,000) ____________
C-7
47. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Payment Date
(as a percentage of Cut-off Date
Pool Principal Balance; may not
exceed 10.0% from November 15, 2003
to November 14, 2004; 12.0% from
November 15, 2004 to November 14, 2005;
14.0% from November 15, 2005, to
November 14, 2006 and 15.0% thereafter) ____________
48. The Class B-2 Adjusted Principal Balance divided by
the Pool Scheduled Principal Balance of the preceding
Payment Date (not to be less than 17.50%) ____________
49. Class B-2 Adjusted Principal Balance ____________
Liquidation Loss Interest; Total Distribution
Class M-1
---------
50. (a) Amount Available less all prior distributions ____________
(b) Class M-1 Formula Liquidation Loss Interest
Distribution Amount ____________
(c) Amount applied to Unpaid Class M-1 Liquidation
Loss Interest Shortfall ____________
(d) Remaining Unpaid Class M-1 Liquidation Loss
Interest Shortfall ____________
51. Amount by which Class M-1 Formula Distribution Amount
[(lines 15(c) and (d), 28, 45(b)) exceeds Class M-1
Distribution Amount (lines 15(e), 29, 45(c))] ____________
Class M-2
---------
52. (a) Amount Available less all prior
distributions ____________
(b) Class M-2 Formula Liquidation Loss Interest
Distribution Amount ____________
(c) Amount applied to Unpaid Class M-2 Liquidation
Loss Interest Shortfall ____________
(d) Remaining Unpaid Class M-2 Liquidation Loss
Interest Shortfall ____________
53. Amount by which Class M-2 Formula Distribution Amount
[(lines 16(c) and (d), 32, 47(b)) exceeds Class M-2
Distribution Amount (lines 16(e), 33, 47(c))] ____________
C-8
54. Class B-1
---------
(a) Amount Available less all preceding distributions ____________
(b) Class B-1 Formula Liquidation Loss Interest
Distribution Amount ____________
(c) Amount applied to Unpaid Class B-1 Liquidation Loss
Interest Shortfall ____________
(d) Remaining Unpaid Class B -1 Liquidation Loss
Interest Shortfall ____________
55. Amount by which Class B-1 Formula Distribution Amount
[(lines 17(c) and (d), 42, 49(b)) exceeds Class B-1
Distribution Amount (lines 17(e), 43, 49(c))] ____________
Class B-2
---------
56. Amount Available less all prior distributions ____________
Interest
57. (a) Class B-2 Interest Rate (10.96%) ____________
(b) Class B-2 Interest Amount ____________
(c) Unpaid Class B-2 Interest Shortfall ____________
(d) Class B-2 interest paid ____________
(e) Class B-2 Interest Carryover Shortfall ____________
Principal
58. Amount Available after prior distributions ____________
59. Class B-2 Formula Principal Distribution Amount ____________
60. Class B-2 Liquidation Loss Principal Amount ____________
61. Guaranty Payment ____________
62. Class B-2 Principal Distribution Amount ____________
63. Class B-2 Principal Balance
(after distributions of principal on current Payment Date) ____________
64. Amount by which Class B-2 Formula Distribution Amount
[(lines 52(b) and (c), 54 and 55) exceeds Class B-2
Distribution Amount (lines 52(d) and 57))] ____________
C-9
65. Monthly Servicing Fee
(if Originator is Servicer) ____________
66. [Reserved]
Additional Principal Distribution
---------------------------------
Class A
-------
67. Additional Principal Distribution Amount ____________
(a) Class A-1 ____________
(b) Class A-1 Principal Balance (after of payment of (a)) ____________
(c) Class A-2 ____________
(d) Class A-2 Principal Balance (after payment of (c)) ____________
(e) Class A-3 ____________
(f) Class A-3 Principal Balance (after of payment of (e)) ____________
(g) Class A-4 ____________
(h) Class A-4 Principal Balance (after of payment of (g)) ____________
(i) Class A-5 ____________
(j) Class A-5 Principal Balance (after of payment of (i)) ____________
(k) Class A-6 ____________
(l) Class A-6 Principal Balance (after of payment of (k)) ____________
68. Monthly Servicing Fee (portion, if any, in excess of
1/12 of 0.75% of Pool Scheduled Principal Balance;
Company or Affiliate not Servicer) ____________
Certificate Distribution Amount
69. Amount Available remaining after prior distributions ____________
Class A, Class M, Class B Notes
70. Pool Scheduled Principal Balance ____________
71. Pool Factor ____________
72. Note Pool Factor
Class A-1 ____________
Class A-2 ____________
Class A-3 ____________
Class A-4 ____________
Class A-5 ____________
Class A-6 ____________
Class M-1 ____________
Class M-2 ____________
C-10
73. Certificate Pool Factor
Class B-1 ____________
Class B-2 ____________
74. Loans delinquent by number and aggregate Scheduled
Principal Balance:
(a) 30 - 59 days ____________
(b) 60 - 89 days ____________
(c) 90 or more days ____________
75. Defaulted Loans, by number and Scheduled Principal Balance:
(a) That became Defaulted Loans during related
Due Period ____________
(b) As of last day of related Due Period ____________
____________
(c) That became Liquidated Loans during related
Due Period ____________
Net Liquidation Losses ____________
(d) In foreclosure ____________
____________
(e) Foreclosure completed ____________
during related Due Period ____________
(f) Foreclosed upon and held by Servicer ____________
____________
76. Pool Scheduled Principal Balance ____________
77. Home Equity Loans delinquent by number and aggregate
Scheduled Principal Balance:
(a) 30 - 59 days ____________
(b) 60 - 89 days ____________
(c) 90 or more days ____________
C-11
78. Home Improvement Loans delinquent by number and aggregate
Scheduled Principal Balance:
(a) 30 - 59 days ____________
(b) 60 - 89 days ____________
(c) 90 or more days ____________
79. Home Equity Defaulted Loans, by number and Scheduled
Principal Balance:
(a) That became Defaulted Loans during related
Due Period ____________
____________
(b) As of last day of related Due Period ____________
(c) That became Liquidated Loans during related
Due Period ____________
____________
Net Liquidation Losses ____________
(d) In foreclosure ____________
____________
(e) Foreclosure completed ____________
during related Due Period ____________
(f) Foreclosed upon and held by Servicer ____________
80. Home Improvement Defaulted Loans, by number and
Scheduled Principal Balance:
(a) That became Defaulted Loans during related
Due Period ____________
____________
(b) As of last day of related Due Period ____________
____________
(c) That became Liquidated Loans during related
Due Period ____________
____________
Net Liquidation Losses ____________
(d) In foreclosure ____________
____________
(e) Foreclosure completed ____________
during related Due Period ____________
(f) Foreclosed upon and held by Servicer ____________
81. Senior Subordination Percentage (as of any Payment
Date)
C-12
(a) Before the Class A Principal Balance has been reduced
to zero, the sum of the Class M-1 Adjusted Principal
Balance, the Class M-2 Adjusted Principal Balance, the
Class B-1 Adjusted Principal Balance and the Class B-2
Adjusted Principal Balance divided by the Pool
Scheduled Principal Balance;
C-12
(b) on any Payment Date on which the Class A Principal
Balance has been reduced to zero and the Class M-1
Principal Balance has not been reduced to zero, the sum
of the Class M-2 Adjusted Principal Balance, the Class
B-1 Adjusted Principal Balance and the Class B-2
Adjusted Principal Balance divided by the Pool
Scheduled Principal Balance;
(c) On any Payment Date on which the Class M-1 Principal
Balance has been reduced to zero and the Class M-2
Principal Balance has not been reduced to zero, the sum
of the Class B-1 Adjusted Principal Balance and the
Class B-2 Adjusted Principal Balance divided by the
Pool Scheduled Principal Balance; and
(d) On any Payment Date on which the Class M-2 Principal
Balance has been reduced to zero and the Class B-1
Principal Balance has not been reduced to zero, the
Class B-2 Adjusted Principal Balance divided by the
Pool Scheduled Principal Balance. ____________
82. Cumulative Realized Loss Ratio
(a) As of any Payment Date, Cumulative Realized Losses
divided by the Cut-off Date Pool Principal Balance ____________
The amounts of principal and interest distributions set out above are
expressed as a dollar amount per Note with a 1% Class Percentage Interest or per
$1,000 denomination of Note or Certificate.
Please contact _________________________________ of U.S. Bank Trust
National Association, __________________________ with any questions regarding
this Statement or your Distribution.
C-13
EXHIBIT D
FORM OF CERTIFICATE OF SERVICING OFFICER
CONSECO FINANCE CORP.
The undersigned certifies that [s]he is a [title] of Conseco Finance Corp.,
a Delaware corporation (the "Servicer"), and that as such [s]he is duly
authorized to execute and deliver this certificate on behalf of the Servicer
pursuant to Section 5.11 of the Sale and Servicing Agreement (the "Agreement")
dated as of September 1, 1999 among Servicer, Conseco Finance Securitizations
Corp., as Seller, and Conseco Finance Home Loan Trust 1999-G (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement), and further certifies that:
1. The Monthly Report for the period from ____________ to ____________
attached to this certificate is complete and accurate in accordance with
the requirements of Section 5.11 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this day of
_________________, _________.
CONSECO FINANCE CORP.
By:
------------------------------------
Name:
------------------------------
Title:
------------------------------
D-1
EXHIBIT E
FORM OF ADDITION NOTICE
___________________, 1999
U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Re: Sale and Servicing Agreement (the "Agreement"), dated as of
September 1, 1999, among Conseco Finance Corp. (the "Originator") ,
Conseco Finance Securitizations Corp. (the "Seller") and Conseco Home
Loan Trust 1999-G (the "Trust")
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the
meanings given them in the Agreement. The Seller hereby notifies the Indenture
Trustee of an assignment to the Trust of Subsequent Loans on the date and in the
amounts set forth below:
Subsequent Transfer Date:
Cut-off Date Principal Balance of Subsequent Loans to be assigned to
Trust on Subsequent Transfer Date: $
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
CONSECO FINANCE SECURITIZATIONS CORP.
By:______________________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:_________________________________
Name:
Title:
E-1
EXHIBIT F
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Sale and Servicing Agreement (the "Agreement")
dated as of September 1, 1999, among the undersigned, Conseco Finance Corp. and
Conseco Home Loan Trust 1999-G (the "Trust"), the undersigned does hereby
transfer, assign, set over and otherwise convey, without recourse, to the Trust
all right, title and interest of the Seller in and to (1) the home equity and
home improvement loans identified in the List of Loans attached hereto (each a
"Subsequent Loan"), and all moneys payable thereon or in respect to the
Subsequent Loans, including any liquidation proceeds therefrom but excluding
payments due on the Subsequent Loans prior to _____, 1999 (the "Subsequent
Cut-off Date"), (2) all rights of the Seller under the Subsequent Transfer
Agreement with Conseco Finance Corp., (3) the Errors and Omissions Protection
Policy as such policy relates to the Subsequent Loans, (4) all items contained
in the related Loan Files, and (5) all proceeds and products of the foregoing.
This Subsequent Transfer Instrument is made pursuant to and upon the
representation and warranties on the part of the undersigned contained in
Section 2.03 and Article III of the Agreement and no others. All undefined
capitalized terms used in this Subsequent Transfer Instrument have the meanings
given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Subsequent Transfer
Instrument to be duly executed this _____ day of _______________, 1999.
CONSECO FINANCE SECURITIZATIONS CORP.
[Seal] By:______________________________________
Name:
Title:
F-1
EXHIBIT G
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Seller"), and that as such
he is duly authorized to execute and deliver this certificate on behalf of the
Seller in connection with the Sale and Servicing Agreement dated as of September
1, 1999 (the "Agreement") among the Seller, Originator, Conseco Finance Corp.
and Conseco Home Loan Trust 1999-G. All capitalized terms used herein without
definition have the respective meanings specified in the Agreement. The
undersigned further certifies that:
1. This Certificate is delivered in connection with the sale to the Trust
on ________________________ (the "Subsequent Transfer Date") of Loans (the
"Subsequent Loans") identified in the List of Loans attached to the Subsequent
Transfer Instrument of even date herewith.
2. As of the Subsequent Transfer Date, all representations and warranties
in Section 3.01, 3.02, 3.03, 3.04 and 3.06 of the Agreement are true and
correct; all representations and warranties in Sections 3.02 and 3.03 of the
Agreement with respect to the Subsequent Loans are true to the best of his
knowledge; and all representations in Section 3.04 of the Agreement with respect
to the Subsequent Loans are true and correct.
3. All conditions precedent to the sale of the Subsequent Loans to the
Trust under Section 2.03 of the Agreement have been satisfied.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _______ day
of _______________________, 1999.
By:___________________________________
Name:
Title:
G-1
