Document:

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                                                                     EXHIBIT 4.3

                        INSURANCE AND INDEMNITY AGREEMENT

                                      among

                       FINANCIAL SECURITY ASSURANCE INC.,

                      CONSECO FINANCE SECURITIZATIONS CORP.

                                       and

                              CONSECO FINANCE CORP.

                            Dated as of June 1, 2000

                                  $935,000,000
                        Conseco Finance Home Equity Loan
                 Trust 2000-D Certificates for Home Equity Loans
            Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5
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                                TABLE OF CONTENTS
                                                                            Page

INSURANCE AND INDEMNITY AGREEMENT..............................................1

INTRODUCTORY STATEMENTS........................................................1

   ARTICLE I DEFINITIONS; LIMITED RECOURSE.....................................1

     Section 1.01.     Definitions.............................................1

     Section 1.02.     Limited Recourse........................................2

   ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS........................2

     Section 2.01.     Representations and Warranties of the Seller............2

     Section 2.02.     Affirmative Covenants of the Seller.....................5

     Section 2.03.     Negative Covenants of the Seller........................9

     Section 2.04.     Representations and Warranties of the Originator.......10

     Section 2.05.     Affirmative Covenants of the Originator................13

     Section 2.06.     Negative Covenants of the Originator...................17

     Section 2.07.     Reserved...............................................18

     Section 2.08.     Reserved...............................................18

     Section 2.09.     Reserved...............................................18

     Section 2.10.     Covenant of FSA........................................18

   ARTICLE III THE POLICY; REIMBURSEMENT; INDEMNIFICATION.....................18

     Section 3.01.     Issuance of the Policy.................................18

     Section 3.02.     Payment of Fees and Premium............................18

     Section 3.03.     Reimbursement and Additional Payment Obligation........19

     Section 3.04.     Indemnification........................................20

     Section 3.05.     Subrogation............................................22

   ARTICLE IV FURTHER AGREEMENTS..............................................22

     Section 4.01.     Effective Date; Term of Agreement......................22

     Section 4.02.     Obligations Absolute...................................22

     Section 4.03.     Assignments; Reinsurance; Third-Party Rights...........23

     Section 4.04.     Liability of FSA.......................................24

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   ARTICLE V EVENTS OF DEFAULT; REMEDIES......................................24

     Section 5.01.     Events of Default......................................24

     Section 5.02.     Remedies; Waivers......................................26

   ARTICLE VI MISCELLANEOUS...................................................27

     Section 6.01.     Amendments, Etc........................................27

     Section 6.02.     Notices................................................27

     Section 6.03.     Payment Procedure......................................28

     Section 6.04.     Severability...........................................28

     Section 6.05.     Governing Law..........................................28

     Section 6.06.     Consent to Jurisdiction................................28

     Section 6.07.     Consent of FSA.........................................29

     Section 6.08.     Counterparts...........................................29

     Section 6.09.     Trial by Jury Waived...................................29

     Section 6.10.     Limited Liability......................................30

     Section 6.11.     Entire Agreement.......................................30

APPENDIX I  DEFINITIONS........................................................1

APPENDIX II  OPINIONS OF COUNSEL...............................................1

ANNEX I           Form of Financial Guaranty Insurance Policy
APPENDIX A        Conditions Precedent to Issuance of Policy

                                       ii
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                        INSURANCE AND INDEMNITY AGREEMENT

     INSURANCE AND INDEMNITY AGREEMENT dated as of June 1, 2000 among FINANCIAL
SECURITY ASSURANCE INC. ("FSA"), CONSECO FINANCE SECURITIZATIONS CORP. (the
"Seller"), as Seller under the Pooling and Servicing Agreement (as defined
herein) and CONSECO FINANCE CORP. (the "Originator"), as originator of the Loans
(as defined herein) and as Servicer under the Pooling and Servicing Agreement
(in such capacity the "Servicer").

                             INTRODUCTORY STATEMENTS

     Conseco Finance Home Equity Loan Trust 2000-D (the "Issuer") intends to
issue the Certificates (as defined herein), including the Securities (as defined
herein) pursuant to the Pooling and Servicing Agreement (as defined herein). The
Certificates represent an undivided interest in the Trust Fund consisting
primarily of the Loans and the Loan Files (each as defined herein), including
certain home equity loans that have been or will be originated or acquired by
the Originator, sold by the Originator to the Seller pursuant to the Transfer
Agreement dated as of June 1, 2000, between the Originator and the Seller, and
sold by the Seller to the Issuer pursuant to the Pooling and Servicing
Agreement. The Servicer will service such home equity loans pursuant to the
Pooling and Servicing Agreement.

     The Seller and the Originator have requested that FSA issue a financial
guaranty insurance policy guarantying payment of the principal of and interest
on the Securities upon the terms and subject to the conditions provided herein.

     The parties hereto desire to specify the conditions precedent to the
issuance of the Policy by FSA, the payment of premium in respect of the Policy,
the indemnity and reimbursement to be provided to FSA in respect of amounts paid
by FSA under the Policy or otherwise and certain other matters.

     In consideration of the premises and of the agreements herein contained,
FSA, the Seller and the Originator hereby agree as follows:

                                   Article I.

                          DEFINITIONS; LIMITED RECOURSE

     Section 1.01 Definitions. Capitalized terms used herein shall have the
meanings provided in Appendix I hereto or, if not defined therein, in the
Pooling and Servicing Agreement, unless the context otherwise requires.

     Section 1.02 Limited Recourse. Notwithstanding any provision of this
Agreement to the contrary, the payment obligations set forth herein (other than
those set forth in Sections 3.02 and 3.04) shall be non-recourse obligations
with respect to the Seller and the Originator and shall be payable only from
monies available for such payment in accordance with the provisions of the
Pooling and Servicing Agreement (except to the extent that any such payment
obligation arises
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from a failure to perform or default of the Seller or the Originator under any
Transaction Document or by reason of negligence, willful misconduct or bad faith
on the part of the Seller or the Originator in the performance of its duties and
obligations thereunder or reckless disregard by the Seller or the Originator of
its duties and obligations thereunder).

                                  Article II.

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 2.01 Representations and Warranties of the Seller. The Seller
represents, warrants and covenants, as of the Date of Issuance, as follows:

          (a) Due Organization and Qualification. The Seller and each of its
     Subsidiaries is a corporation, duly organized, validly existing and in good
     standing under the laws of the state of its formation. The Seller and each
     of its Subsidiaries is duly qualified to do business, is in good standing
     and has obtained all necessary licenses, permits, charters, registrations
     and approvals (together, "approvals") necessary for the conduct of its
     business as currently conducted and as described in the Offering Document
     and the performance of its obligations under the Transaction Documents, in
     each jurisdiction in which the failure to be so qualified or to obtain such
     approvals would render any Loan unenforceable in any respect or would
     otherwise have a material adverse effect upon the Transaction.

          (b) Power and Authority. The Seller has all necessary corporate power
     and authority to conduct its business as currently conducted and as
     described in the Offering Document, to execute, deliver and perform its
     obligations under the Transaction Documents and to consummate the
     Transaction.

          (c) Due Authorization. The execution, delivery and performance of the
     Transaction Documents by the Seller have been duly authorized by all
     necessary corporate action and do not require any additional approvals or
     consents or other action by or any notice to or filing with any Person,
     including, without limitation, any governmental entity or the Seller's
     shareholders.

          (d) Noncontravention. Neither the execution and delivery of the
     Transaction Documents by the Seller, the consummation of the transactions
     contemplated thereby nor the satisfaction of the terms and conditions of
     the Transaction Documents,

               (i) conflicts with or results in any breach or violation of any
          provision of the Certificate of Incorporation or Bylaws of the Seller
          or any law, rule, regulation, order, writ, judgment, injunction,
          decree, determination or award currently in effect having
          applicability to the Seller or any of its properties, including
          regulations issued by an administrative agency or other governmental
          authority having supervisory powers over the Seller,

               (ii) constitutes a default by the Seller under or a breach of any
          provision of any loan agreement, mortgage, indenture or other
          agreement

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          or instrument to which the Seller or any of its Subsidiaries is a
          party or by which it or any of their properties is or may be bound or
          affected, or

               (iii) results in or requires the creation of any Lien upon or in
          respect of any of the Seller's assets except as otherwise expressly
          contemplated by the Transaction Documents.

          (e) Legal Proceedings. There is no action, proceeding or investigation
     by or before any court, governmental or administrative agency or arbitrator
     against or affecting all or any of the Loans, or the Seller or any of its
     Subsidiaries, or any properties or rights of the Seller or any of its
     Subsidiaries, pending or, to the Seller's knowledge after reasonable
     inquiry, threatened, which, in any case, if decided adversely to the
     Seller, would result in a Material Adverse Change with respect to the
     Seller or any Loan, except for the litigation disclosed in the Offering
     Document under the caption "CONSECO FINANCE CORP.--Recent Developments,"
     which is not reasonably likely to result in a Material Adverse Change with
     respect to the Seller or any Loan.

          (f) Valid and Binding Obligations. The Transaction Documents, when
     executed and delivered by the Seller, will constitute the legal, valid and
     binding obligations of the Seller, enforceable in accordance with their
     respective terms, except as such enforceability may be limited by
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting creditors' rights generally and general equitable principles. The
     Securities, when executed, authenticated and delivered in accordance with
     the Pooling and Servicing Agreement, will be validly issued and outstanding
     and entitled to the benefits of the Pooling and Servicing Agreement and,
     together with each Class of Certificates other than the Securities, will
     evidence the entire beneficial ownership interest in the Trust Fund.

          (g) Financial Statements. The Financial Statements of the Seller,
     copies of which have been furnished to FSA, (i) are, as of the dates and
     for the periods referred to therein, complete and correct in all material
     respects (except where solely due to an incorrect valuation of
     interest-only securities or receivables), (ii) present fairly the financial
     condition and results of operations of the Seller as of the dates and for
     the periods indicated (except where solely due to an incorrect valuation of
     interest-only securities or receivables) and (iii) have been prepared in
     accordance with generally accepted accounting principles consistently
     applied, except as noted therein (subject as to interim statements to
     normal year-end adjustments). Since the date of the most recent Financial
     Statements, there has been no material adverse change in such financial
     condition or results of operations. Except as disclosed in the Financial
     Statements, the Seller is not subject to any contingent liabilities or
     commitments that, individually or in the aggregate, have a material
     possibility of causing a Material Adverse Change in respect of the Seller.

          (h) ERISA. Either (i) the Seller is in compliance in all material
     respects with ERISA and has not incurred and does not reasonably expect to
     incur any liabilities to the PBGC under ERISA in connection with any Plan
     or Multiemployer Plan or to contribute now or in the future in respect of
     any Plan or Multiemployer Plan, or (ii) no Accumulated

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     Funding Deficiency, whether or not waived, has occurred with respect to any
     Plan. No Plan has been terminated, and no Commonly Controlled Entity has
     withdrawn from any Multiemployer Plan which could result in any liability
     under ERISA of a Commonly Controlled Entity. No Reportable Event or other
     event or condition has occurred which could result in the termination of
     any Plan by the PBGC. No Plan has an Underfunding greater than $100,000.
     The aggregate amount of Underfunding for all Underfunded Plans does not
     exceed $100,000. The liability to which the Commonly Controlled Entities
     would become subject under ERISA if they were to withdraw completely from
     all Multiemployer Plans as of the most recent valuation date is not in
     excess of $100,000. The Multiemployer Plans are neither in Reorganization
     (as defined in Section 4241 of ERISA) nor Insolvent (as defined in Section
     4245 of ERISA). The Seller is in compliance in all material respects with
     ERISA and has not incurred and does not reasonably expect to incur any
     liabilities to the PBGC (other than premiums due to the PBGC) in connection
     with any Plan or Multiemployer Plan.

          (i) Accuracy of Information. None of the Provided Documents contain
     any statement of a material fact with respect to the Seller or the
     Transaction that was untrue or misleading in any material respect when
     made. Since the furnishing of the Provided Documents, there has been no
     change, nor any development or event involving a prospective change known
     to the Seller, that would render any of the Provided Documents untrue or
     misleading in any material respect. There is no fact known to the Seller
     which has a material possibility of causing a Material Adverse Change with
     respect to the Seller or a substantial portion of the Loans.

          (j) Compliance With Securities Laws. The offer and sale of the
     Certificates comply in all material respects with all requirements of law,
     including all registration requirements of applicable securities laws.
     Without limitation of the foregoing, the Offering Document does not contain
     any untrue statement of a material fact and does not omit to state a
     material fact required to be stated therein or necessary to make the
     statements made therein, in light of the circumstances under which they
     were made, not misleading. Neither the Issuer nor the Trust Fund is
     required to be registered as an "investment company" under the Investment
     Company Act. The Pooling and Servicing Agreement is not required to be
     qualified under the Trust Indenture Act.

          (k) Transaction Documents. Each of the representations and warranties
     of the Seller contained in the Transaction Documents is true and correct in
     all material respects and the Seller hereby makes each such representation
     and warranty to, and for the benefit of, FSA as if the same were set forth
     in full herein.

          (l) Compliance With Law, Etc. No practice, procedure or policy
     employed or proposed to be employed by the Seller in the conduct of its
     business violates any law, regulation, judgment, agreement, order or decree
     applicable to the Seller which, if enforced, would result in a Material
     Adverse Change with respect to the Seller.

          (m) Good Title; Absence of Liens; Security Interest. Immediately prior
     to the transfer to the Issuer, the Seller is the owner of, and has good and
     marketable title to, the Loans free and clear of all Liens and Restrictions
     on Transferability, and has full right,

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     corporate power and lawful authority to assign, transfer and pledge the
     Loans. In the event that, in contravention of the intention of the parties,
     the transfer of the Loans by the Seller to the Issuer is characterized as
     other than a sale, such transfer shall be characterized as a secured
     financing, and the Issuer shall, for the benefit of the Trustee, have a
     valid and perfected first priority security interest in the Loans free and
     clear of all Liens and Restrictions on Transferability.

          (n) Taxes. The Seller has and its Parent and each of its Subsidiaries
     have filed all federal and state tax returns which are required to be filed
     and paid all taxes, including any assessments received by it, to the extent
     that such taxes have become due. Any taxes, fees and other governmental
     charges payable by the Seller in connection with the Transaction, the
     execution and delivery of the Transaction Documents and the issuance of the
     Certificates have been paid or shall have been paid at or prior to the Date
     of Issuance. The Certificates will be treated for federal income tax
     purposes as evidence of ownership of "regular interests" in the assets of
     the Issuer comprising a REMIC. The Issuer will not be treated as an
     association taxable as a corporation or as a taxable mortgage pool for
     federal or state tax purposes.

          (o) Solvency; Fraudulent Conveyance. The Seller is solvent and will
     not be rendered insolvent by the transactions contemplated by the
     Transaction Documents and, after giving effect to such transactions, the
     Seller will not be left with an unreasonably small amount of capital with
     which to engage in its business. The Seller does not intend to incur, or
     believe that it has incurred, debts beyond its ability to pay such debts as
     they mature. The Seller does not contemplate the commencement of
     insolvency, bankruptcy, liquidation or consolidation proceedings or the
     appointment of a receiver, liquidator, conservator, trustee or similar
     official in respect of the Seller or any of its assets. The amount of
     consideration being received by the Seller upon the sale of the
     Certificates to the Underwriters, together with the value of the
     Certificates and Class C Certificate retained by the Seller or its
     Subsidiaries, constitutes reasonably equivalent value and fair
     consideration for the Loans transferred to the Issuer. The Seller is not
     transferring the Loans to the Issuer or selling the Certificates to the
     Underwriters, as provided in the Transaction Documents, with any intent to
     hinder, delay or defraud any of the Seller's creditors.

     Section 2.02 Affirmative Covenants of the Seller. The Seller hereby agrees
that during the Term of the Agreement, unless FSA shall otherwise expressly
consent in writing:

          (a) Compliance With Agreements and Applicable Laws. The Seller shall
     perform each of its obligations under the Transaction Documents and any
     credit or loan agreements and shall comply with all material requirements
     of, and the Certificates shall be offered and sold in accordance with, any
     law, rule or regulation applicable to it or thereto, or that are required
     in connection with its performance under any of the Transaction Documents.

          (b) Financial Statements; Accountants' Reports; Other Information. The
     Seller shall keep or cause to be kept in reasonable detail books and
     records of account of the Seller's assets and business, and shall clearly
     reflect therein the transfer of the Loans

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     to the Issuer as a sale of the Seller's interest in the Loans. The Seller
     shall furnish or caused to be furnished to FSA:

               (i) Annual Financial Statements. As soon as available, and in any
          event within 90 days after the close of each fiscal year of the
          Seller, the audited balance sheets of the Seller as of the end of such
          fiscal year and the audited statements of income, changes in
          shareholders' equity and cash flows of the Seller for such fiscal
          year, all in reasonable detail and stating in comparative form the
          respective figures for the corresponding date and period in the
          preceding fiscal year, prepared in accordance with generally accepted
          accounting principles, consistently applied, and accompanied by the
          certificate of the Seller's independent accountants (who shall be a
          nationally recognized firm or otherwise acceptable to FSA) and by the
          certificate specified in Section 2.02(c) hereof.

               (ii) Quarterly Financial Statements. As soon as available, and in
          any event within 45 days after the close of each of the first three
          quarters of each fiscal year of the Seller, the unaudited balance
          sheets of the Seller as of the end of such quarter and the unaudited
          statements of income, changes in shareholders' equity and cash flows
          of the Seller for the portion of the fiscal year then ended, all in
          reasonable detail and stating in comparative form the respective
          figures for the corresponding date and period in the preceding fiscal
          year, prepared in accordance with generally accepted accounting
          principles, consistently applied (subject to normal year-end
          adjustments), and accompanied by the certificate specified in Section
          2.02(c) hereof if such certificate is required to be provided pursuant
          to such Section.

               (iii) Accountants' Reports. If a Trigger Event has occurred,
          copies of any reports submitted to the Seller by its independent
          accountants in connection with any examination of the financial
          statements of the Seller, promptly upon receipt thereof.

               (iv) Other Information. Promptly upon receipt thereof, copies of
          all reports, statements, certifications, schedules, or other similar
          items delivered to or by the Seller pursuant to the terms of the
          Transaction Documents and, promptly upon request, such other data as
          FSA may reasonably request; provided, however, that the Seller shall
          not be required to deliver any such items if provision by some other
          party to FSA is required under the Transaction Documents unless such
          other party wrongfully fails to deliver any such item. The Seller
          shall, upon the request of FSA, permit FSA or its authorized agents
          (A) to inspect the books and records of the Seller as they may relate
          to the Certificates, the Loans, the obligations of the Seller under
          the Transaction Documents, the Transaction and, but only following the
          occurrence of a Trigger Event, the Seller's business; (B) to discuss
          the affairs, finances and accounts of the Seller with the Chief
          Operating Officer and the Chief Financial Officer of

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          the Seller, no more frequently than annually unless a Trigger Event
          has occurred; and (C) upon the occurrence of a Trigger Event, to
          discuss the affairs, finances and accounts of the Seller with the
          Seller's independent accountants, provided that an officer of the
          Seller shall have the right to be present during such discussions.
          Such inspections and discussions shall be conducted during normal
          business hours and shall not unreasonably disrupt the business of the
          Seller. In addition, the Seller shall promptly (but in no case more
          than 30 days following issuance or receipt by the Commonly Controlled
          Entity) provide to FSA a copy of all correspondence between a Commonly
          Controlled Entity and the PBGC, IRS, Department of Labor or the
          administrators of a Multiemployer Plan relating to any Reportable
          Event or the underfunded status, termination or possible termination
          of a Plan or a Multiemployer Plan. The books and records of the Seller
          will be maintained at the address of the Seller designated herein for
          receipt of notices, unless the Seller shall otherwise advise the
          parties hereto in writing.

               (v) The Seller shall provide or cause to be provided to FSA an
          executed original copy of each document executed in connection with
          the transaction within 30 days after the date of closing.

          All financial statements specified in clauses (i) and (ii) above shall
     be furnished in consolidated form for the Seller and all Subsidiaries in
     the event the Seller shall consolidate its financial statements with its
     Subsidiaries.

          FSA agrees that it shall keep confidential any information of which it
     becomes aware through such inspections or discussions (unless such
     information is readily available from public sources), except as may be
     otherwise required by regulation, law or court order or requested by
     appropriate governmental authorities or as necessary to preserve its rights
     or security under or to enforce the Transaction Documents, provided that
     the foregoing shall not limit the right of FSA to make such information
     available to its regulators, securities rating agencies, reinsurers, credit
     and liquidity providers, counsel and accountants. If FSA is requested or
     required (by oral questions, interrogatories, requests for information or
     documents subpoena, civil investigative demand or similar process) to
     disclose any information of which it becomes aware through such inspections
     or discussions, FSA will promptly notify the Seller of such request(s) so
     that the Seller may seek an appropriate protective order and/or waive FSA's
     compliance with the provisions of this Agreement. If, in the absence of a
     protective order or the receipt of a waiver hereunder, FSA is, nonetheless,
     in the opinion of its counsel, compelled to disclose such information to
     any tribunal or else stand liable for contempt or suffer other censure or
     significant penalty, FSA may disclose such information to such tribunal
     that FSA is compelled to disclose, provided that a copy of all information
     disclosed is provided to the Seller promptly upon such disclosure.

          (c) Compliance Certificate. The Seller shall deliver to FSA
     concurrently with the delivery of the financial statements required
     pursuant to Section 2.02(b)(i) hereof (and concurrently with the delivery
     of the financial statements required pursuant to

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     Section 2.02(b)(ii) hereof, if a Trigger Event has occurred), a certificate
     signed by the Chief Financial Officer or other officer of the Seller
     stating that:

               (i) a review of the Seller's performance under the Transaction
          Documents during such period has been made under such officer's
          supervision;

               (ii) to the best of such individual's knowledge following
          reasonable inquiry, no Trigger Event, Default or Event of Default has
          occurred, or if a Trigger Event, Default or Event of Default has
          occurred, specifying the nature thereof and, if the Seller has a right
          to cure any such Default or Event of Default pursuant to Section 5.01,
          stating in reasonable detail the steps, if any, being taken by the
          Seller to cure such Default or Event of Default or to otherwise comply
          with the terms of the agreement to which such Default or Event of
          Default relates; and

               (iii) the attached financial reports submitted in accordance with
          Section 2.02(b)(i) or (ii) hereof, as applicable, are complete and
          correct in all material respects and present fairly the financial
          condition and results of operations of the Seller as of the dates and
          for the periods indicated, in accordance with generally accepted
          accounting principles consistently applied (subject as to interim
          statements to normal year-end adjustments).

          (d) Notice of Material Events. The Seller shall promptly inform FSA in
     writing of the occurrence of any of the following:

               (i) the submission of any claim or the initiation of any legal
          process, litigation or administrative or judicial investigation (A)
          against the Seller or the Issuer pertaining to the Loans in general,
          (B) with respect to a material portion of the Loans or (C) in which a
          request has been made for certification as a class action (or
          equivalent relief) that would involve a material portion of the Loans;

               (ii) any change in the location of the Seller's principal office
          or any change in the location of the Seller's books and records;

               (iii) the occurrence of any Trigger Event, Default or Event of
          Default; or

               (iv) any other event, circumstance or condition that has
          resulted, or has a material possibility of resulting, in a Material
          Adverse Change in respect of the Seller.

          (e) Further Assurances. The Seller shall, upon the request of FSA,
     from time to time, execute, acknowledge and deliver, or cause to be
     executed, acknowledged and delivered, promptly, and in any event within
     thirty (30) days of such request, such amendments hereto and such further
     instruments and take such further action as may be reasonably necessary to
     effectuate the intention, performance and provisions of the

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     Transaction Documents or to protect the interest of the Trustee, for the
     benefit of the Certificateholders and FSA, in the Loans, free and clear of
     all Liens and Restrictions on Transferability except the Lien in favor of
     the Trustee, for the benefit of the Certificateholders and FSA,
     Restrictions on Transferability arising out of the insolvency or bankruptcy
     of an individual obligor under a Loan and the Restrictions on
     Transferability imposed by the Pooling and Servicing Agreement. In
     addition, the Seller agrees to cooperate with S&P and Moody's in connection
     with any review of the Transaction which may be undertaken by S&P and
     Moody's after the date hereof.

          (f) Third-Party Beneficiary. The Seller agrees that FSA shall have all
     rights of a third-party beneficiary in respect of the Pooling and Servicing
     Agreement and hereby incorporates and restates its representations,
     warranties and covenants as set forth therein for the benefit of FSA.

          (g) Corporate Existence. The Seller shall maintain its corporate
     existence and shall at all times continue to be duly organized under the
     laws of the State of Minnesota and duly qualified and duly authorized (as
     described in Sections 2.01(a), (b) and (c) hereof) and shall conduct its
     business in accordance with the terms of its Certificate of Incorporation
     and Bylaws.

     Section 2.03 Negative Covenants of the Seller. The Seller hereby agrees
that during the Term of the Agreement, unless FSA shall otherwise expressly
consent in writing:

          (a) Restrictions on Liens. The Seller shall not take any action
     inconsistent with the Trustee's ownership of the Loans and shall not (i)
     create or consent (upon the happening of a contingency or otherwise) to the
     creation, incurrence or existence of any Lien or Restriction on
     Transferability on the Loans except for the Restrictions on Transferability
     imposed by the Pooling and Servicing Agreement or (ii) sign or file under
     the Uniform Commercial Code of any jurisdiction any financing statement
     which names the Seller as a debtor, or sign any security agreement
     authorizing any secured party thereunder to file such financing statement,
     with respect to the Loans, except in each case any such instrument solely
     securing the rights of the Trustee, for the benefit of the
     Certificateholders and FSA.

          (b) Impairment of Rights. The Seller shall not take any action, or
     fail to take any action, if such action or failure to take action may (i)
     interfere with the enforcement of any rights under the Transaction
     Documents that are material to the rights, benefits or obligations of the
     Trustee, the Certificateholders or FSA, (ii) result in a Material Adverse
     Change in respect of any Loan or (iii) impair the ability of the Seller to
     perform its obligations under the Transaction Documents.

          (c) Waiver, Amendments, Etc. The Seller shall not waive, modify or
     amend, or consent to any waiver, modification or amendment of, any of the
     provisions of any of the Transaction Documents.

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          (d) Successors. The Seller shall not terminate or designate, or
     consent to the termination or designation of, any Servicer, Trustee or
     Custodian without the prior approval of FSA.

     Section 2.04 Representations and Warranties of the Originator. The
Originator represents, warrants and covenants, as of the Date of Issuance, as
follows:

          (a) Due Organization and Qualification. The Originator and each of its
     Subsidiaries is a corporation, duly organized, validly existing and in good
     standing under the laws of the state of its formation. The Originator and
     each of its Subsidiaries is duly qualified to do business, is in good
     standing and has obtained all necessary licenses, permits, charters,
     registrations and approvals (together, "approvals") necessary for the
     conduct of its business as currently conducted and as described in the
     Offering Document and the performance of its obligations under the
     Transaction Documents, in each jurisdiction in which the failure to be so
     qualified or to obtain such approvals would render any Loan unenforceable
     in any respect or would otherwise have a material adverse effect upon the
     Transaction.

          (b) Power and Authority. The Originator has all necessary corporate
     power and authority to conduct its business as currently conducted and as
     described in the Offering Document, to execute, deliver and perform its
     obligations under the Transaction Documents and to consummate the
     Transaction.

          (c) Due Authorization. The execution, delivery and performance of the
     Transaction Documents by the Originator have been duly authorized by all
     necessary corporate action and do not require any additional approvals or
     consents or other action by or any notice to or filing with any Person,
     including, without limitation, any governmental entity or the Originator's
     shareholders.

          (d) Noncontravention. Neither the execution and delivery of the
     Transaction Documents by the Originator, the consummation of the
     transactions contemplated thereby nor the satisfaction of the terms and
     conditions of the Transaction Documents,

               (i) conflicts with or results in any breach or violation of any
          provision of the Certificate of Incorporation or Bylaws of the
          Originator or any law, rule, regulation, order, writ, judgment,
          injunction, decree, determination or award currently in effect having
          applicability to the Originator or any of its properties, including
          regulations issued by an administrative agency or other governmental
          authority having supervisory powers over the Originator,

               (ii) constitutes a default by the Originator under or a breach of
          any provision of any loan agreement, mortgage, indenture or other
          agreement or instrument to which the Originator or any of its
          Subsidiaries is a party or by which it or any of their properties is
          or may be bound or affected, or

                                       10
<PAGE>

               (iii) results in or requires the creation of any Lien upon or in
          respect of any of the Originator's assets except as otherwise
          expressly contemplated by the Transaction Documents.

          (e) Legal Proceedings. There is no action, proceeding or investigation
     by or before any court, governmental or administrative agency or arbitrator
     against or affecting all or any of the Loans, or the Originator or any of
     its Subsidiaries, or any properties or rights of the Originator or any of
     its Subsidiaries, pending or, to the Originator's knowledge after
     reasonable inquiry, threatened, which, in any case, if decided adversely to
     the Originator, would result in a Material Adverse Change with respect to
     the Originator or any Loan , except for the litigation disclosed in the
     Offering Document under the caption "CONSECO FINANCE CORP.--Recent
     Developments," which is not reasonably likely to result in a Material
     Adverse Change with respect to the Originator.

          (f) Valid and Binding Obligations. The Transaction Documents, when
     executed and delivered by the Originator, will constitute the legal, valid
     and binding obligations of the Originator, enforceable in accordance with
     their respective terms, except as such enforceability may be limited by
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     affecting creditors' rights generally and general equitable principles. The
     Securities, when executed, authenticated and delivered in accordance with
     the Pooling and Servicing Agreement, will be validly issued and outstanding
     and entitled to the benefits of the Pooling and Servicing Agreement and,
     together with each Class of Certificates other than the Securities, will
     evidence the entire beneficial ownership interest in the Trust Fund.

          (g) Financial Statements. The Financial Statements of the Originator,
     copies of which have been furnished to FSA, (i) are, as of the dates and
     for the periods referred to therein, complete and correct in all material
     respects (except where solely due to an incorrect valuation of
     interest-only securities or receivables), (ii) present fairly the financial
     condition and results of operations of the Originator as of the dates and
     for the periods indicated (except where solely due to an incorrect
     valuation of interest-only securities or receivables) and (iii) have been
     prepared in accordance with generally accepted accounting principles
     consistently applied, except as noted therein (subject as to interim
     statements to normal year-end adjustments). Since the date of the most
     recent Financial Statements, there has been no material adverse change in
     such financial condition or results of operations. Except as disclosed in
     the Financial Statements, the Originator is not subject to any contingent
     liabilities or commitments that, individually or in the aggregate, have a
     material possibility of causing a Material Adverse Change in respect of the
     Originator.

          (h) ERISA. Either (i) the Originator is in compliance in all material
     respects with ERISA and has not incurred and does not reasonably expect to
     incur any liabilities to the PBGC under ERISA in connection with any Plan
     or Multiemployer Plan or to contribute now or in the future in respect of
     any Plan or Multiemployer Plan, or (ii) no Accumulated Funding Deficiency,
     whether or not waived, has occurred with respect to any Plan. No Plan has
     been terminated, and no Commonly Controlled Entity has withdrawn from any
     Multiemployer Plan which could result in any liability under ERISA

                                       11
<PAGE>

     of a Commonly Controlled Entity. No Reportable Event or other event or
     condition has occurred which could result in the termination of any Plan by
     the PBGC. No Plan has an Underfunding greater than $100,000. The aggregate
     amount of Underfunding for all Underfunded Plans does not exceed $100,000.
     The liability to which the Commonly Controlled Entities would become
     subject under ERISA if they were to withdraw completely from all
     Multiemployer Plans as of the most recent valuation date is not in excess
     of $100,000. The Multiemployer Plans are neither in Reorganization (as
     defined in Section 4241 of ERISA) nor Insolvent (as defined in Section 4245
     of ERISA). The Originator is in compliance in all material respects with
     ERISA and has not incurred and does not reasonably expect to incur any
     liabilities to the PBGC (other than premiums due to the PBGC) in connection
     with any Plan or Multiemployer Plan.

          (i) Accuracy of Information. None of the Provided Documents contain
     any statement of a material fact with respect to the Originator or the
     Transaction that was untrue or misleading in any material respect when
     made. Since the furnishing of the Provided Documents, there has been no
     change, nor any development or event involving a prospective change known
     to the Originator, that would render any of the Provided Documents untrue
     or misleading in any material respect. There is no fact known to the
     Originator which has a material possibility of causing a Material Adverse
     Change with respect to the Originator or a substantial portion of the
     Loans.

          (j) Compliance With Securities Laws. The offer and sale of the
     Certificates comply in all material respects with all requirements of law,
     including all registration requirements of applicable securities laws.
     Without limitation of the foregoing, the Offering Document does not contain
     any untrue statement of a material fact and does not omit to state a
     material fact required to be stated therein or necessary to make the
     statements made therein, in light of the circumstances under which they
     were made, not misleading. Neither the Issuer nor the Trust Fund is
     required to be registered as an "investment company" under the Investment
     Company Act. The Pooling and Servicing Agreement is not required to be
     qualified under the Trust Indenture Act.

          (k) Transaction Documents. Each of the representations and warranties
     of the Originator contained in the Transaction Documents is true and
     correct in all material respects and the Originator hereby makes each such
     representation and warranty to, and for the benefit of, FSA as if the same
     were set forth in full herein.

          (l) Compliance With Law, Etc. No practice, procedure or policy
     employed or proposed to be employed by the Originator in the conduct of its
     business violates any law, regulation, judgment, agreement, order or decree
     applicable to the Originator which, if enforced, would result in a Material
     Adverse Change with respect to the Originator.

          (m) Taxes. The Originator has and its Parent and each of its
     Subsidiaries have filed all federal and state tax returns which are
     required to be filed and paid all taxes, including any assessments received
     by it, to the extent that such taxes have become due. Any taxes, fees and
     other governmental charges payable by the Originator in connection with the
     Transaction, the execution and delivery of the Transaction Documents and
     the issuance of the Certificates have been paid or shall have been paid at
     or prior to the Date

                                       12
<PAGE>

     of Issuance. The Certificates will be treated for federal income tax
     purposes as evidence of ownership of "regular interests" in the assets of
     the Issuer comprising a REMIC. The Issuer will not be treated as an
     association taxable as a corporation or as a taxable mortgage pool for
     federal or state tax purposes.

          (n) Solvency; Fraudulent Conveyance. The Originator is solvent and
     will not be rendered insolvent by the transactions contemplated by the
     Transaction Documents and, after giving effect to such transactions, the
     Originator will not be left with an unreasonably small amount of capital
     with which to engage in its business. The Originator does not intend to
     incur, or believe that it has incurred, debts beyond its ability to pay
     such debts as they mature. The Originator does not contemplate the
     commencement of insolvency, bankruptcy, liquidation or consolidation
     proceedings or the appointment of a receiver, liquidator, conservator,
     trustee or similar official in respect of the Originator or any of its
     assets.

     Section 2.05 Affirmative Covenants of the Originator. The Originator hereby
agrees that during the Term of the Agreement, unless FSA shall otherwise
expressly consent in writing:

          (a) Compliance With Agreements and Applicable Laws. The Originator
     shall perform each of its obligations under the Transaction Documents and
     any credit or loan agreements and shall comply with all material
     requirements of, and the Certificates shall be offered and sold in
     accordance with, any law, rule or regulation applicable to it or thereto,
     or that are required in connection with its performance under any of the
     Transaction Documents.

          (b) Financial Statements; Accountants' Reports; Other Information. The
     Originator shall keep or cause to be kept in reasonable detail books and
     records of account of the Originator's assets and business, and shall
     clearly reflect therein the transfer of the Loans to the Seller as a sale
     of the Originator's interest in the Loans. The Originator shall furnish or
     caused to be furnished to FSA:

               (i) Annual Financial Statements. As soon as available, and in any
          event within 90 days after the close of each fiscal year of the
          Originator, the audited balance sheets of the Originator as of the end
          of such fiscal year and the audited statements of income, changes in
          shareholders' equity and cash flows of the Originator for such fiscal
          year, all in reasonable detail and stating in comparative form the
          respective figures for the corresponding date and period in the
          preceding fiscal year, prepared in accordance with generally accepted
          accounting principles, consistently applied, and accompanied by the
          certificate of the Originator's independent accountants (who shall be
          a nationally recognized firm or otherwise acceptable to FSA) and by
          the certificate specified in Section 2.05(c) hereof.

               (ii) Quarterly Financial Statements. As soon as available, and in
          any event within 45 days after the close of each of the first three
          quarters of each fiscal year of the Originator, the unaudited balance
          sheets

                                       13
<PAGE>

          of the Originator as of the end of such quarter and the unaudited
          statements of income, changes in shareholders' equity and cash flows
          of the Originator for the portion of the fiscal year then ended, all
          in reasonable detail and stating in comparative form the respective
          figures for the corresponding date and period in the preceding fiscal
          year, prepared in accordance with generally accepted accounting
          principles, consistently applied (subject to normal year-end
          adjustments), and accompanied by the certificate specified in Section
          2.05(c) hereof if such certificate is required to be provided pursuant
          to such Section.

               (iii) Accountants' Reports. If a Trigger Event has occurred,
          copies of any reports submitted to the Originator by its independent
          accountants in connection with any examination of the financial
          statements of the Originator, promptly upon receipt thereof.

               (iv) Other Information. Promptly upon receipt thereof, copies of
          all reports, statements, certifications, schedules, or other similar
          items delivered to or by the Originator pursuant to the terms of the
          Transaction Documents and, promptly upon request, such other data as
          FSA may reasonably request; provided, however, that the Originator
          shall not be required to deliver any such items if provision by some
          other party to FSA is required under the Transaction Documents unless
          such other party wrongfully fails to deliver any such item. The
          Originator shall, upon the request of FSA, permit FSA or its
          authorized agents (A) to inspect the books and records of the
          Originator as they may relate to the Certificates, the Loans, the
          obligations of the Originator under the Transaction Documents, the
          Transaction and, but only following the occurrence of a Trigger Event,
          the Originator's business; (B) to discuss the affairs, finances and
          accounts of the Originator with the Chief Operating Officer and the
          Chief Financial Officer of the Originator, no more frequently than
          annually unless a Trigger Event has occurred; and (C) upon the
          occurrence of a Trigger Event, to discuss the affairs, finances and
          accounts of the Originator with the Originator's independent
          accountants, provided that an officer of the Originator shall have the
          right to be present during such discussions. Such inspections and
          discussions shall be conducted during normal business hours and shall
          not unreasonably disrupt the business of the Originator. In addition,
          the Originator shall promptly (but in no case more than 30 days
          following issuance or receipt by the Commonly Controlled Entity)
          provide to FSA a copy of all correspondence between a Commonly
          Controlled Entity and the PBGC, IRS, Department of Labor or the
          administrators of a Multiemployer Plan relating to any Reportable
          Event or the underfunded status, termination or possible termination
          of a Plan or a Multiemployer Plan. The books and records of the
          Originator will be maintained at the address of the Originator
          designated herein for receipt of notices, unless the Originator shall
          otherwise advise the parties hereto in writing.

                                       14
<PAGE>

               (v) The Originator shall provide or cause to be provided to FSA
          an executed original copy of each document executed in connection with
          the transaction within 30 days after the date of closing.

          All financial statements specified in clauses (i) and (ii) above shall
     be furnished in consolidated form for the Originator and all Subsidiaries
     in the event the Originator shall consolidate its financial statements with
     its Subsidiaries.

          FSA agrees that it shall keep confidential any information of which it
     becomes aware through such inspections or discussions (unless such
     information is readily available from public sources), except as may be
     otherwise required by regulation, law or court order or requested by
     appropriate governmental authorities or as necessary to preserve its rights
     or security under or to enforce the Transaction Documents, provided that
     the foregoing shall not limit the right of FSA to make such information
     available to its regulators, securities rating agencies, reinsurers, credit
     and liquidity providers, counsel and accountants. If FSA is requested or
     required (by oral questions, interrogatories, requests for information or
     documents subpoena, civil investigative demand or similar process) to
     disclose any information of which it becomes aware through such inspections
     or discussions, FSA will promptly notify the Originator of such request(s)
     so that the Originator may seek an appropriate protective order and/or
     waive FSA's compliance with the provisions of this Agreement. If, in the
     absence of a protective order or the receipt of a waiver hereunder, FSA is,
     nonetheless, in the opinion of its counsel, compelled to disclose such
     information to any tribunal or else stand liable for contempt or suffer
     other censure or significant penalty, FSA may disclose such information to
     such tribunal that FSA is compelled to disclose, provided that a copy of
     all information disclosed is provided to the Originator promptly upon such
     disclosure.

          (c) Compliance Certificate. The Originator shall deliver to FSA
     concurrently with the delivery of the financial statements required
     pursuant to Section 2.05(b)(i) hereof (and concurrently with the delivery
     of the financial statements required pursuant to Section 2.05(b)(ii)
     hereof, if a Trigger Event has occurred), a certificate signed by the Chief
     Financial Officer or other officer of the Originator stating that:

               (i) a review of the Originator's performance under the
          Transaction Documents during such period has been made under such
          officer's supervision;

               (ii) to the best of such individual's knowledge following
          reasonable inquiry, no Trigger Event, Default or Event of Default has
          occurred, or if a Trigger Event, Default or Event of Default has
          occurred, specifying the nature thereof and, if the Originator has a
          right to cure any such Default or Event of Default pursuant to Section
          5.01, stating in reasonable detail the steps, if any, being taken by
          the Originator to cure such Default or Event of Default or to
          otherwise comply with the terms of the agreement to which such Default
          or Event of Default relates; and

               (iii) the attached financial reports submitted in accordance with
          Section 2.05(b)(i) or (ii) hereof, as applicable, are complete and
          correct in

                                       15
<PAGE>

          all material respects and present fairly the financial condition and
          results of operations of the Originator as of the dates and for the
          periods indicated, in accordance with generally accepted accounting
          principles consistently applied (subject as to interim statements to
          normal year-end adjustments).

          (d) Notice of Material Events. The Originator shall promptly inform
     FSA in writing of the occurrence of any of the following:

               (i) the submission of any claim or the initiation of any legal
          process, litigation or administrative or judicial investigation (A)
          against the Originator or the Issuer pertaining to the Loans in
          general, (B) with respect to a material portion of the Loans or (C) in
          which a request has been made for certification as a class action (or
          equivalent relief) that would involve a material portion of the Loans;

               (ii) any change in the location of the Originator's principal
          office or any change in the location of the Originator's books and
          records;

               (iii) the occurrence of any Trigger Event, Default or Event of
          Default; or

               (iv) any other event, circumstance or condition that has
          resulted, or has a material possibility of resulting, in a Material
          Adverse Change in respect of the Originator.

          (e) Further Assurances. The Originator shall, upon the request of FSA,
     from time to time, execute, acknowledge and deliver, or cause to be
     executed, acknowledged and delivered, promptly, and in any event within
     thirty (30) days of such request, such amendments hereto and such further
     instruments and take such further action as may be reasonably necessary to
     effectuate the intention, performance and provisions of the Transaction
     Documents or to protect the interest of the Trustee, for the benefit of the
     Certificateholders and FSA, in the Loans, free and clear of all Liens and
     Restrictions on Transferability except the Lien in favor of the Trustee,
     for the benefit of the Certificateholders and FSA, Restrictions on
     Transferability arising out of the insolvency or bankruptcy of an
     individual obligor under a Loan and the Restrictions on Transferability
     imposed by the Pooling and Servicing Agreement. In addition, the Originator
     agrees to cooperate with S&P and Moody's in connection with any review of
     the Transaction which may be undertaken by S&P and Moody's after the date
     hereof.

          (f) Third-Party Beneficiary. The Originator agrees that FSA shall have
     all rights of a third-party beneficiary in respect of the Pooling and
     Servicing Agreement and hereby incorporates and restates its
     representations, warranties and covenants as set forth therein for the
     benefit of FSA.

          (g) Corporate Existence. The Originator shall maintain its corporate
     existence and shall at all times continue to be duly organized under the
     laws of the State of Delaware and duly qualified and duly authorized (as
     described in Sections 2.05(a), (b)

                                       16
<PAGE>

     and (c) hereof) and shall conduct its business in accordance with the terms
     of its Certificate of Incorporation and Bylaws.

     Section 2.06 Negative Covenants of the Originator. The Originator hereby
agrees that during the Term of the Agreement, unless FSA shall otherwise
expressly consent in writing:

          (a) Restrictions on Liens. The Originator shall not take any action
     inconsistent with the Trustee's ownership of the Loans and shall not (i)
     create or consent (upon the happening of a contingency or otherwise) to the
     creation, incurrence or existence of any Lien or Restriction on
     Transferability on the Loans except for the Restrictions on Transferability
     imposed by the Transfer Agreement and the Pooling and Servicing Agreement
     or (ii) sign or file under the Uniform Commercial Code of any jurisdiction
     any financing statement which names the Originator as a debtor, or sign any
     security agreement authorizing any secured party thereunder to file such
     financing statement, with respect to the Loans, except in each case any
     such instrument solely securing the rights of the Seller.

          (b) Impairment of Rights. The Originator shall not take any action, or
     fail to take any action, if such action or failure to take action may (i)
     interfere with the enforcement of any rights under the Transaction
     Documents that are material to the rights, benefits or obligations of the
     Trustee, the Certificateholders or FSA, (ii) result in a Material Adverse
     Change in respect of any Loan or (iii) impair the ability of the Originator
     to perform its obligations under the Transaction Documents, except actions
     taken in its capacity as Originator in accordance with the standards set
     forth in the Pooling and Servicing Agreement.

          (c) Waiver, Amendments, Etc. The Originator shall not waive, modify or
     amend, or consent to any waiver, modification or amendment of, any of the
     provisions of any of the Transaction Documents.

          (d) Successors. The Originator shall not terminate or designate, or
     consent to the termination or designation of, any successor Originator,
     Trustee or Custodian without the prior approval of FSA.

          Section 2.07 Reserved.

          Section 2.08 Reserved.

          Section 2.09 Reserved.

          Section 2.10 Covenant of FSA. FSA hereby agrees that, notwithstanding
     any provision to the contrary contained in Section 7.01 of the Pooling and
     Servicing Agreement, it shall be obliged prior to the occurrence of an
     Event of Default hereunder or of a Servicer Termination Event thereunder to
     extend each quarterly term of the Servicer, prior to the otherwise
     applicable expiration date thereof, in a manner contemplated or permitted
     by such Section 7.01(b).

                                       17
<PAGE>

                                  Article III.

                   THE POLICY; REIMBURSEMENT; INDEMNIFICATION

     Section 3.01 Issuance of the Policy. FSA agrees to issue the Policy subject
to satisfaction of the conditions precedent set forth in Appendix A hereto.

     Section 3.02 Payment of Fees and Premium.

          (a) Legal Fees. On the Date of Issuance, the Originator shall pay or
     cause to be paid legal fees and disbursements incurred by FSA in connection
     with the issuance of the Policy, unless otherwise agreed in writing between
     the Seller and FSA.

          (b) Rating Agency Fees. The initial fees of S&P and Moody's with
     respect to the Securities and the transactions contemplated hereby shall be
     paid by the Originator in full on the Date of Issuance, or otherwise
     provided for to the satisfaction of FSA. All periodic and subsequent fees
     of S&P and Moody's with respect to, and directly allocable to, the
     Certificates shall be for the account of, and shall be billed to, the
     Originator. The fees for any other rating agency shall be paid by the party
     requesting such other agency's rating, unless such other agency is a
     substitute for S&P and Moody's in the event that S&P and Moody's is no
     longer rating the Certificates, in which case the cost for such agency
     shall be paid by the Originator.

          (c) Auditors' Fees. In the event that FSA's auditors are required to
     provide information or any consent in connection with the Offering Document
     prepared prior to the Date of Issuance, fees therefor in an amount set
     forth in the Premium Letter shall be paid by the Originator. The Originator
     shall pay on demand any additional fees of FSA's auditors payable in
     respect of any Offering Document that are incurred after the Date of
     Issuance. It is understood that FSA's auditors shall not incur any
     additional fees in respect of future Offering Documents except at the
     request of or with the consent of the Originator.

          (d) Premium. In consideration of the issuance by FSA of the Policy,
     FSA shall be entitled to receive the Premium as and when due in accordance
     with the terms of the Premium Letter (i) in the case of Premium due on or
     before the Date of Issuance, directly from the Originator by wire transfer
     to an account designated by FSA, (ii) in the case of Premium due after the
     Date of Issuance, pursuant to Section 8.04 of the Pooling and Servicing
     Agreement and (iii) in the case of Premium Supplement due on any date, on
     each Payment Date following the Premium Supplement Commencement Date. The
     Premium paid hereunder or under the Pooling and Servicing Agreement shall
     be nonrefundable without regard to whether FSA makes any payment under the
     Policy or any other circumstances relating to the Certificates or provision
     being made for payment of the Certificates prior to maturity.

     Section 3.03 Reimbursement and Additional Payment Obligation.
Notwithstanding anything to the contrary in the Transaction Documents, pursuant
to Section 8.04 of the Pooling and Servicing Agreement, the following amounts
shall be payable to FSA:

                                       18
<PAGE>

          (a) a sum equal to the total of all amounts paid by FSA under the
     Policy;

          (b) any and all out-of-pocket charges, fees, costs and expenses which
     FSA may reasonably pay or incur, including, but not limited to, attorneys'
     and accountants' fees and expenses, in connection with (i) in the event of
     payments under the Policy, any accounts established to facilitate payments
     under the Policy, to the extent FSA has not been immediately reimbursed on
     the date that any amount is paid by FSA under the Policy, or other
     administrative expenses relating to such payments under the Policy, (ii)
     the enforcement, defense or preservation of any rights in respect of any of
     the Transaction Documents, including defending, monitoring or participating
     in any litigation or proceeding (including any insolvency or bankruptcy
     proceeding in respect of any Transaction participant or any affiliate
     thereof) relating to any of the Transaction Documents, any party to any of
     the Transaction Documents or the Transaction, (iii) any amendment, waiver
     or other action with respect to, or related to, any Transaction Document
     whether or not executed or completed, (iv) any review or investigation made
     by FSA in those circumstances where its approval or consent is sought under
     any of the Transaction Documents;

          (c) interest on any and all amounts described in this Section 3.03 or
     Section 3.02 from the date due to FSA pursuant to the provisions hereof
     until payment thereof in full, payable to FSA at the Late Payment Rate per
     annum; and

          (d) any payments made by FSA on behalf of, or advanced to, the Issuer,
     including, without limitation, any amounts payable by the Issuer pursuant
     to the Certificates or any other Transaction Documents; and any payments
     made by FSA as, or in lieu of, any servicing, management, trustee,
     custodial or administrative fees payable, in the sole discretion of FSA to
     third parties in connection with the Transaction.

     All such amounts are to be immediately due and payable without demand, in
full without any requirement on the part of FSA to seek reimbursement from any
other sources of indemnity therefor or to allocate expenses to other
transactions benefiting therefrom.

     Section 3.04 Indemnification.

          (a) Indemnification by the Seller and the Originator. In addition to
     any and all rights of reimbursement, indemnification, subrogation and any
     other rights pursuant hereto or under law or in equity, the Seller and the
     Originator jointly and severally agree to pay, and to protect, indemnify
     and save harmless, FSA and its officers, directors, shareholders,
     employees, agents and each Person, if any, who controls FSA within the
     meaning of either Section 15 of the Securities Act or Section 20 of the
     Exchange Act from and against any and all claims, losses, liabilities
     (including penalties), actions, suits, judgments, demands, damages, costs
     or expenses (including, without limitation, fees and expenses of attorneys,
     consultants and auditors and reasonable costs of investigations) of any
     nature arising out of or relating to the transactions contemplated by the
     Transaction Documents by reason of:

                                       19
<PAGE>

               (i) the negligence, bad faith, willful misconduct, misfeasance,
          malfeasance or theft committed by any director, officer, employee or
          agent of the Seller, the Originator or the Issuer;

               (ii) the breach by the Seller, the Originator or the Issuer, as
          the case may be, of any representation, warranty or covenant under any
          of the Transaction Documents (other than the breach of a
          representation or warranty in Sections 3.02, 3.03, 3.04 or 3.05 of the
          Pooling and Servicing Agreement, provided that the Seller has timely
          exercised its repurchase obligation with respect thereto in accordance
          with Section 3.06 of the Pooling and Servicing Agreement) or the
          occurrence, in respect of the Seller, the Originator or the Issuer, as
          applicable, under any of the Transaction Documents of any "event of
          default" or any event which, with the giving of notice or the lapse of
          time or both, would constitute any "event of default"; or

               (iii) any untrue statement or alleged untrue statement of a
          material fact contained in any Offering Document or any omission or
          alleged omission to state therein a material fact required to be
          stated therein or necessary to make the statements therein not
          misleading;

     except insofar as such claims, damages, losses, liabilities, costs or
     expenses arise out of or are based upon (i) Income Taxes payable by or
     assessed against FSA or (ii) any untrue statement or omission in
     information included in an Offering Document and furnished by FSA in
     writing expressly for use therein (all such information so furnished being
     referred to herein as "FSA Information"), it being understood that, in
     respect of the initial Offering Document, the FSA Information is limited to
     the information included under the caption "The Certificate Insurer" and
     the financial statements of FSA incorporated by reference therein.

          (b) Conduct of Actions or Proceedings. If any action or proceeding
     (including any governmental investigation) shall be brought or asserted
     against FSA, any officer, director, shareholder, employee or agent of FSA
     or any Person controlling FSA (individually, an "Indemnified Party" and,
     collectively, the "Indemnified Parties") in respect of which indemnity may
     be sought from the Seller or the Originator (the "Indemnifying Party")
     hereunder, FSA shall promptly notify the Indemnifying Party in writing, and
     the Indemnifying Party shall assume the defense thereof, including the
     employment of counsel satisfactory to FSA and the payment of all expenses.
     An Indemnified Party shall have the right to employ separate counsel in any
     such action and to participate in the defense thereof at the expense of the
     Indemnified Party; provided, however, that the fees and expenses of such
     separate counsel shall be at the expense of the Indemnifying Party if (i)
     the Indemnifying Party has agreed to pay such fees and expenses, (ii) the
     Indemnifying Party shall have failed to assume the defense of such action
     or proceeding and employ counsel satisfactory to FSA in any such action or
     proceeding or (iii) the named parties to any such action or proceeding
     (including any impleaded parties) include both the Indemnified Party and
     the Indemnifying Party, and the Indemnified Party shall have been advised
     by counsel that (A) there may be one or more legal defenses available to it
     which are different from or additional to those

                                       20
<PAGE>

     available to the Indemnifying Party and (B) the representation of the
     Indemnifying Party and the Indemnified Party by the same counsel would be
     inappropriate or contrary to prudent practice (in which case, if the
     Indemnified Party notifies the Indemnifying Party in writing that it elects
     to employ separate counsel at the expense of the Indemnifying Party, the
     Indemnifying Party shall not have the right to assume the defense of such
     action or proceeding on behalf of such Indemnified Party, it being
     understood, however, that the Indemnifying Party shall not, in connection
     with any one such action or proceeding or separate but substantially
     similar or related actions or proceedings in the same jurisdiction arising
     out of the same general allegations or circumstances, be liable for the
     reasonable fees and expenses of more than one separate firm of attorneys at
     any time for the Indemnified Parties, which firm shall be designated in
     writing by FSA). The Indemnifying Party shall not be liable for any
     settlement of any such action or proceeding effected without its written
     consent to the extent that any such settlement shall be prejudicial to the
     Indemnifying Party, but, if settled with its written consent, or if there
     be a final judgment for the plaintiff in any such action or proceeding with
     respect to which the Indemnifying Party shall have received notice in
     accordance with this subsection (b), the Indemnifying Party agrees to
     indemnify and hold the Indemnified Parties harmless from and against any
     loss or liability by reason of such settlement or judgment.

          (c) Contribution. To provide for just and equitable contribution if
     the indemnification provided by the Indemnifying Party is determined to be
     unavailable for any Indemnified Party (other than due to application of
     this Section), the Indemnifying Party shall contribute to the losses
     incurred by the Indemnified Party on the basis of the relative fault of the
     Indemnifying Party, on the one hand, and the Indemnified Party, on the
     other hand.

     Section 3.05 Subrogation. Subject only to the priority of payment
provisions of the Pooling and Servicing Agreement, the Seller or the Originator
acknowledge that, to the extent of any payment made by FSA pursuant to the
Policy, FSA is to be fully subrogated to the extent of such payment and any
additional interest due on any late payment, to the rights of the
Securityholders to any moneys paid or payable in respect of the Securities under
the Transaction Documents or otherwise. The Seller and the Originator agree to
such subrogation and, further, agree to execute such instruments and to take
such actions as, in the sole judgment of FSA, are necessary to evidence such
subrogation and to perfect the rights of FSA to receive any moneys paid or
payable in respect of the Securities under the Transaction Documents or
otherwise.

                                  Article IV.

                               FURTHER AGREEMENTS

     Section 4.01 Effective Date; Term of Agreement. This Agreement shall take
effect on the Date of Issuance and shall remain in effect until the later of (a)
such time as FSA is no longer subject to a claim under the Policy and the Policy
shall have been surrendered to FSA for cancellation and (b) all amounts payable
to FSA and the Securityholders under the Transaction Documents and under the
Certificates have been paid in full; provided, however, that the provisions of
Sections 3.02, 3.03 and 3.04 hereof shall survive any termination of this
Agreement.

                                       21
<PAGE>

     Section 4.02 Obligations Absolute. (a) Subject to Section 1.02 above, the
payment obligations of the Seller and the Originator hereunder shall be absolute
and unconditional, and shall be paid strictly in accordance with this Agreement
under all circumstances irrespective of (i) any lack of validity or
enforceability of, or any amendment or other modifications of, or waiver with
respect to, any of the Transaction Documents, the Certificates or the Policy;
(ii) any exchange or release of any other obligations hereunder; (iii) the
existence of any claim, setoff, defense, reduction, abatement or other right
which the Seller or the Originator may have at any time against FSA or any other
Person; (iv) any document presented in connection with the Policy proving to be
forged, fraudulent, invalid or insufficient in any respect, including any
failure to strictly comply with the terms of the Policy, or any statement
therein being untrue or inaccurate in any respect; (v) any failure of the Seller
or the Originator, as applicable, to receive the proceeds from the sale of the
Certificates; (vi) any breach by the Seller or the Originator, as applicable, of
any representation, warranty or covenant contained in any of the Transaction
Documents; or (vii) any other circumstances, other than payment in full, which
might otherwise constitute a defense available to, or discharge of, the Seller
or the Originator, as applicable, in respect of any Transaction Document.

          (b) The Seller and the Originator and any and all others who are now
     or may become liable for all or part of the obligations of the Seller or
     the Originator under this Agreement agree to be bound by this Agreement and
     (i) to the extent permitted by law, waive and renounce any and all
     redemption and exemption rights and the benefit of all valuation and
     appraisement privileges against the indebtedness, if any, and obligations
     evidenced by any Transaction Document or by any extension or renewal
     thereof; (ii) waive presentment and demand for payment, notices of
     nonpayment and of dishonor, protest of dishonor and notice of protest;
     (iii) waive all notices in connection with the delivery and acceptance
     hereof and all other notices in connection with the performance, default or
     enforcement of any payment hereunder except as required by the Transaction
     Documents; (iv) waive all rights of abatement, diminution, postponement or
     deduction, or to any defense other than payment, or to any right of setoff
     or recoupment arising out of any breach under any of the Transaction
     Documents, by any party thereto or any beneficiary thereof, or out of any
     obligation at any time owing to the Seller or the Originator, as
     applicable; (v) agree that any consent, waiver or forbearance hereunder
     with respect to an event shall operate only for such event and not for any
     subsequent event; (vi) consent to any and all extensions of time that may
     be granted by FSA with respect to any payment hereunder or other provisions
     hereof and to the release of any security at any time given for any payment
     hereunder, or any part thereof, with or without substitution, and to the
     release of any Person or entity liable for any such payment; and (vii)
     consent to the addition of any and all other makers, endorsers, guarantors
     and other obligors for any payment hereunder, and to the acceptance of any
     and all other security for any payment hereunder, and agree that the
     addition of any such obligors or security shall not affect the liability of
     the parties hereto for any payment hereunder.

          (c) Nothing herein shall be construed as prohibiting the Seller or the
     Originator from pursuing any rights or remedies it may have against any
     Person other than FSA in a separate legal proceeding.

                                       22
<PAGE>

     Section 4.03 Assignments; Reinsurance; Third-Party Rights. (a) This
Agreement shall be a continuing obligation of the parties hereto and shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, provided, however, that the representations
and warranties of the Originator shall not be binding upon any Successor
Servicer. Neither the Seller nor the Originator may assign its rights under this
Agreement, or delegate any of its duties hereunder, without the prior written
consent of FSA. Any assignment made in violation of this Agreement shall be null
and void.

          (b) FSA shall have the right to give participations in its rights
     under this Agreement and to enter into contracts of reinsurance with
     respect to the Policy upon such terms and conditions as FSA may in its
     discretion determine; provided, however, that no such participation or
     reinsurance agreement or arrangement shall relieve FSA of any of its
     obligations hereunder or under the Policy.

          (c) In addition, FSA shall be entitled to assign or pledge to any bank
     or other lender providing liquidity or credit with respect to the
     Transaction or the obligations of FSA in connection therewith any rights of
     FSA under the Transaction Documents or with respect to any real or personal
     property or other interests pledged to FSA, or in which FSA has a security
     interest, in connection with the Transaction.

          (d) Except as provided herein with respect to participants and
     reinsurers, nothing in this Agreement shall confer any right, remedy or
     claim, express or implied, upon any Person, including, particularly, any
     Certificateholder, other than FSA, against the Seller, or the Originator,
     and all the terms, covenants, conditions, promises and agreements contained
     herein shall be for the sole and exclusive benefit of the parties hereto
     and their successors and permitted assigns. Neither the Trustee nor any
     Certificateholder shall have any right to payment from any premiums paid or
     payable hereunder or from any other amounts paid by the Seller, or the
     Originator pursuant to Section 3.02, 3.03 or 3.04 hereof.

     Section 4.04 Liability of FSA. Neither FSA nor any of its officers,
directors or employees shall be liable or responsible for: (a) the use which may
be made of the Policy by the Trustee or for any acts or omissions of the Trustee
in connection therewith or (b) the validity, sufficiency, accuracy or
genuineness of documents delivered to FSA (or its Fiscal Agent) in connection
with any claim under the Policy, or of any signatures thereon, even if such
documents or signatures should in fact prove to be in any or all respects
invalid, insufficient, fraudulent or forged (unless FSA had actual knowledge
thereof). In furtherance and not in limitation of the foregoing, FSA (or its
Fiscal Agent) may accept documents that appear on their face to be in order,
without responsibility for further investigation.

                                   Article V.

                           EVENTS OF DEFAULT; REMEDIES

     Section 5.01 Events of Default. The occurrence of any of the following
events with respect to the Seller or the Originator shall constitute an Event of
Default hereunder:

                                       23
<PAGE>

          (a) any representation or warranty made by the Seller or the
     Originator, as applicable, under any of the Transaction Documents, or in
     any certificate or report furnished under any of the Transaction Documents,
     shall prove to be untrue or incorrect in any material respect; provided,
     however, that (i) if the Seller or the Originator, as applicable,
     effectively cures any such defect in any representation or warranty under
     any Transaction Document, or certificate or report furnished under any
     Transaction Document, within the time period specified in the relevant
     Transaction Document as the cure period therefor, such defect shall not in
     and of itself constitute an Event of Default hereunder; (ii) with respect
     to any Loan, no Event of Default shall exist if the Originator has timely
     repurchased such Loan in accordance with Section 3.06 of the Pooling and
     Servicing Agreement;

          (b) (i) the Seller or the Originator shall fail to pay when due any
     amount payable by it under any of the Transaction Documents; (ii) the
     Seller or the Originator shall have asserted that any of the Transaction
     Documents to which it is a party is not valid and binding on the parties
     thereto; or (iii) any court, governmental authority or agency having
     jurisdiction over any of the parties to any of the Transaction Documents or
     any property thereof shall find or rule that any material provision of any
     of the Transaction Documents is not valid and binding on the parties
     thereto;

          (c) the Seller or the Originator shall fail to perform or observe any
     other covenant or agreement contained in any of the Transaction Documents
     (except for the obligations described under clause (b) above or clause (f)
     below) and such failure shall continue for a period of 30 days after
     written notice is given to it; provided, however, that, if such failure
     shall be of a nature that it cannot be cured within 30 days, such failure
     shall not constitute an Event of Default hereunder if within such 30-day
     period the Seller or the Originator, as applicable, shall have given notice
     to FSA of corrective action it proposes to take, which corrective action is
     agreed in writing by FSA to be satisfactory and the Seller or the
     Originator, as applicable, shall thereafter pursue such corrective action
     diligently until such default is cured;

          (d) any demand for payment shall be made under the Policy;

          (e) the Seller or the Originator shall fail to pay its debts generally
     as they come due, or shall admit in writing its inability to pay its debts
     generally, or shall make a general assignment for the benefit of creditors,
     or shall institute any proceeding seeking to adjudicate the Seller or the
     Originator insolvent or seeking a liquidation, or shall take advantage of
     any insolvency act, or shall commence a case or other proceeding naming the
     Seller or the Originator as debtor under the United States Bankruptcy Code
     or similar law, domestic or foreign, or a case or other proceeding shall be
     commenced against the Seller or the Originator under the United States
     Bankruptcy Code or similar law, domestic or foreign, or any proceeding
     shall be instituted against the Seller or the Originator seeking
     liquidation of the assets of the Seller or the Originator, as applicable,
     and it shall fail to take appropriate action resulting in the withdrawal or
     dismissal of such proceeding within 30 days or there shall be appointed or
     the Seller or the Originator shall consent to, or acquiesce in, the
     appointment of a receiver, liquidator, conservator, trustee or similar
     official in respect of the Seller or the Originator, as applicable, or the
     whole or

                                       24
<PAGE>

     any substantial part of its properties or assets or the Seller or the
     Originator shall take any corporate action in furtherance of any of the
     foregoing;

          (f) the Backup Servicing Commencement Date contemplated by Section
     1.C. of the Backup Servicer Agreement shall not have occurred prior to
     August 28, 2000, unless FSA gives prior written notice to the Seller, the
     Originator and the Trustee that it does not require the Backup Servicer to
     commence its duties described therein; and

          (g) the occurrence of an "event of default" under any of the
     Transaction Documents or "Servicer Termination Event" under the Pooling and
     Servicing Agreement.

     Section 5.02 Remedies; Waivers. (a) Upon the occurrence of an Event of
Default, FSA may exercise any one or more of the rights and remedies set forth
below:

               (i) exercise any rights and remedies available under the
          Transaction Documents in its own capacity or in its capacity as the
          Person entitled to exercise the rights of the Certificateholders in
          respect of the Certificates; or

               (ii) take whatever action at law or in equity may appear
          necessary or desirable in its judgment to enforce performance of any
          obligation of the Seller or the Originator under the Transaction
          Documents.

          (b) Unless otherwise expressly provided, no remedy herein conferred
     upon or reserved is intended to be exclusive of any other available remedy,
     but each remedy shall be cumulative and shall be in addition to other
     remedies given under the Transaction Documents or existing at law or in
     equity. No delay or failure to exercise any right or power accruing under
     any Transaction Document upon the occurrence of any Event of Default or
     otherwise shall impair any such right or power or shall be construed to be
     a waiver thereof, but any such right and power may be exercised from time
     to time and as often as may be deemed expedient. In order to entitle FSA to
     exercise any remedy reserved to FSA in this Article, it shall not be
     necessary to give any notice, other than such notice as may be expressly
     required in this Article.

          (c) If any proceeding has been commenced to enforce any right or
     remedy under this Agreement and such proceeding has been discontinued or
     abandoned for any reason, or has been determined adversely to FSA, then and
     in every such case the parties hereto shall, subject to any determination
     in such proceeding, be restored to their respective former positions
     hereunder, and, thereafter, all rights and remedies of FSA shall continue
     as though no such proceeding had been instituted.

          (d) FSA shall have the right, to be exercised in its complete
     discretion, to waive any covenant, Default or Event of Default by a writing
     setting forth the terms, conditions and extent of such waiver signed by FSA
     and delivered to the Seller or the Originator, as applicable. Any such
     waiver may only be effected in writing duly executed by FSA, and no other
     course of conduct shall constitute a waiver of any provision hereof. Unless
     such writing expressly provides to the contrary, any waiver so

                                       25
<PAGE>

     granted shall extend only to the specific event or occurrence so waived and
     not to any other similar event or occurrence.

                                  Article VI.

                                  MISCELLANEOUS

     Section 6.01 Amendments, Etc. This Agreement may be amended, modified or
terminated only by written instrument or written instruments signed by the
parties hereto. No act or course of dealing shall be deemed to constitute an
amendment, modification or termination hereof.

     Section 6.02 Notices. All demands, notices and other communications to be
given hereunder shall be in writing (except as otherwise specifically provided
herein) and shall be mailed by registered mail or personally delivered or
telecopied to the recipient as follows:

       (a) To FSA:         Financial Security Assurance Inc.
                           350 Park Avenue
                           New York, NY 10022
                           Attention: Surveillance Department
                           Re: Conseco Finance Home Equity
                               Loan Trust 2000-D
                               Certificates for Home Equity Loans
                           Confirmation:  (212) 826-0100
                           Telecopy Nos.:  (212) 339-3518,  (212) 339-3529

                           (in each case in which notice or other communication
                           to FSA refers to an Event of Default, a claim on the
                           Policy or with respect to which failure on the part
                           of FSA to respond shall be deemed to constitute
                           consent or acceptance, then a copy of such notice or
                           other communication should also be sent to the
                           attention of each of the General Counsel and the
                           Head-Financial Guaranty Group and shall be marked to
                           indicate "URGENT MATERIAL ENCLOSED.")

       (a) To the Seller:  Conseco Finance Securitizations Corp.
                           300 Landmark Towers
                           345 St. Peter Street
                           St. Paul, Minnesota  55102-1639
                           Attention:  Chief Financial Officer
                           Confirmation:
                           Telecopy No.:

                                       26
<PAGE>

       (b) To the Originator:  Conseco Finance Corp.
                               1100 Landmark Towers
                               345 St. Peter Street
                               St. Paul, Minnesota  55102-1639
                               Attention:  Chief Financial Officer
                               Confirmation:
                               Telecopy No.:

          A party may specify an additional or different address or addresses by
     writing mailed or delivered to the other party as aforesaid. All such
     notices and other communications shall be effective upon receipt.

     Section 6.03 Payment Procedure. In the event of any payment by FSA for
which it is entitled to be reimbursed or indemnified as provided above, each of
the Seller and the Originator agrees to accept the voucher or other evidence of
payment as prima facie evidence of the propriety thereof and the liability
therefor to FSA. All payments to be made to FSA under this Agreement shall be
made to FSA in lawful currency of the United States of America in immediately
available funds to the account number provided in the Premium Letter before 1:00
p.m. (New York, New York time) on the date when due or as FSA shall otherwise
direct by written notice to the Seller or the Originator, as applicable. In the
event that the date of any payment to FSA or the expiration of any time period
hereunder occurs on a day which is not a Business Day, then such payment or
expiration of time period shall be made or occur on the next succeeding Business
Day with the same force and effect as if such payment was made or time period
expired on the scheduled date of payment or expiration date. Payments to be made
to FSA under this Agreement shall bear interest at the Late Payment Rate from
the date due to the date paid.

     Section 6.04 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by any party hereto is unavailable or unenforceable shall not affect in
any way the ability of such party to pursue any other remedy available to it.

     Section 6.05 Governing La. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     Section 6.06 Consent to Jurisdiction. (a) THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW YORK LOCATED
IN THE CITY AND COUNTY OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND TO OR IN CONNECTION WITH
ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREUNDER OR
FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY

                                       27
<PAGE>

AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
OR DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW,
IN SUCH FEDERAL COURT. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY
SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND
AGREE NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER OR THAT THE TRANSACTION DOCUMENTS OR THE SUBJECT MATTER THEREOF MAY NOT
BE LITIGATED IN OR BY SUCH COURTS.

          (b) To the extent permitted by applicable law, the parties hereto
     shall not seek and hereby waive the right to any review of the judgment of
     any such court by any court of any other nation or jurisdiction which may
     be called upon to grant an enforcement of such judgment.

          (c) Nothing contained in the Agreement shall limit or affect FSA's
     right to serve process in any other manner permitted by law or to start
     legal proceedings relating to any of the Transaction Documents against the
     Seller or the Originator or any of their property in the courts of any
     jurisdiction.

     Section 6.07 Consent of FSA. In the event that FSA's consent is required
under any of the Transaction Documents, the determination whether to grant or
withhold such consent shall be made by FSA in its sole discretion without any
implied duty towards any other Person, except as otherwise expressly provided
therein.

     Section 6.08 Counterparts. This Ageement may be executed in counterparts by
the parties hereto, and all such counterparts shall constitute one and the same
instrument.

     Section 6.09 Trial by Jury Waived. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH
ANY OF THE TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREUNDER. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT IT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THE TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THIS WAIVER.

     Section 6.10 Limited Liability. (a) No recourse under any Transaction
Document shall be had against, and no personal liability shall attach to, any
officer, employee, director, affiliate

                                       28
<PAGE>

or shareholder of any party hereto, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise in respect of any of the Transaction Documents, the Certificates or
the Policy, it being expressly agreed and understood that each Transaction
Document is solely a corporate obligation of each party hereto, and that any and
all personal liability, either at common law or in equity, or by statute or
constitution, of every such officer, employee, director, affiliate or
shareholder for breaches by any party hereto of any obligations under any
Transaction Document is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Agreement.

     Section 6.11 Entire Agreement. This Agreement, the Premium Letter and the
Policy set forth the entire agreement between the parties with respect to the
subject matter thereof, and this Agreement supersedes and replaces any agreement
or understanding that may have existed between the parties prior to the date
hereof in respect of such subject matter.

                                       29
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement, all as of the day and year first above written.

                                       FINANCIAL SECURITY ASSURANCE INC.

                                       By:  ______________________________
                                            Name:
                                            Title:

                                       CONSECO SECURITIZATIONS FINANCE CORP.

                                       By:  ______________________________
                                       Name:
                                       Title:

                                       CONSECO FINANCE CORP.

                                       By:  ______________________________
                                            Name:
                                            Title:

      [Signature Page to Insurance and Indemnity Agreement: Consceo 2000-D]
<PAGE>

                                   APPENDIX I

                                   DEFINITIONS

     "Accumulated Funding Deficiency" shall have the meaning provided in Section
412 of the Code and Section 302 of ERISA, whether or not waived.

     "Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with, such former
Person. As used in this definition of "Affiliate," the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

     "Backup Servicer" means the party serving as such under the Backup Servicer
Agreement.

     "Backup Servicer Agreement" means the letter agreement dated June 28, 2000
among FSA, the Servicer, the Trustee and Fairbanks Capital Corp.

     "Business Day" means any day other than (a) a Saturday or Sunday or (b) a
day on which banking institutions in the City of New York, New York or St. Paul,
Minnesota are authorized or obligated by law or executive order to be closed.

     "Certificateholders" means registered holders of the Certificates.

     "Certificates" has the meaning provided in the Pooling and Servicing
Agreement.

     "Code" means the Internal Revenue Code of 1986, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.

     "Commission" means the Securities and Exchange Commission.

     "Commonly Controlled Entity" means the Seller, the Originator and each
entity, whether or not incorporated, which is affiliated with the Seller or the
Originator pursuant to Section 414(b), (c), (m) or (o) of the Code.

     "Date of Issuance" means June 28, 2000.

     "Default" means any event which results, or which with the giving of notice
or the lapse of time or both would result, in an Event of Default.

     "Determination Date" has the meaning provided in the Pooling and Servicing
Agreement.

     "ERISA" means the Employee Retirement Income Security Act of 1974,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
<PAGE>

     "Event of Default" means any event of default specified in Section 5.01 of
the Insurance Agreement.

     "Expiration Date" means the final date of the Term of the Policy, as
specified in the Policy.

     "Financial Statements" means with respect to the Seller or the Originator,
each of their consolidated balance sheets as of December 31, 1999 and 1998 and
consolidated statements of income, retained earnings and cash flows for the
12-month period then ended and the notes thereto and each of their balance
sheets as of March 31, 2000 and March 31, 1999 and the statements of income,
retained earnings and cash flows for the fiscal quarter then ended.

     "Fiscal Agent" means the Fiscal Agent, if any, designated pursuant to the
terms of the Policy.

     "FSA" means Financial Security Assurance Inc., a New York stock insurance
company, its successors and assigns.

     "Income Taxes" means any present or future income or franchise taxes now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority or administrative agency, based on the net income of the FSA or
measured by income, gross receipts, assets or capital of FSA.

     "Indemnification Agreement" means the Indemnification Agreement dated as of
June 21, 2000 among FSA, the Seller, the Originator and the Underwriters, as the
same may be amended from time to time.

     "Insurance Agreement" means the Insurance and Indemnity Agreement dated as
of June 1, 2000, among FSA, the Seller and the Originator, as the same may be
amended from time to time.

     "Investment Company Act" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

     "IRS" means the Internal Revenue Service.

     "Issuer" means Conseco Finance Home Equity Loan Trust 2000-D.

     "Late Payment Rate" means the lesser of (a) the greater of (i) the per
annum rate of interest, publicly announced from time to time by The Chase
Manhattan Bank at its principal office in the City of New York, as its prime or
base lending rate (any change in such rate of interest to be effective on the
date such change is announced by The Chase Manhattan Bank) plus 3%, and (ii) the
then applicable highest rate of interest on the Securities and (b) the maximum
rate permissible under applicable usury or similar laws limiting interest rates.
The Late Payment Rate shall be computed on the basis of the actual number of
days elapsed over a year of 360 days.

                                       2
<PAGE>

     "Lien" means, as applied to the property or assets (or the income or
profits therefrom) of any Person, in each case whether the same is consensual or
nonconsensual or arises by contract, operation of law, legal process or
otherwise: (a) any mortgage, lien, pledge, attachment, charge, lease,
conditional sale or other title retention agreement, or other security interest
or encumbrance of any kind or (b) any arrangement, express or implied, under
which such property or assets are transferred, sequestered or otherwise
identified for the purpose of subjecting or making available the same for the
payment of debt or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person.

     "Loan" has the meaning provided in the Pooling and Servicing Agreement.

     "Loan Files" has the meaning provided in the Pooling and Servicing
Agreement.

     "Material Adverse Change" means, (a) in respect of any Person, a material
adverse change in (i) the business, financial condition, results of operations
or properties of such Person or any of its material Subsidiaries or (ii) the
ability of such Person to perform its obligations under any of the Transaction
Documents to which it is a party and (b) in respect of any Loan, a material
adverse change in (i) the value or marketability of such Loan or (ii) the
probability that amounts now or hereafter due in respect of such Loan will be
collected on a timely basis.

     "Moody's" means Moody's Investors Service, Inc., a Delaware corporation,
and any successor thereto, and, if such corporation shall for any reason no
longer perform the functions of a securities rating agency, "Moody's" shall be
deemed to refer to any other nationally recognized rating agency designated by
FSA.

     "Multiemployer Plan" means a multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) in respect of which a Commonly Controlled Entity
makes contributions or has liability.

     "Notice of Claim" means a Notice of Claim and Certificate in the form
attached as Exhibit A to Endorsement No. 1 to the Policy.

     "Offering Document" means the Prospectus dated June 21, 2000 and the
Prospectus Supplement dated June 21, 2000, in respect of the Certificates and
any amendment or supplement thereto and any other offering document in respect
of the Certificates that makes reference to the Policy.

     "Originator" means Conseco Finance Corp., a Delaware corporation.

     "Parent" means Conseco, Inc., an Indiana corporation.

     "PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency, corporation or instrumentality of the United States to which the duties
and powers of the Pension Benefit Guaranty Corporation are transferred.

     "Person" means an individual, joint stock company, trust, unincorporated
association, joint venture, corporation, business or owner trust, partnership or
other organization or entity (whether governmental or private).

                                       3
<PAGE>

     "Plan" means any pension plan (other than a Multiemployer Plan) covered by
Title IV of ERISA, which is maintained by a Commonly Controlled Entity or in
respect of which a Commonly Controlled Entity has liability.

     "Policy" means the financial guaranty insurance policy, including any
endorsements thereto, issued by FSA with respect to the Securities,
substantially in the form attached as Annex I to this Agreement.

     "Pooling and Servicing Agreement" means the Pooling and Servicing Agreement
dated as of June 1, 2000 among the Seller, the Originator and the Trustee on
behalf of FSA and the Certificateholders, pursuant to which the Certificates are
to be issued, as the same may be amended from time to time.

     "Premium" means the premium payable in accordance with Section 3.02 of the
Insurance Agreement.

     "Premium Letter" means the side letter between FSA, the Seller, the
Originator and the Trustee dated the Date of Issuance in respect of the Premium
and any Premium Supplement payable by the Seller and the Originator .

     "Premium Supplement" means a non-refundable premium in addition to the
premium payable in accordance with Section 3.02(d)(i) and (ii) of this
Agreement, which shall automatically accrue to FSA commencing on the Premium
Supplement Commencement Date and be payable on each Payment Date in accordance
with the terms set forth in Section 3.02(d)(iii) of this Agreement.

     "Premium Supplement Commencement Date" means the date of occurrence of an
Event of Default, regardless of whether FSA shall have declared an "Event of
Default" or shall have exercised, or be entitled to exercise, any other rights
or remedies hereunder.

     "Prospectus" means the form of prospectus, as supplemented, relating to the
Certificates, as first filed with the Commission pursuant to Rule 424 under the
Securities Act.

     "Provided Documents" means the Transaction Documents and any documents,
agreements, instruments, schedules, certificates, statements, cash flow
schedules, number runs or other writings or data furnished to FSA by or on
behalf of the Originator with respect to itself, its Parent, its Subsidiaries or
the Transaction.

     "Registration Statement" means the registration statement on Form S-3,
including a form of prospectus, relating to the Certificates, as amended to the
date hereof.

     "Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder.

     "Restrictions on Transferability" means, as applied to the property or
assets (or the income or profits therefrom) of any Person, in each case whether
the same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise, any material condition to, or restriction on, the
ability of such Person or any transferee therefrom to sell,

                                       4
<PAGE>

assign, transfer or otherwise liquidate such property or assets in a
commercially reasonable time and manner or which would otherwise materially
deprive such Person or any transferee therefrom of the benefits of ownership of
such property or assets.

     "Securities" means the $935,000,000 Conseco Finance Home Equity Loan Trust
2000-D Certificates for Home Equity Loans, Class A-1, Class A-2, Class A-3,
Class A-4 and Class A-5, issued pursuant to the Pooling and Servicing Agreement.

     "Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.

     "Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

     "Securityholders" means the registered holders of the Securities.

     "Seller" means Conseco Finance Securitizations Corp., a Delaware
corporation.

     "Servicer" means Conseco Finance Corp., a Delaware corporation.

     "S&P" means Standard & Poor's Ratings Services, a division of McGraw-Hill
Inc., a New York corporation, and any successor thereto, and, if such
corporation shall for any reason no longer perform the functions of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
rating agency designated by FSA.

     "Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other entity of which a majority of
the outstanding capital stock or other equity interests having ordinary voting
power for the election of directors or other persons performing similar
functions is at the time owned or controlled by such Person directly or through
one or more Subsidiaries.

     "Term of the Agreement" shall be determined as provided in Section 4.01 of
the Insurance Agreement.

     "Term of the Policy" has the meaning provided in the Policy.

     "Transaction" means the transactions contemplated by the Transaction
Documents, including the transactions described in the Offering Document.

     "Transaction Documents" means the Insurance Agreement, the Indemnification
Agreement, the Pooling and Servicing Agreement, the Underwriting Agreement and
the Premium Letter.

     "Trigger Event" means the occurrence of any one of the following: (a) an
Event of Default under the Insurance Agreement has occurred and is continuing,
(b) any legal proceeding or binding arbitration is instituted with respect to
the Transaction or (c) any governmental or administrative investigation, action
or proceeding is instituted that has resulted in or has a

                                       5
<PAGE>

material possibility of resulting in a Material Adverse Change in respect of the
Seller or the Originator or of a material portion of the Loans.

     "Trustee" means U.S. Bank Trust National Association, a national banking
association, as trustee under the Pooling and Servicing Agreement, and any
successor thereto as trustee under the Pooling and Servicing Agreement.

     "Trust Fund" has the meaning provided in the Pooling and Servicing
Agreement.

     "Trust Indenture Act" means the Trust Indenture Act of 1939, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.

     "Underfunded Plan" means any Plan that has an Underfunding.

     "Underfunding" means, with respect to any Plan, the excess, if any, of (a)
the present value of all benefits under the Plan (based on the assumptions used
to fund the Plan pursuant to Section 412 of the Code) as of the most recent
valuation date over (b) the fair market value of the assets of such Plan as of
such valuation date.

     "Underwriters" means Lehman Brothers Inc., Credit Suisse First Boston
Corporation, First Union Securities, Inc. and Merrill, Lynch, Pierce, Fenner &
Smith Incorporated.

     "Underwriting Agreement" means the Underwriting Agreement among the
Underwriters, the Seller and the Originator with respect to the offer and sale
of the Securities, as the same may be amended from time to time.

                                       6
<PAGE>

                                   APPENDIX II

                               OPINIONS OF COUNSEL

     There shall be delivered to FSA, S&P and Moody's opinions of counsel as
follows:

          (i) opinions to the effect that the Certificates have been duly
     issued, and the Transaction Documents have been duly executed and
     delivered, and each constitutes legal, valid and binding obligations,
     enforceable in accordance with their respective terms;

          (ii) opinions as to compliance with applicable securities laws,
     including, but not limited to, opinions to the effect that:

               (A) to the best of counsel's knowledge, no filing or registration
          with or notice to or consent, approval, authorization or order of any
          court or governmental authority or agency is required for the
          consummation of the Transaction, except such as may be required and
          have been obtained under the Securities Act and state securities or
          "blue sky" laws;

               (B) the Registration Statement is effective under the Securities
          Act and, to the best of counsel's knowledge and information, no stop
          order suspending the effectiveness of the Registration Statement has
          been issued under the Securities Act or proceedings therefor initiated
          or threatened by the Commission; and

               (C) neither the Issuer not the Trust Fund is required to be
          registered under the Investment Company Act.

          (iii) an opinion to the effect that (A) the Issuer is the owner of the
     Loans, holding good and marketable title thereto; (B) the Loans would not
     be included as part of the estate of the Seller in the event of any
     receivership or insolvency proceedings in respect thereof; and (C) the
     transfer of the Loans would be characterized by a court of competent
     jurisdiction as a sale of such Loans and not as a borrowing by the Seller
     or a relationship of joint ownership, partnership, joint venture or similar
     arrangement;

          (iv) an opinion to the effect that the transfer of the Loans to the
     Issuer does not constitute either a fraudulent conveyance or a preferential
     transfer by the Seller;

          (v) an opinion to the effect that the Securities will be characterized
     as evidence of ownership of the "regular interests" in the assets of the
     Issuer comprising a REMIC under the Code and for Minnesota income and
     franchise tax purposes the Issuer will not be subject to tax.
<PAGE>

                                     ANNEX I
                                       TO
                        INSURANCE AND INDEMNITY AGREEMENT

                   FORM OF FINANCIAL GUARANTY INSURANCE POLICY
<PAGE>

                                   APPENDIX A
                      TO INSURANCE AND INDEMNITY AGREEMENT

                 CONDITIONS PRECEDENT TO ISSUANCE OF THE POLICY

     (a) Payment of Initial Premium and Expenses; Premium Letter. FSA shall have
been paid, by or on behalf of Seller or the Originator, as applicable, a
nonrefundable Premium and shall have been reimbursed, by or on behalf of the
Originator, for other fees and expenses identified in Section 3.02 as payable at
closing and FSA shall have received a fully executed copy of the Premium Letter.

     (b) Transaction Documents. FSA shall have received a copy of each of the
Transaction Documents, in form and substance satisfactory to FSA, duly
authorized, executed and delivered by each party thereto. Without limiting the
foregoing, the provisions of the Pooling and Servicing Agreement relating to the
payment to FSA of Premium due on the Policy and the reimbursement to FSA of
amounts paid under the Policy shall be in form and substance acceptable to FSA
in its sole discretion.

     (c) Certified Documents and Resolutions. FSA shall have received a copy of
(i) the Certificate of Incorporation and Bylaws of each of the Seller and the
Originator and any organizational document of the Issuer and (ii) the
resolutions of the Seller's and the Originator's Boards of Directors and proper
evidence of necessary trust action by the Issuer, in each case authorizing the
issuance of the Certificates and the execution, delivery and performance by the
Seller and the Originator, as applicable, of the Transaction Documents and the
transactions contemplated thereby, certified by the Secretary or an Assistant
Secretary of each of the Seller and the Originator (which certificates shall
state that the related Certificate of Incorporation, Bylaws, resolutions and
other items are in full force and effect without modification on the Date of
Issuance).

     (d) Incumbency Certificate. FSA shall have received a certificate of the
Secretary or an Assistant Secretary of each of the Seller and the Originator
certifying the name and signatures of the officers of the Seller and the
Originator authorized to execute and deliver the Transaction Documents and that
shareholder consent to the execution and delivery of such documents is not
necessary.

     (e) Representations and Warranties; Certificate. The representations and
warranties of the Seller and the Originator in the Insurance Agreement shall be
true and correct as of the Date of Issuance as if made on the Date of Issuance
and FSA shall have received certificates of appropriate officers of the Seller
and of the Originator to that effect.

     (f) Opinions of Counsel. FSA shall have received opinions of counsel
addressed to FSA, S&P and Moody's in respect of the Seller, the Originator, the
other parties to the Transaction Documents and the Transaction in form and
substance satisfactory to FSA, addressing such matters as FSA may reasonably
request, including without limitation, the items set forth in Appendix II
hereto, and the counsel providing each such opinion shall have been instructed
by its client to deliver such opinion to the addressees thereof.
<PAGE>

     (g) Approvals, Etc. FSA shall have received true and correct copies of all
approvals, licenses and consents, if any, including, without limitation, the
approval of the shareholders of the Seller and the Originator, required in
connection with the Transaction.

     (h) No Litigation, Etc. No suit, action or other proceeding, investigation,
or injunction or final judgment relating thereto, shall be pending or threatened
before any court or governmental agency in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with any of the
Transaction Documents or the consummation of the Transaction.

     (i) Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court which would make the transactions contemplated by
any of the Transaction Documents illegal or otherwise prevent the consummation
thereof.

     (j) Satisfaction of Conditions of Underwriting Agreement. All conditions in
the Underwriting Agreement to the Underwriter's obligation to purchase the
Securities shall have been satisfied.

     (k) Issuance of Ratings. FSA shall have received confirmation that the risk
secured by the Policy constitutes an investment grade risk by S&P and an
insurable risk by Moody's and that the Securities, when issued, will be rated
"AAA" by S&P and "Aaa" by Moody's.

     (l) Delivery of Loan Files. FSA shall have received evidence satisfactory
to it that: (i) delivery has been made to the Trustee of the Loan Files required
to be so delivered pursuant to Section 4.01(a) of the Pooling and Servicing
Agreement; and (ii) each such instrument is endorsed as necessary to permit the
true and timely delivery under the Pooling and Servicing Agreement of the
certificate in the form of Exhibit D to the Pooling and Servicing Agreement.

     (m) Retention of Backup Servicer. The Seller and the Originator shall have
entered into the Backup Servicer Agreement; and

     (m) No Default. No Default or Event of Default shall have occurred.

     (n) Additional Items. FSA shall have received such other documents,
instruments, approvals or opinions requested by FSA as may be reasonably
necessary to effect the Transaction, including but not limited to evidence
satisfactory to FSA that all conditions precedent, if any, in the Transaction
Documents have been satisfied.

                                      A-2NEITHER THE  WARRANTS  REPRESENTED  BY THIS  WARRANT  CERTIFICATE  NOR ANY
      SHARES  ACQUIRED UPON THE EXERCISE OF SUCH  WARRANTS HAVE BEEN  REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY OTHER SECURITIES LAWS,
      NOR MAY SUCH WARRANTS OR SHARES BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED
      OF IN THE ABSENCE OF SUCH  REGISTRATION  OR AN EXEMPTION  THEREFROM  UNDER
      SUCH ACT OR OTHER LAWS.  THIS  WARRANT AND SUCH SHARES MAY BE  TRANSFERRED
      ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.

                                 DIRECTRIX, INC.
                          Common Stock Purchase Warrant

No.                                                                   X Warrants

                NOT EXERCISABLE AFTER THE DATES SPECIFIED HEREIN

         THIS  WARRANT  CERTIFICATE  CERTIFIES THAT ("Holder"),   or  registered
assigns, is the registered holder of the number of warrants (the "Warrants") set
forth above,  each of which entitles such holder  hereof,  subject to the terms,
provisions and conditions set forth herein, to purchase from Directrix,  Inc., a
Delaware corporation (the "Company"), prior to 10 years from the date hereof and
upon the  occurrence of certain events as provided in Section 1(a) hereof at the
principal office of the Company or such other location designated by the Company
in accordance with the terms set forth herein, one fully paid and non-assessable
share of the Common  Stock of the  Company,  par value  $.01 per share  ("Common
Stock"),  upon  presentation and surrender of this Warrant  Certificate with the
Form of Election to Purchase  attached  hereto duly executed and payment in full
(in cash or by certified or official bank or bank cashier's check payable to the
order  of  the  Company)  of the  applicable  Purchase  Price  as to  which  the
Warrant(s) represented by the Warrant Certificate are exercised,  all subject to
the terms,  provisions and conditions hereof.  The Warrants  represented by this
Certificate  are  being  issued  in  consideration  of acting as a lender to the
Company in connection with the Amended and Restated Loan and Security Agreement,
dated as of February 16, 2000 (the "Loan  Agreement"),  by and among the Company
and the persons  whose names and  addresses  appear on  Schedule  1.01  attached
thereto.

         The  rights  of  the  holder  of  this  Warrant  Certificate  shall  be
subject to the following further terms and conditions:

         SECTION 1.  EXERCISE OF WARRANTS; PURCHASE PRICE.
            (a) Subject to the provisions of Section 6(d) hereof, the registered
holder of this Warrant  Certificate may exercise the Warrants  evidenced hereby,
in whole or in part,  at any time  prior to 5:00 p.m.,  New York City  time,  on
February 15, 2010 (the "Final Expiration Date"),  upon surrender of this Warrant
Certificate,  with  the  Form of  Election  to  Purchase  attached  hereto  duly
executed,  to the  Company at its office  maintained  pursuant  to Section  2(b)
hereof,  together  with payment of the  Purchase  Price for each share of Common
Stock as to which the Warrants are exercised.  Each warrant not exercised  prior
to 5:00 p.m., New York City time, on the Final Expiration Date shall become void
and all rights thereunder shall cease as of such time.

            (b) The  purchase  price for each  share of Common  Stock  purchased
pursuant to the  exercise of a Warrant  shall be $0.01 (the  "Purchase  Price");
provided,  however,  that the Purchase Price shall be subject to adjustment from
time to time as provided in Section 8 hereof. The aggregate Purchase Price shall
be payable in cash or by  certified  or official  bank or bank  cashier's  check
payable to the order of the Company,  or by any other means  consented to by the
Company.

            (c)  Upon   receipt  of  this   Warrant   Certificate   representing
exercisable  Warrants,  with the Form of  Election to  Purchase  duly  executed,
accompanied  by payment  of the  aggregate  Purchase  Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of this Warrant  Certificate in accordance  with Section 6 hereof,
the Company shall thereupon promptly (i) cause to be issued to the holder hereof
the Common Stock  certificates for the number of whole shares of Common Stock to
be purchased and (ii) when appropriate,  pay to the registered holder hereof, in
lieu of the issuance of fractional  shares to which such holder would  otherwise
be entitled, an amount in cash in accordance with Section 11 hereof.

            (d) If the  registered  holder  of this  Warrant  Certificate  shall
exercise less than all the Warrants evidenced hereby, a new Warrant  Certificate
evidencing  Warrants  equivalent to the Warrants remaining  unexercised shall be
issued by the Company to the registered holder of this Warrant Certificate or to
his duly authorized assigns, subject to the provisions of Section 11 hereof.

         SECTION 2.  SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES.
            (a) Subject to the  provisions of Section 11 hereof,  at or prior to
the Final  Expiration  Date this  Warrant  Certificate,  with or  without  other
Warrant Certificates, may be split up, combined or exchanged for another Warrant
Certificate or Warrant Certificates, entitling the registered holder to purchase
a like number of shares of Common  Stock as the Warrant  Certificate  or Warrant
Certificates  surrendered then entitled such holder to purchase.  Any registered
holder desiring to split up, combine or exchange this Warrant  Certificate shall
make such request in writing  delivered to the Company,  and shall surrender the
Warrant  Certificate  or  Warrant  Certificates  to be  split  up,  combined  or
exchanged at the office of the Company  maintained for such purpose as set forth
below.  Thereupon  the  Company  shall sign and  deliver to the person  entitled
thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so
requested.  The  Company may require  payment of a sum  sufficient  to cover any
transfer tax that may be imposed in connection with any split-up, combination or
exchange of Warrant Certificates.

         Upon receipt by the  Company  of  evidence  reasonably  satisfactory to
it of the loss, theft, destruction or mutilation of a Warrant Certificate,  and,
in case of loss,  theft or  destruction,  of  indemnity  or security  reasonably
satisfactory to it and  reimbursement to the Company of all reasonable  expenses
incidental  thereto,   and  upon  surrender  and  cancellation  of  the  Warrant
Certificate  if  mutilated,  the  Company  will make and  deliver a new  Warrant
Certificate  of like  tenor  to the  registered  owner  in  lieu of the  Warrant
Certificate so lost, stolen, destroyed or mutilated.

            (b) The  Company  will  maintain  an office  (which may be an agency
maintained  at a bank) in the City of New  York in the  State of New York  where
notices,  presentations  and demands in respect of any Warrants may be made upon
it and where it will  maintain the Warrant  register  upon which  transfers  and
exchanges of Warrants  shall be recorded.  Such office  shall be  maintained  AT
DIRECTRIX,  INC.,  236 WEST 26TH Street,  12th Floor,  New York, New York 10001,
until such time as the Company  shall  notify the holders of the Warrants of any
change of location of such office.

         SECTION 3.  SUBSEQUENT  ISSUE  OF WARRANT  CERTIFICATES.  Subsequent to
their  original  issuance,  no Warrant  Certificates  shall be issued except (a)
Warrant Certificates issued upon any transfer, combination, split-up or exchange
of Warrants pursuant to the terms, conditions and provisions hereof, (b) Warrant
Certificates  issued in  replacement  of  mutilated,  destroyed,  lost or stolen
Warrant  Certificates  pursuant to Section 2 hereof,  (c)  Warrant  Certificates
issued pursuant to Section 1(d) hereof upon the partial  exercise of any Warrant
Certificate to evidence the unexercised portion of such Warrant Certificate, (d)
Warrant  Certificates  issued  pursuant  to Section  8(e) hereof and (e) Warrant
Certificates issued pursuant to Section 14 hereof.

         SECTION 4.  CANCELLATION  AND  DESTRUCTION OF WARRANT Certificates. All
Warrant  Certificates  surrendered  for  the  purpose  of  exercise,   exchange,
substitution,  transfer,  split-up  or  combination  shall be  cancelled  by the
Company,  and no Warrant  Certificates shall be issued in lieu thereof except as
expressly  permitted by any of the provisions of this Warrant  Certificate.  The
Company  shall  cancel and retire any other  Warrant  Certificates  purchased or
acquired by the Company otherwise than upon the exercise thereof.

         SECTION 5.  OWNERSHIP; RESTRICTIONS ON TRANSFER; REGISTRATION OF
TRANSFERS.
            (a) Except as  otherwise  permitted  by this Section 5, each Warrant
Certificate (including each Warrant Certificate issued upon the transfer of such
Warrant  Certificate)  shall be stamped or otherwise  imprinted  with legends in
substantially the following form:

            "Neither the Warrants  represented by this Warrant  Certificate  nor
            any shares  acquired  upon the exercise of such  Warrants  have been
            registered under the Securities Act of 1933, as amended or any other
            securities laws nor may such Warrants or shares be transferred, sold
            or otherwise  disposed of in the absence of such  registration or an
            exemption  therefrom  under such act or other laws. This Warrant and
            such  shares  may  be  transferred   only  in  compliance  with  the
            conditions specified in this Warrant."

            (b) Except as otherwise  permitted by this Section 5, and subject to
the terms of a Registration  Rights Agreement of even date herewith by and among
the Company,  Holder,  Leland Nolan and Donald  McDonald,  each  certificate for
Common Stock (or other securities) issued upon the exercise of this Warrant, and
each  certificate  issued upon the  transfer of any such Common  Stock (or other
securities),   shall  be  stamped  or  otherwise  imprinted  with  a  legend  in
substantially the following form:

            "The shares represented by this certificate have not been registered
            under the Securities Act of 1933, as amended or any other securities
            laws and may not be  transferred,  sold or otherwise  disposed of in
            the absence of such  registration  or an exemption  therefrom  under
            such Act or other  laws.  Such  shares may be  transferred,  sold or
            otherwise  disposed  of  only  in  compliance  with  the  conditions
            specified in the Common Stock Purchase Warrants issued by Directrix,
            Inc.  A complete  and  correct  copy of the form of such  Warrant is
            available for inspection at the principal office of Directrix,  Inc.
            or at the office or agency maintained by Directrix, Inc. as provided
            in such  Warrants and will be furnished to the holder of such shares
            upon written request and without charge."

            (c) Prior to any  transfer  of any Warrant  Certificate  that is not
registered under an effective registration statement under the Securities Act of
1933 (the "Securities  Act"), the holder thereof will give written notice to the
Company of such holder's  intention to effect such transfer and to comply in all
other  respects with this Section 5. Each such notice shall  describe the manner
and  circumstances  of the  proposed  transfer  in  sufficient  detail to enable
counsel to render the opinion referred to below.

         If, in the opinion of counsel for the  Company, the  proposed  transfer
may not be legally  effected  without  registration  of such Warrants  under the
Securities  Act,  the Company  will  promptly  so notify the holder  thereof and
thereafter  such holder  shall not be entitled to transfer  such  Warrant  until
either (x) receipt by the Company of a further notice from such holder  pursuant
to the foregoing  provisions of this Section 5 and fulfillment of the provisions
of this Section 5 or (y) such Warrants have been  effectively  registered  under
the Securities Act.

         If,  in the opinion of counsel for the Company,  the proposed  transfer
may be effected without  registration of such Warrants under the Securities Act,
such  holder  shall  thereupon  be  entitled  to  transfer  such  securities  in
accordance with the terms of the notice delivered by such holder to the Company.
Each Warrant  Certificate  issued upon or in connection with such transfer shall
bear the restrictive  legends  required by this Section 5, unless in the opinion
of such counsel, such restrictive legends are not required or advisable.

            (d)  The   restrictions   imposed   by  this   Section  5  upon  the
transferability  of the  Warrants  or the  underlying  shares  of  Common  Stock
relating to the registration of securities under the Securities Act set forth in
clauses  (b) and (c) of this  Section  5 shall  terminate  as to any  particular
Warrants or the  underlying  shares of Common  Stock,  (x) when such  securities
shall  have  been  effectively  registered  and sold or  distributed  under  the
Securities Act, (y) when, in the opinion of both counsel for the Company and the
holder  (each of whom shall be  experienced  in  securities  law  matters),  any
restrictions  cease or are permitted to terminate  under  applicable  securities
law,  or (z) when,  in the  opinion of  counsel  for the  Company  (who shall be
experienced in securities law matters), such restrictions are no longer required
in order to insure  compliance  with the Securities Act or any other  applicable
securities  law,  whichever is earliest.  Whenever any such  restrictions  shall
cease and terminate as to any Warrants or the underlying shares of Common Stock,
the holder  thereof  shall be  entitled  to receive  from the  Company,  without
expense  (other  than  applicable  transfer  taxes,  if any),  new  Warrants  or
certificates  of like  tenor  not  bearing  the  applicable  legends  previously
required by this Section 5.

         SECTION 6.  RESERVATION AND AVAILABILITY OF SHARES OF COMMON STOCK.
            (a) The Company will cause to be reserved and kept  available out of
its authorized and unissued  shares of Common Stock or its authorized and issued
shares of Common  Stock  held in its  treasury,  the  number of shares of Common
Stock that will be sufficient to permit the exercise in full of all  outstanding
Warrants.  The transfer agent for the Common Stock,  if any, will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be required  for such  purpose.  The  Company  will keep a copy of this
Warrant on file with each transfer agent.  The Company will furnish the transfer
agent a copy of all notices of adjustments  and  certificates  related  thereto,
transmitted  to each  holder  of a Warrant  Certificate  pursuant  to  Section 8
hereof.

            (b) So long as the  Common  Stock  issuable  upon  the  exercise  of
Warrants may be listed on any  national  securities  exchange,  the Nasdaq Stock
Market or the over-the-counter market, the Company shall use its best efforts to
cause all shares  reserved for such  issuance to be listed as  expeditiously  as
possible on such exchange or market upon  official  notice of issuance upon such
exercise.

            (c) The  Company  will take all such action as may be  necessary  to
ensure  that all shares of Common  Stock  delivered  upon  exercise  of Warrants
shall, at the time of delivery of the  certificates  for such shares (subject to
payment of the Purchase  Price),  be duly and validly  authorized and issued and
fully paid and nonassessable shares.

            (d) The  Company  will pay when due and  payable any and all federal
and state  transfer  taxes and  charges  which may be  payable in respect of the
initial issuance or delivery of this Warrant  Certificate or of the issuance and
delivery of any shares of Common Stock upon the exercise of Warrants,  except as
set forth in the immediately following sentence. The Company shall not, however,
be  required  to pay any tax which may be payable in respect of any  transfer or
delivery of this Warrant  Certificate to a person other than, or the issuance or
delivery  of  certificates  for  Common  Stock in a name other than that of, the
registered holder of the Warrant Certificate evidencing Warrants surrendered for
exercise or to issue or deliver any certificates for shares of Common Stock upon
the exercise of any  Warrants  until any such tax shall have been paid (any such
tax being  payable  by the  holder of such  Warrant  Certificate  at the time of
surrender) or until it has been established to the Company's  satisfaction  that
no such tax is due.

         SECTION 7.   COMMON  STOCK  RECORD DATE.  Each person in whose name any
certificate  for shares of Common  Stock is issued upon the exercise of Warrants
shall for all  purposes  be deemed to have  become  the  holder of record of the
Common Stock  represented  thereby on, and such certificate  shall be dated, the
close of business on the date upon which the Warrant Certificate evidencing such
Warrants  was duly  surrendered  and  payment  of the  Purchase  Price  (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender  and payment is a date upon which the Common Stock  transfer  books of
the Company are  closed,  such person  shall be deemed to have become the record
holder of such shares on, and such  certificate  shall be dated,  the opening of
business on the next succeeding  business day on which the Common Stock transfer
books of the Company are open.

         SECTION 8.  ADJUSTMENT  OF  PURCHASE PRICE,  NUMBER OF SHARES OR NUMBER
OF WARRANTS. The Purchase Price, the number of shares of Common Stock covered by
each Warrant and the number of Warrants  outstanding  are subject to  adjustment
from time to time as provided in this Section 8.

            (a) In case the Company shall at any time after the date hereof, (i)
effect a distribution to all holders of its outstanding Common Stock payable  in
shares of Common Stock, (ii)subdivide the outstanding Common Stock, (iii)combine
the outstanding Common Stock into a smaller number of shares of Common Stock  or
(iv) issue any  securities of the Company in a  reclassification  of the  Common
Stock (including  any such  reclassification  in connection with a consolidation
or merger in which the Company is the  continuing or surviving corporation other
than a  consolidation  or  merger  in  respect  of which an  adjustment  is made
pursuant  to Section 10  hereof),  the  number and kind of  securities  issuable
commencing on the record date for such  distribution  or the  effective  date of
such  subdivision,  combination  or  reclassification  shall be  proportionately
adjusted  so that the holder of any Warrant  exercised  after such time shall be
entitled to receive upon exercise of the Warrant the  aggregate  number and kind
of securities  which,  if such Warrant had been exercised  immediately  prior to
such date and at a time when the Common Stock transfer books of the Company were
open,  he would have owned upon such  exercise  and been  entitled to receive by
virtue of such distribution,  subdivision, combination or reclassification. Such
adjustment  shall be made  successively  whenever  any event  listed above shall
occur.  Notwithstanding the foregoing,  if a warrant is exercised  subsequent to
the record date, if any, but prior to the relevant  distribution date or payment
date, the Company shall not be required to make any such payment or distribution
pursuant  to this  subsection  (a) to the holder of such  warrant  prior to such
payment or  distribution  date, but shall make such payment or  distribution  on
such date.

            (b) No adjustment  in the  Purchase  Price shall be  required unless
such adjustment  would  require an increase or decrease  of at least 1%  in such
price; PROVIDED, HOWEVER, that any adjustments which by  reason of this  Section
8(b) are not required to be made shall be carried forward and taken into account
in any subsequent  adjustment.  All calculations  under this Section 8 shall  be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.

            (c) In the event that at any time, as a result of an adjustment made
pursuant to Section 8(a) hereof, the holder of any Warrant thereafter  exercised
shall become entitled to receive any securities of the Company other than shares
of Common Stock,  thereafter  the number of such other  securities so receivable
upon exercise of any Warrant shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect  to the  shares of Common  Stock  contained  in  Section  8(a),  and the
provisions  of Sections 1, 6, 7, 10 and 15 hereof with  respect to the shares of
Common Stock shall apply on like terms to any such other securities.

            (d) Upon each adjustment of the number of shares of Common Stock for
which  the Warrants are  exercisable  as  provided in  Section 8(a) hereof,  the
Purchase Price payable upon exercise of a Warrant shall be adjusted by multiply-
ing such Purchase  Price  immediately  prior to such  adjustment  by a  fraction
(i) the numerator  of which  shall be the  number of shares of Common  Stock for
which a Warrant was exercisable prior to such adjustment and (ii)the denominator
of which  shall be the  number of shares  of Common Stock for which a Warrant is
exercisable immediately thereafter.

            (e) The Company  may elect on or after the date of any adjustment of
the Purchase  Price to  adjust  the  number of Warrants, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Warrant.  Each Warrant  outstanding  after such adjustment of the number of
Warrants shall be exercisable  for the same number of shares of Common Stock for
which such Warrant was exercisable  prior to such adjustment.  Each Warrant held
of record prior to such  adjustment of the number of Warrants  shall become that
number of Warrants  (calculated to the nearest  hundredth)  obtained by dividing
the Purchase  Price in effect  immediately  prior to  adjustment of the Purchase
Price by the Purchase  Price in effect after  adjustment of the Purchase  Price.
The  Company  shall make a public  announcement  of its  election  to adjust the
number of Warrants, indicating the record date for the adjustment, and, if known
at the time,  the amount of the  adjustment to be made.  This record date may be
the date on which the  Purchase  Price is  adjusted or any day  thereafter,  but
shall be at least ten days later than the date of the public announcement.  Upon
each  adjustment of the number of Warrants  pursuant to this Section  8(e),  the
Company shall, as promptly as practicable, cause to be distributed to holders of
record  of  Warrant  Certificates  on  such  record  date  Warrant  Certificates
evidencing, subject to Section 11, the additional Warrants to which such holders
shall be  entitled  as a result of such  adjustment,  or,  at the  option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Warrant  Certificates  held by such holders prior to the
date of adjustment,  and upon surrender thereof, if required by the Company, new
Warrant Certificates  evidencing all the Warrants to which such holders shall be
entitled after such adjustment.  Warrant Certificates so to be distributed shall
be issued,  executed  and  countersigned  in the manner  provided for herein and
shall  be  registered  in  the  names  of  the  holders  of  record  of  Warrant
Certificates on the record date specified in the public announcement.

            (f)Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Warrants,
the Warrant  Certificates  may continue to express the Purchase  Price per share
and  the  number  of  shares  which  were  expressed  upon  the  initial Warrant
Certificates issued hereunder.

            (g) Before taking any action that would cause an adjustment reducing
the Purchase  Price below the then par value,  if any, of the  shares of  Common
Stock  issuable  upon  exercise of  the  Warrants,  the Company  shall take  any
corporate action which may, in the opinion of its counsel, be necessary in order
that the  Company may  validly and  legally  issue fully paid and  nonassessable
shares of such Common Stock at such adjusted Purchase Price.

            (h) Anything in this Section 8 to the contrary notwithstanding,  the
Company  shall  be entitled  to make  such  reductions in the Purchase Price, in
addition  to those  adjustments  required  by  this Section 8, as it in its sole
discretion shall determine to be  advisable in order  that any  consolidation or
subdivision of the Common  Stock,  issuance  wholly for cash of any Common Stock
at less than the current market price, issuance  wholly for cash of Common Stock
or securities  which by their terms are  convertible  into or  exchangeable  for
Common  Stock, dividends on  Common Stock payable in Common Stock or issuance of
rights, options or warrants referred to in this Section 8, hereafter made by the
Company to its common stockholders, shall not be taxable to them.

         SECTION  9.  CERTIFICATE  OF  ADJUSTED  PURCHASE  PRICE OR NUMBER OF
SHARES.  Whenever an  adjustment  is made as provided in Section 8 hereof (other
than  situations in which no adjustment is required  pursuant to Section  8(b)),
the Company  shall  promptly  cause  written  notice  thereof to be sent to each
holder of a Warrant  Certificate  in  accordance  with Section 16 hereof,  which
notice  shall be  accompanied  by an  officer's  certificate  setting  forth the
Purchase  Price as so adjusted,  the number of shares of Common  Stock  issuable
upon the exercise of each  Warrant as so adjusted  and a brief  statement of the
facts  accounting  for such  adjustment.  The  Company  will keep copies of such
certificate  at its office  maintained  pursuant to Section 2(b) hereof and will
cause the same to be  available  for  inspection  at such office  during  normal
business hours by any holder of a Warrant.

         SECTION 10.  CONSOLIDATION,  MERGER  OR SALE OF ASSETS.  If the Company
shall at any time consolidate with or merge with and into another corporation or
shall  sell or  transfer  to  another  entity  all or  substantially  all of the
property of the  Company,  the holder of any Warrant  will  thereafter  have the
right to receive,  upon the exercise  thereof in accordance  with and subject to
the terms of this Warrant, the securities,  cash and other property to which the
holder of the number of shares of Common Stock  purchasable (at the time of such
consolidation, merger, sale or transfer) upon the exercise of such Warrant would
have been entitled upon such consolidation,  merger,  sale or transfer,  if any.
The Company shall take such steps in connection with such consolidation, merger,
sale or transfer, as may be necessary to assure that the provisions hereof shall
thereafter be  applicable,  as nearly as  reasonably  may be, in relation to any
securities or property (including cash) thereafter deliverable upon the exercise
of the  Warrants.  The Company,  the  successor  corporation  or the  purchasing
entity,  as the case  may be,  shall  execute  and  deliver  to the  Company  an
agreement so providing.  The provisions of this Section 10 shall similarly apply
to successive mergers or consolidations or sales or other transfers.

         SECTION 11.  FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
            (a)  The  Company  shall  not be  required  to  issue  fractions  of
Warrants  or  to  distribute  Warrant  Certificates  which  evidence  fractional
Warrants.  Subject to Section 11(d) hereof, in lieu of such fractional Warrants,
there  shall be paid to each  registered  holder of a Warrant  Certificate  with
regard to which a fractional  Warrant would otherwise be issuable,  an amount in
cash equal to the same fraction of the current  market value of a whole Warrant.
For the  purposes of this  Section  11(a),  the current  market value of a whole
Warrant shall be the closing price of the Warrant (as determined pursuant to the
second sentence of Section 11(c) hereof) for the Trading Day  immediately  prior
to the date on which such fractional Warrant would have been otherwise issuable.
If on any such  Trading Date the  Warrants  were not publicly  held or listed or
traded in a manner  described under the second sentence of Section 11(c) hereof,
the  current  market  value of a whole  Warrant  shall be the fair  value of the
Warrants  on such  Trading  Date as  determined  in good  faith by the  Board of
Directors of the Company, whose determination shall be conclusive.

            (b) The Company  shall not be required to issue  fractions of shares
of Common  Stock upon  exercise of the  Warrants or to  distribute  certificates
which evidence  fractional  shares.  Subject to Section 11(d) hereof, in lieu of
such fractional  shares of Common Stock,  there shall be paid to each registered
holder of a Warrant  Certificate  with regard to which a fractional  share would
otherwise  be issuable at the time such  Warrant  Certificate  is  exercised  as
herein  provided,  an amount in cash equal to the same  fraction  of the current
market value of a share of Common Stock. For purposes of this Section 11(b), the
current  market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined  pursuant to the second sentence of Section
11(c)) for the Trading Day immediately prior to the date of such exercise. If on
such Trading Date the Common Stock was not publicly  held or listed or traded in
a manner  described  under the second  sentence  of Section  11(c)  hereof,  the
current  market  value of a share of Common  Stock  shall be the fair value of a
share of Common Stock as  determined  in good faith by the Board of Directors of
the Company, whose determination shall be conclusive.

            (c) For the purpose of any  computation required in accordance  with
this Section 11, the "current market price per share" of any security, including
the Common Stock (a "Security" for the purpose of this Section  11(c),  on  any
date shall  be  deemed to be the  average of the daily  closing  prices (as such
term is hereinafter  defined) per share of such Security for the 20  consecutive
Trading Days (as such  term is  hereinafter  defined)  immediately prior to such
date; PROVIDED,  HOWEVER,  that in the event  that the current market price  per
share of the Security is determined during a period  following the  announcement
by  the  issuer  of  such Security  of (i) a dividend  or  distribution  on such
Security payable in shares of such Security or securities convertible  into such
shares,  or  (ii)  any  subdivision,  combination  or  reclassification  of such
Security and prior to the  expiration of 30  consecutive  Trading Days after the
ex-dividend  date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then,  and in  each such case, the
current market price per share shall be  appropriately  adjusted to reflect  the
current  market price per share equivalent of such Security. The "closing price"
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,regular
way,  in either  case as  reported  in the  principal  consolidated  transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Security is not listed or admitted to trading
on  the  New  York  Stock  Exchange,  as reported in the principal  consolidated
transaction reporting  system with respect to securities listed on the principal
national securities  exchange on which the  Security  is  listed or  admitted to
trading or, if the Security is not listed or admitted to trading on any national
securities exchange,  as  reported by the Nasdaq  Stock  Market,  or  if not  so
listed, the average of the high bid and low asked prices in the over-the-counter
market, as reported in the Wall  Street  Journal,  or, if on  any such  date the
Security is not quoted by any such organization, the average of the closing  bid
and asked prices as  furnished  by a  professional  market maker making a market
in the Security selected  by the  Board of  Directors  of the  Company.  If  the
Security is not publicly held or so listed or traded, "current market  price per
share" shall mean the fair value of the Security as  determined in good faith by
the Board of Directors of the Company, whose determination  shall be conclusive.
The term "Trading  Day"  shall  mean a  day  on  which  the  principal  national
securities exchange on which the  Security is listed or  admitted to  trading is
open  for  the  transaction  of  business  or,  if the Security is not listed or
admitted to trading on any national  securities  exchange,  a Business Day.  The
term "Business Day" shall mean any day other than a Saturday, a Sunday, or a day
on  which  banking  institutions  in  the  State  of  New York are authorized or
obligated  by law or executive order to close.

            (d) If the  Company  is  unable  to  pay  any  amounts  of  cash  to
registered holders of Warrant  Certificates in respect of fractional Warrants or
fractional  shares of  Common  Stock in  accordance  with  Section  11(a) or (b)
hereof,  as the case may be, by reason of the  provisions of the Company's  then
outstanding  debt  obligations  or otherwise,  the Company shall deliver to such
holders an additional  whole  Warrant or share of Common Stock,  as the case may
be, in lieu of such fractional Warrants or shares.

            (e) The  holder of a  Warrant,  by the  acceptance  of the  Warrant,
expressly  waives his right to receive any fractional  Warrant or any fractional
share upon exercise of a Warrant.

         SECTION 12.  RIGHT OF ACTION; NO ENTITLEMENT TO VOTE OR RECEIVE
DIVIDENDS.
            (a) Any registered holder of this Warrant  Certificate,  without the
consent of the holder of any other Warrant  Certificate,  may, in his own behalf
and for his own  benefit,  enforce,  and may  institute  and  maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Warrants evidenced by this Warrant  Certificate in
the manner provided herein.

            (b) Prior to the exercise of the Warrants  evidenced  hereby and the
date of the  certificate  representing  the shares of Common Stock issuable upon
exercise  of such  Warrants  pursuant  to  Section 7 hereof,  the holder of this
Warrant  Certificate,  as  such,  shall  not  be  entitled  to any  rights  of a
stockholder  of the  Company  with  respect to, or be deemed for any purpose the
holder  of,  shares  for which the  Warrants  shall be  exercisable,  including,
without  limitation,  the  right  to  vote or to  receive  dividends,  or  other
distributions,  and  shall  not  be  entitled  to  receive  any  notice  of  any
proceedings of the Company, except as provided herein.

         SECTION 13. AGREEMENT OF WARRANT  CERTIFICATE  HOLDERS.   Every  holder
of this Warrant Certificate, by accepting the same, consents and agrees with the
Company  and with  every  other  holder  of a Warrant  Certificate  that (a) the
Warrant  Certificates are transferable only on the registry books of the Company
if surrendered  at the principal  office of the Company  maintained  pursuant to
Section 2(b) hereof,  duly  endorsed or  accompanied  by a proper  instrument of
transfer  and (b) the  Company  may deem and treat the  person in whose name the
Warrant  Certificate  is  registered  as the absolute  owner  thereof and of the
Warrants  evidenced  thereby  (notwithstanding  any  notations  of  ownership or
writing  on the  Warrant  Certificates)  for all  purposes  whatsoever,  and the
Company shall not be affected by any notice to the contrary.

         SECTION  14.   ISSUANCE  OF  NEW WARRANT CERTIFICATES.  Notwithstanding
any of the  provisions  of this  Warrant to the  contrary,  the Company may,  at
its option, issue new Warrant  Certificates  evidencing Warrants in such form as
may be  approved  by its  Board  of  Directors  to  reflect  any  adjustment  or
change in the Purchase Price per share and the number or kind or class of shares
of  stock  or  other  securities  or  property  purchasable  under  this Warrant
Certificate   made  in  accordance  with  the   provisions   of   this   Warrant
Certificate;  provided,  that such new Warrant  Certificate shall not have terms
inconsistent with the terms of this Warrant Certificate.

         SECTION 15.  NOTICE OF PROPOSED  ACTIONS.   In case the  Company  shall
propose (a) to pay any stock  dividend to the holders of its Common  Stock or to
make any other  distribution to the holders of its Common Stock (other than cash
dividends  paid out of  consolidated  earnings for the Company's then current or
immediately preceding fiscal year), or (b) to offer to the holders of its Common
Stock rights, warrants or options to subscribe for or to purchase any additional
shares of Common Stock or shares of stock of any class or any other  securities,
rights or options,  or (c) to effect any  reclassification  of its Common  Stock
(other than a reclassification  involving only the subdivision or combination of
outstanding shares of Common Stock), or (d) to effect any consolidation,  merger
or  sale,  transfer  or other  disposition  of all or  substantially  all of the
property,  assets or business of the Company,  or (e) to effect the liquidation,
dissolution  or winding-up of the Company,  then, in each such case, the Company
shall give to the holder of this Warrant,  in accordance with Section 16 hereof,
a notice of such  proposed  action,  which shall specify the record date for the
purposes of such stock dividend, or distribution of rights, warrants or options,
or the  date  on  which  such  reclassification,  consolidation,  merger,  sale,
transfer, disposition,  liquidation, dissolution, or winding-up is to take place
and the date of  participation  therein by the holders of Common  Stock,  if any
such  date is to be  fixed,  and such  notice  shall  be so given in the  manner
provided  in Section  16 at least 20 days  prior to (i) the record  date for the
purposes  of any  action  covered by clause (a) or (b) above or (ii) the date of
the taking of such proposed action or the date of  participation  therein by the
holders of Common Stock, whichever shall be earlier.

         SECTION 16. NOTICES.  Notices or demands authorized by  this  Agreement
to be given  or made by the  holder  of this  Warrant  Certificate  to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until the holder hereof is notified, in accordance with this
Section 16, in writing by the Company of another address) as follows:

         Directrix, Inc.
         236 WEST 26TH Street, 12th Floor
         New York, New York  10001
         Attention:  Chief Executive Officer

Notices  and demands  authorized  by this  Agreement  to be given or made by the
Company to the holder of this Warrant Certificate shall be sufficiently given or
made if sent by first-class mail,  postage prepaid,  addressed to such holder at
the address of such holder as shown on the registry books of the Company.

         SECTION  17.  SUPPLEMENTS  AND  AMENDMENTS.  Except  as   provided   in
Section 14 hereof, the Company may not amend this Warrant Certificate without
the consent of the holder hereof.

         SECTION  18.   GOVERNING  LAW.   This  Warrant  Certificate  shall   be
governed by and construed in accordance with the laws of the State of New
York without reference to the principles of conflicts of laws.

         SECTION   19.   DESCRIPTIVE  HEADINGS.   Descriptive  headings  of  the
several  Sections  of  this  Warrant are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.

Dated: February 16, 2000

DIRECTRIX, INC.

By:
   -----------------------------------------
   J. Roger Faherty, Chairman & CEO

Attest:

----------------------------
Secretary

<PAGE>

                               FORM OF ASSIGNMENT
                               ------------------

         (To be executed by the registered holder if such holder desires
                      to transfer the Warrant Certificate.)

            FOR VALUE RECEIVED __________________________________________ hereby

sells, assigns and transfers unto ______________________________________________

________________________________________________________________________________
(Please print name and address of transferee)

________________________________________________________________________________

this Warrant  Certificate,  together with all right, title and interest therein,

and does hereby irrevocably  constitute and appoint ____________________________

Attorney,  to  transfer  the  within  Warrant  Certificate  on the  books of the

within-named Company, with full power of substitution.

Date:  _____________, ____

--------------------------------------
              Signature

(Note:  The above  signature must correspond
with  the name as  written  upon the face of
this Warrant  Certificate  in all  respects,
without    any    alteration    or    change
whatsoever.)

<PAGE>

                          FORM OF ELECTION TO PURCHASE
                          ----------------------------

           (To be executed if holder desires to exercise the Warrants
                     evidenced by the Warrant Certificate.)

To:  DIRECTRIX, INC.

         The   undersigned    hereby    irrevocably     elects    to    exercise
___________________ Warrants represented by this Warrant Certificate to purchase
the shares of Common Stock of Directrix, Inc. issuable upon the exercise of such
Warrants and herewith  tenders  payment for such shares in the amount of $______
to the  undersigned,  in accordance with the terms of this Warrant  Certificate.
The undersigned  requests that  certificates  for such shares of Common Stock be
issued in the name of:

Please insert social security
or other identifying number

________________________________________________________________________________
                       (Please print name and address)

__________________________________________________________________ and that such

certificates be delivered to __________________________________ whose address is

_______________________________________________________________________________.

If such  number of  Warrants  shall not be all the  Warrants  evidenced  by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

________________________________________________________________________________
                       (Please print name and address)

________________________________________________________________________________

Any cash payments to be made in lieu of fractional shares should be made to

______________________________ whose address is ________________________________

__________________________________________________________________ and the check

representing payment therefor should be delivered to ___________________________

whose address is ______________________________________________________________.

Date: _____________, ____

--------------------------------------
              Signature

(Note:  The above  signature must correspond
with  the name as  written  upon the face of
this Warrant  Certificate  in all  respects,
without    any    alteration    or    change
whatsoever.)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}]]