<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 25, 1994
REGISTRATION NO. 33-51935
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
GREEN TREE FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
MINNESOTA 41-1263905
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
DREW S. BACKSTRAND
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
CHARLES F. SAWYER CATHY M. KAPLAN
DORSEY & WHITNEY BROWN & WOOD
220 SOUTH SIXTH STREET ONE WORLD TRADE CENTER
MINNEAPOLIS, MINNESOTA 55402 NEW YORK, NEW YORK 10048
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION--PRELIMINARY
PROSPECTUS DATED FEBRUARY 25, 1994
PROSPECTUS
$508,000,000 (APPROXIMATE)
[LOGO OF GREEN TREE APPEARS HERE]
GREEN TREE SECURITIZED NET INTEREST
MARGIN TRUST 1994-A
% SECURITIZED NET INTEREST MARGIN CERTIFICATES
-----------
Green Tree Securitized Net Interest Margin Trust 1994-A (the "Trust") will be
formed pursuant to a Trust Agreement, dated as of January 1, 1994, among Green
Tree Manufactured Housing Net Interest Margin Finance Corp. I ("Finance I"), a
wholly owned subsidiary of Green Tree Financial Corporation ("Green Tree"),
Green Tree Manufactured Housing Net Interest Margin Finance Corp. II ("Finance
II"), a wholly owned subsidiary of Green Tree, and Wilmington Trust Company, as
Trustee. The Trust will issue $508,000,000 (approximate) aggregate principal
amount of % Securitized Net Interest Margin Certificates (the
"Certificates"). The assets of the Trust will consist of (i) the residual
cashflow from 26 real estate mortgage investment conduits ("REMICs"), whose
assets consist of pools of manufactured housing contracts sold by or on behalf
of Green Tree to investors between 1987 and 1993, and (ii) a limited recourse
note (the "Finance I Note") issued by Finance I, and certain related property
(as described herein). The Finance I Note will be secured by, and will be
payable solely from, (i) Guarantee Fees payable with respect to 15 pools of
manufactured housing contracts created by or on behalf of Green Tree between
1987 and 1993, (ii) the excess servicing fees payable with respect to 28 such
pools, and (iii) certain excess spread payable with respect to manufactured
housing contract GNMA Certificates sold by Green Tree between 1978 and 1993,
and certain related property, all as described herein.
The Certificates offered hereby represent fractional undivided interests in
the Trust. Principal and interest, at one-twelfth of the interest rate of %
per annum, will be distributed to the Certificateholders on a monthly basis
beginning March 15, 1994 (each, a "Distribution Date"). It is a condition of
issuance that the Certificates be rated "BBB+" by Fitch Investors Service, Inc.
("Fitch") and "Baa3" by Moody Investors Service, Inc. ("Moody's").
The Final Scheduled Distribution Date for the Certificates will be February
15, 2004. However, payment in full of the Certificates is expected to occur
earlier than such date, as described herein.
The Certificates initially will be represented by certificates registered in
the name of Cede & Co., the nominee of the Depository Trust Company ("DTC").
The interests of beneficial owners of the Certificates ("Certificate Owners")
will be represented by book entries on the records of the participating member
of DTC. Definitive Certificates will be available only under the limited
circumstances described herein. See "Description of the Certificates--
Registration of the Certificates."
Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner, & Smith Incorporated
(the "Underwriters") intend to make a secondary market in the Certificates, but
have no obligation to do so. There can be no assurance that a secondary market
for the Certificates will develop, or if it does develop, that it will
continue.
The Certificates will not be insured or guaranteed by any governmental agency
or instrumentality, by Green Tree or any of its affiliates, or by the
Underwriters or any of their affiliates, and will be payable only from amounts
held by or owed to the Trust.
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE CERTIFICATES, SEE "SPECIAL CONSIDERATIONS" HEREIN.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<TABLE>
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<CAPTION>
Price to Underwriting Proceeds to
Public (1) Discount(2) the Trust (3)
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<S> <C> <C> <C>
Per Certificate........................... % % %
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Total..................................... $ $ $
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</TABLE>
(1) Plus accrued interest, if any, from March , 1994.
(2) Green Tree has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses, estimated to be $ .
-----------
The Certificates are offered subject to prior sale, when and if issued by the
Trust and accepted by the Underwriters and subject to their right to reject
orders in whole or in part. It is expected that delivery of the Certificates
will be made in book-entry form only through the Same Day Funds Settlement
system of DTC on or about March , 1994.
-----------
LEHMAN BROTHERS MERRILL LYNCH & CO.
March , 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE CERTIFICATES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Until , 1994, all dealers effecting transactions in the Certificates,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
REPORTS TO CERTIFICATEHOLDERS
The Trust will cause to be provided to the holders of the Certificates
certain monthly and annual reports concerning the Certificates and the Trust as
further described in this Prospectus under "Description of the Certificates--
Reports to Certificateholders."
ADDITIONAL INFORMATION
This Prospectus contains a summary of certain material terms of certain of
the documents referred to herein, but does not contain all of the information
set forth in the Registration Statement of which this Prospectus is a part (the
"Registration Statement"). For further information, reference is made to such
Registration Statement and the exhibits thereto which Green Tree has filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended. Statements contained in this Prospectus describing a
provision of any agreement or other document referred to are summaries, and if
this Prospectus indicates that such agreement or other document has been filed
as an exhibit to the Registration Statement, reference is made to the copy of
the agreement or other document filed as an exhibit, each such statement being
qualified in all respects by reference to the actual provision being described.
Copies of the Registration Statement can be inspected and, upon payment of the
Commission's prescribed charges, copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at certain of its Regional Offices located as
follows: New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048, and Chicago Regional Office, Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661.
2
<PAGE>
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus.
Issuer.................. Green Tree Securitized Net Interest Margin Trust
1994-A (the "Trust"), a Delaware business trust to be
formed on or about March , 1994 (the "Closing Date")
by Green Tree Manufactured Housing Net Interest Mar-
gin Finance Corp. I ("Finance I") pursuant to a Trust
Agreement dated as of January 1, 1994 (the "Trust
Agreement") among Finance I, Green Tree Manufactured
Housing Net Interest Margin Finance Corp. II ("Fi-
nance II") and Wilmington Trust Company, as Trustee
(the "Trustee").
Securities Offered...... $508,000,000 (approximate) aggregate principal amount
of % Securitized Net Interest Margin Certificates
("SNIMCs" or the "Certificates"), issued pursuant to
the Trust Agreement. The Trust will also issue cer-
tificates representing subordinated interests in the
Trust (the "Subordinated Certificates"), which are
not offered hereby, to Finance I and Finance II.
Trust Property.......... The Certificates will be secured by, and payable
from, all of the property of the Trust. The Trust
Property will consist of a limited recourse note (the
"Finance I Note") issued by Finance I, the "residual
interests" in certain trusts (the "Residual Assets"),
a reserve fund for the benefit of the
Certificateholders (the "Reserve Fund") and the
related property described below. The Trust Property
represents the net interest margin payable to Green
Tree from certain pools of manufactured housing
contracts (the "Contracts") sold by Green Tree
between 1978 and 1993. See "The Trust Property." The
initial principal amount of the Certificates is equal
to the initial principal amount of the Finance I Note
plus approximately 78% of the estimated present value
of the Residual Assets (as further described in the
diagram on page 10), but such estimate is based on a
number of assumptions about the future performance of
the Residual Assets. See "Special Considerations" and
"Yield, Average Life and Prepayment Considerations."
A. Finance I Note....... The Finance I Note will be a limited recourse obliga-
tion of Finance I, payable solely from certain assets
(the "Fee Assets") acquired by Finance I from Green
Tree. The Finance I Note bears interest at a rate of
% per annum, and principal and interest thereon is
payable on the fifteenth day (or, if such day is not
a business day, the next succeeding business day) of
each month, commencing March 15, 1994. The Fee Assets
consist of (i) Green Tree's right to fees for provid-
ing specified levels of recourse to Green Tree
against delinquencies, defaults and net liquidation
losses on certain pools of Contracts ("Guarantee
Fees"), (ii) excess spread on certain pools of Con-
tracts evidenced by GNMA Certificates ("GNMA excess
spread"), and (iii) the excess portion of fees for
servicing certain pools of Contracts ("excess servic-
ing"). The Guarantee Fees and GNMA excess spread have
a stated maximum amount ranging from 286 to 500 basis
points of the outstanding principal balance of the
related pool before servicing fees, expenses and
losses. Green Tree's stated servicing fee with re-
spect to the pools giving rise to the excess servic-
ing is generally 100 basis points, of which the ex-
cess servic
3
<PAGE>
ing included in the Fee Assets is generally 50 basis
points, subject to the availability of funds remain-
ing after payment of amounts due investors in such
pool and other specified trust expenses (including
the normal servicing fee being retained by Green
Tree). The initial principal amount of the Finance I
Note is equal to approximately 78% of the estimated
present value of the Fee Assets (as further described
in the diagram on page 10), but such estimate is
based on a number of assumptions about the future
performance of the Fee Assets. See "The Trust Proper-
ty--The Fee Assets" and "Yield, Average Life and Pre-
payment Considerations."
B. Residual Assets.... The Residual Assets were issued by 26 trusts created
by or for Green Tree between 1987 and 1993 in connec-
tion with Green Tree's quarterly securitizations of
manufactured housing contracts originated and serv-
iced by Green Tree. The Residual Asset with respect
to each such trust represents the excess cashflow re-
maining after payment of amounts due investors in
such pool, servicing fees and other specified trust
expenses. The excess cashflows with respect to the
Residual Assets issued by the 13 trusts that do not
pay Guarantee Fees has generally ranged from 327 to
578 basis points of the outstanding principal balance
of the related pool, before servicing fees, losses
and expenses. The excess cashflows with respect to
the Residual Assets issued by the remaining 13 trusts
are payable only after the payment of a Guarantee
Fee, and accordingly are expected to generate cash
flow only periodically, when the excess cashflow ex-
ceeds the applicable Guarantee Fee. Certain of the
Residual Assets also represent the right to receive
funds held in a reserve fund by the related trust
when released by the trust. Each of these Residual
Assets constitutes the "residual interest" in a "real
estate mortgage investment conduit" ("REMIC"). See
"The Trust Property--The Residual Assets" and "Yield,
Average Life and Prepayment Considerations."
C. Inside Refinancing
Payments............. In connection with the assignments by Green Tree to
Finance I and Finance II of the Fee Assets and the
Residual Assets, Green Tree will agree that, with re-
spect to any Contract that is refinanced by the cus-
tomer through Green Tree (an "inside refinancing"),
Green Tree will pay to Finance I and/or Finance II,
as applicable, an amount intended to equal the esti-
mated present value of the net excess cashflow that
would have been generated by that Contract had it not
been refinanced (an "inside refinancing payment").
The right to receive such inside refinancing payments
will be assigned by Finance I and Finance II to the
Trust. Any such inside refinancing payments relating
to the Fee Assets will be applied to pay interest and
principal on the Finance I Note, and any such inside
refinancing payments relating to the Residual Assets
would be paid directly to the Trust, and in either
case will be used by the Trust to pay interest and
principal on the Certificates. See "The Trust Proper-
ty--Inside Refinancing Payments."
D. Reserve Fund.. On the Closing Date, the Subordinated
Certificateholders will deposit $20,320,000 of the
proceeds from the sale of the Certificates into the
Reserve Fund. On any Distribution Date, if the Amount
Available is not sufficient to pay the
Certificateholders' Interest Distributable
4
<PAGE>
Amount (as defined below), the Trustee will withdraw
the amount of such deficiency (or the amount of funds
in the Reserve Fund, if less) from the Reserve Fund
and deposit such funds in the Certificate Account. If
the funds on deposit in the Certificate Account are
insufficient to pay the outstanding principal amount
of the Certificates on the Distribution Date occur-
ring in February 2004, or upon the maturity of the
Certificates following acceleration upon an Event of
Default (as described under "Description of the Cer-
tificates--Events of Default"), the Trustee will
withdraw the amount of such deficiency (or the amount
of funds in the Reserve Fund, if less) from the Re-
serve Fund and deposit such funds in the Certificate
Account.
Contract Originator and
Servicer............... Green Tree originated substantially all of the Con-
tracts. See "Green Tree Financial Corporation." Fi-
nance I and Finance II are wholly owned special pur-
pose subsidiaries of Green Tree.
Trustee................. Wilmington Trust Company, as Trustee under the Trust
Agreement. See "Description of the Trust Documents--
the Trustee."
Administrator........... First Trust National Association, St. Paul, Minneso-
ta. The Administrator will perform various adminis-
trative functions on behalf of the Trust.
Terms of the The principal terms of the Certificates will be as
Certificates........... described below.
A. Distribution Principal and interest on the Certificates will be
Dates................ payable on the fifteenth day (or, if such day is not
a business day, the next succeeding business day) of
each month, commencing March 15, 1994 (each, a "Dis-
tribution Date") to holders of record as of the busi-
ness day immediately preceding the related Distribu-
tion Date (the "Record Date"). Distributions of in-
terest and principal on the Certificates on any Dis-
tribution Date will be made only from amounts on de-
posit in the Certificate Account on such Distribution
Date (the "Amount Available") and from funds in the
Reserve Fund, if any.
B. Interest........... % per annum (the "Interest Rate") payable monthly
at one-twelfth of the annual rate (calculated on the
basis of a 360-day year of 30-day months).
On each Distribution Date, the Trustee will distrib-
ute pro rata to Certificateholders accrued and unpaid
interest at the Interest Rate on the aggregate out-
standing principal amount of the Certificates (the
"Certificateholders' Interest Distributable Amount").
Interest in respect of a Distribution Date will ac-
crue from the most recent Distribution Date to which
interest has been paid to but excluding such Distri-
bution Date. Finance I and Finance II will receive a
distribution of interest on March 15, 1994 equal to
the interest accrued on the initial principal amount
of the Certificates at the Interest Rate from January
15, 1994 to the Closing Date. Certificateholders of
record on March 14, 1994 will receive a distribution
of interest on March 15, 1994 equal to the interest
accrued on the initial principal amount of Certifi-
cates at the Interest Rate from the Closing Date to
March 15, 1994.
In the event that the Amount Available (as defined
below) in the Certificate Account (as defined below)
is not sufficient to make a full distribution of the
Certificateholders' Interest Distributable Amount,
the amount of the deficiency will be carried forward
as an amount that the Certificateholders are entitled
to receive on the next Distribution Date. Any amount
carried forward will, to the extent legally permissi-
ble, bear interest at the Interest Rate.
5
<PAGE>
C. Principal.......... On each Distribution Date, all funds held by the
Trust in the Certificate Account after payment of the
Certificateholders' Interest Distributable Amount
will be payable as principal on the Certificates (the
"Certificateholders' Principal Distributable
Amount"). The distribution of principal on March 15,
1994 will represent collections on the Trust Property
for February 15 and March 15, 1994.
D. Optional
Prepayment........... The holders of the Subordinated Certificates may, on
any Distribution Date when the outstanding principal
amount of the SNIMCs is less than 10% of the original
principal amount of the SNIMCs, cause the Trust to
prepay the SNIMCs in whole but not in part by con-
tributing cash to the Trust in an amount equal to the
unpaid principal amount of the SNIMCs (plus any ac-
crued and unpaid interest on the SNIMCs).
E. Subordination of
Subordinated
Certificates......... The Subordinated Certificates will have an initial
principal value of $142,953,508 (approximate). No
payments of principal or interest will be made on the
Subordinated Certificates (which are not being of-
fered hereby) until the SNIMCs have been paid in
full.
Certain Federal Income
Tax Consequences....... In the opinion of Dorsey & Whitney, counsel to the
Trust, for federal income tax purposes, the Trust
will not be characterized as an association (or a
publicly traded partnership) taxable as a corpora-
tion. Although there are no regulations, published
rulings or judicial decisions involving the charac-
terization for federal income tax purposes of inter-
ests with the same terms as the Certificates, and al-
though the result is not free from doubt, on balance,
in the opinion of Dorsey & Whitney, the Certificates
will be classified as debt for federal income tax
purposes. Alternative characterizations of the Cer-
tificates are possible, but would not result in mate-
rially adverse tax consequences to the
Certificateholders. See "Certain Federal Income Tax
Consequences."
ERISA Considerations.... The Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and the Internal Revenue Code
of 1986, as amended (the "Code"), impose certain re-
quirements on those pension, profit sharing and other
employee benefit plans to which they apply and on
those persons who are fiduciaries with respect to
such plans. Prospective investors who are subject to
ERISA and the relevant provisions of the Code should
consult their legal advisors about applicable re-
strictions taking into account that the Underwriters
have advised Green Tree that they intend (although
they are not obligated) to make a market in the Cer-
tificates and to distribute the Certificates in a
manner that will result in the Certificates initially
being held by more than 100 unrelated investors. In
accordance with ERISA's fiduciary standards, before
investing in the Certificates a fiduciary should de-
termine whether such an investment is permitted under
the documents and instruments governing the plan and
is appropriate for the plan in view of its overall
investment policy and the composition and diversifi-
cation of its investment portfolio. See "ERISA Con-
siderations."
Legal Investment
Considerations......... The Certificates may not be acquired by a "disquali-
fied organization" (as defined below). By acceptance
of a Certificate, each purchaser will be deemed to
represent that it is not a disqualified organization.
See "Restrictions on Transfer."
6
<PAGE>
The Certificates will not constitute "mortgage re-
lated securities" for purposes of the Secondary Mort-
gage Market Enhancement Act of 1984. Accordingly, in-
stitutions whose investment activities are subject to
review by federal or state regulatory authorities
should consult with their counsel or the applicable
authorities to determine whether and to what extent
the Certificates constitute legal investments for
them. See "Legal Investment Considerations."
Rating.................. It is a condition to the issuance of the Certificates
that they be rated "BBB+" by Fitch and "Baa3" by
Moody's. The rating of the Certificates by Fitch ad-
dresses the likelihood of the timely payment of in-
terest and ultimate payment of principal on the Cer-
tificates. The rating of the Certificates by Moody's
addresses the likelihood of the ultimate payment of
principal and interest on the Certificates. A secu-
rity rating is not a recommendation to buy, sell or
hold securities and may be subject to revision or
withdrawal at any time by the rating agency.
7
<PAGE>
SPECIAL CONSIDERATIONS
Prospective Certificateholders should consider, among other things, the
following factors in connection with the purchase of the Certificates:
1. Limited Liquidity. The Certificates will not constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984 ("SMMEA"). Accordingly, many institutions with
legal authority to invest in SMMEA securities will not be able to invest in
the Certificates, limiting the market for such securities.
There currently is no secondary market for the Certificates. The
Underwriters expect, but are not obligated, to make a market in the
Certificates. There can be no assurance that any such market will develop
or continue.
2. Credit Risks; Limited Assets. Because of the nature of the Trust
Property and the complexity of analyzing the credit risks associated
therewith, the Certificates are an appropriate investment only for persons
familiar with manufactured housing contract performance and asset-backed
security structures. The Trust will not have, nor is it permitted or
expected to have, any significant assets or sources of funds other than the
Finance I Note, the Residual Assets and the Reserve Fund. Finance I
likewise will not have, nor is it permitted or expected to have, any
significant assets or sources of funds other than the Fee Assets.
Certificateholders must therefore rely for repayment solely upon payments
on the Fee Assets and the Residual Assets.
3. Risks of Manufactured Housing Contracts. Losses on the Contracts above
certain assumed levels, as described in "Yield, Average Life and Prepayment
Considerations," would adversely affect the yield on the Certificates. Loss
experience on the Contracts may be affected by, among other things, a
downturn in regional or local economic conditions. These regional or local
economic conditions may be volatile, and historically have affected the
delinquency, loan loss and repossession experience of the Contracts.
Moreover, regardless of its location, manufactured housing generally
depreciates in value. Consequently, the market value of certain
manufactured homes could be or become lower than the principal balance of
the Contracts they secure.
4. Subordination of Trust Property. As described in "The Trust Property,"
payments of principal and interest on the manufactured housing contracts in
the 28 pools of manufactured housing contracts sold by or on behalf of
Green Tree to investors in Green Tree's quarterly securitizations of
manufactured housing contracts between 1987 and 1993 (the "Securitized
Pools"), and all of the pools of manufactured housing contracts securing
GNMA Certificates sold by Green Tree between 1978 and 1993 (the "GNMA
Pools") will be available to make payments on the Certificates only after
required payments have been made on the related securities issued in such
prior offerings. Accordingly, losses on the Contracts generally will be
absorbed by the Trust Property before being allocated to the related
securities issued in such prior offerings. In addition, the only credit
enhancement available to the holders of the Certificates is the estimated
overcollateralization of the Finance I Note, the estimated
overcollateralization of the Certificates, and any funds which may be
released from the reserve funds held by certain of the Securitized Pools.
The yield on the Certificates may also be affected by an extremely fast
rate of principal payments on the Contracts (including defaults and
voluntary prepayments) and by an unusually rapid prepayment of Contracts
with higher than average interest rates. Investors in the Certificates
should consider the risk that, if the Contracts experience extreme
prepayment rates, Certificateholders may experience a reduction in yield or
fail to recoup fully their initial investments. See "Yield, Average Life
and Prepayment Considerations."
Unlike standard corporate bonds, the timing and amount of principal
payments on the Certificates is not fixed and will be determined by the
timing and amount of cash flows in the Trust Property, which in turn will
be dependent on the rate of prepayments and by the timing and amount of
delinquencies and losses realized on the Contracts. The timing of principal
payments on manufactured housing contracts is affected by a variety of
economic, geographic, legal and social factors, primarily because
manufactured housing contracts may be prepaid by the borrowers at any time.
8
<PAGE>
5. Certain Matters Relating to Insolvency. Green Tree intends that the
assignment of the Fee Assets and the Residual Assets to Finance I and
Finance II and then the issuance of the Finance I Note and the transfer of
the Residual Assets to the Trust constitute a sale, rather than a pledge of
the Fee Assets and the Residual Assets to secure indebtedness of Green
Tree. However, if Green Tree were to become a debtor under the federal
bankruptcy code, it is possible that a creditor or trustee in bankruptcy of
Green Tree or Green Tree as debtor-in-possession may argue that the sale of
the Fee Assets and the Residual Assets by Green Tree was a pledge of the
Fee Assets and the Residual Assets rather than a sale. This position, if
presented to or accepted by a court, could result in a delay in or
reduction of distributions to the Certificateholders.
In addition, Dorsey & Whitney, counsel to Green Tree, will render an
opinion to the effect that, in the event Green Tree were to become a debtor
under the federal bankruptcy code, a court would not order that the assets
and liabilities of Finance I, Finance II and Green Tree should be
consolidated. Such opinion is subject to a number of assumptions,
qualifications and exceptions, and any such consolidation in the event of
Green Tree's bankruptcy could result in a delay in or reduction of
distributions to the Certificateholders.
The steps necessary to perfect the security interest in a manufactured
home will vary from state to state, and in any given state may vary
depending on the nature and location of the individual manufactured home.
Because of the expense and administrative inconvenience involved, Green
Tree did not amend any certificates of title or file any assignments of
mortgage to record the interest of the purchaser of each Contract.
Consequently, in the absence of such amendment or recordation, the
assignment to GNMA (in the case of GNMA Pools) or the trustee of the
Securitized Pool, as applicable, of the security interest in the
manufactured home may not be effective in favor of GNMA or such pool
trustee or the assignment of the security interest may not be effective
against creditors of Green Tree or a trustee in bankruptcy of Green Tree.
Green Tree's insolvency and subsequent termination as servicer of the
Contracts might accordingly result in increased delays and expense in
liquidating Contracts secured by manufactured homes located in some states.
SUMMARY OF TRANSACTION
On the Closing Date, Green Tree will assign the Fee Assets and the Residual
Assets to Finance I and Finance II (collectively, the "Subordinated
Certificateholders"), pursuant to two substantially similar Assignments, dated
as of January 1, 1994 (each an "Assignment," and collectively the
"Assignments"). The Subordinated Certificateholders will in turn establish the
Trust by the issuance of the Finance I Note and the transfer of the Residual
Assets to the Trust pursuant to a Transfer Agreement, dated as of January 1,
1994 (the "Transfer Agreement"). The Trust will then issue the Certificates
pursuant to the Trust Agreement, and remit the proceeds of the sale of the
Certificates (net of certain expenses) to Finance I and Finance II. The
Subordinated Certificates, which are not being offered hereby, will be issued
to Finance I and Finance II.
On each Distribution Date, Finance I will remit to the Trustee on behalf of
the Trust (i) interest then due and payable on the Finance I Note, plus (ii)
principal then due and payable on the Finance I Note (equal to all Fee Asset
collections remitted to Finance I on such Distribution Date, net of the
interest paid on the Finance I Note). On each Distribution Date, the Trustee
will also receive all distributions on the Residual Assets, plus any inside
refinancing payments and repurchase payments made by Green Tree as described
herein.
On each Distribution Date, from (i) payments received on the Finance I Note
and (ii) distributions received on the Residual Assets, the Trustee on behalf
of the Trust will make the required payments on the SNIMCs, first to pay
interest then due and payable, then to pay any expenses of the Trust which
Green Tree or the Subordinated Certificateholders were obligated to pay but did
not pay, and then all remaining collected funds will be applied to reduce the
principal amount of the SNIMCs. The Subordinated Certificates will receive no
distributions until the SNIMCs are paid in full.
9
<PAGE>
[INSERT STRUCTURAL DIAGRAM]
10
<PAGE>
GREEN TREE FINANCIAL CORPORATION
GENERAL
Green Tree is a Minnesota corporation which, as of December 31, 1993, had
stockholders' equity of approximately $549,429,000. Green Tree purchases,
pools, sells and services conditional sales contracts for manufactured housing
throughout the nation. Green Tree is currently the largest servicer of
manufactured housing government insured or guaranteed contracts, and is one of
the largest servicers of conventional manufactured housing contracts, in the
United States. Green Tree operates its business through 40 regional service
centers throughout the United States, serving the 48 contiguous states and
Alaska. Green Tree's principal executive offices are located at 1100 Landmark
Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639 (telephone (612)
293-3400). Green Tree's Annual Report on Form 10-K for the year ended December
31, 1992, most recent Proxy Statement and, when available, subsequent quarterly
and annual reports are available from Green Tree upon written request.
CONTRACT ORIGINATION
Green Tree originated substantially all of the Contracts. Less than 2% of the
Contracts were originated by other lenders and subsequently purchased by Green
Tree. Through its regional service centers, Green Tree arranges to purchase
manufactured housing contracts from manufactured housing dealers located
throughout the United States. Green Tree's regional service center personnel
contact dealers located in their region and explain Green Tree's available
financing plans, terms, prevailing rates and credit and financing policies. If
the dealer wishes to use Green Tree's available customer financing, the dealer
must make an application for dealer approval. Upon satisfactory results of
Green Tree's investigation of the dealer's creditworthiness and general
business reputation, Green Tree and the dealer execute a dealer agreement.
Green Tree also originates manufactured housing installment loan agreements
directly with customers.
The dealer or customer submits the customer's credit application and purchase
order to one of Green Tree's regional service centers where Green Tree's
personnel conduct an analysis of the creditworthiness of the proposed buyer.
The analysis includes a review of the applicant's paying habits, length and
likelihood of continued employment, and certain other factors. If the
application meets Green Tree's guidelines and the credit is approved, Green
Tree agrees to fund the contract after the home is delivered and the customer
has moved in.
For manufactured housing contracts, Green Tree uses a proprietary automated
credit scoring system which was initially implemented in 1988 and subsequently
refined and statistically re-validated in 1991. It is a statistically based
scoring system which quantifies responses using variables obtained from
customers' credit applications. As of December 31, 1993, this credit scoring
system had been used in making credit determinations on approximately 1,140,000
applications. Green Tree believes the use of this proprietary credit scoring
system has contributed to the reduction in the number of repossessions incurred
as a percentage of Green Tree's servicing portfolio, as indicated in the table
below.
POOLING AND DISPOSITION OF CONTRACTS
Green Tree generally pools contracts for sale to investors within 15 to 120
days of purchase. In the case of FHA-insured and VA-guaranteed manufactured
housing contracts, Green Tree generally issues GNMA Certificates. The GNMA
Certificates, which provide for the payment by Green Tree to registered holders
of GNMA Certificates of monthly payments of principal and interest and the
"pass-through" of any prepayments of the contracts, are described under "The
Trust Property--GNMA Excess Spread" below.
In the case of conventional manufactured housing contracts, Green Tree sells
pools of contracts through the asset securitization vehicles described under
"The Trust Property" below.
11
<PAGE>
SERVICING
Green Tree services all of the manufactured housing contracts it originates
or purchases from other originators, collecting loan payments, taxes and
insurance payments where applicable and other payments from borrowers and
remitting principal and interest payments to the holders of the conventional
contracts or of the GNMA Certificates.
The following table sets forth the delinquency experience at December 31 for
each of the past five years of the portfolio of manufactured housing contracts
serviced by Green Tree (other than contracts already in repossession)
(excluding contracts serviced for others).
DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------------------------
1989 1990 1991 1992 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Number of Contracts Outstanding (1) .. 191,108 216,641 248,352 273,383 332,330
Number of Contracts Delinquent (2):
30-59 Days.......................... 2,619 2,434 2,862 2,464 2,577
60-89 Days.......................... 843 910 987 855 912
90 Days or More..................... 1,008 1,268 1,676 1,598 1,643
Total Contracts Delinquent............ 4,470 4,612 5,525 4,917 5,132
Delinquencies as a Percent of Con-
tracts Outstanding (3):
30-59 Days.......................... 1.37% 1.12% 1.15% 0.90% 0.78%
60-89 Days.......................... 0.44% 0.42% 0.40% 0.31% 0.27%
90 Days or More..................... 0.53% 0.59% 0.67% 0.58% 0.49%
Total Delinquencies................. 2.34% 2.13% 2.22% 1.80% 1.54%
</TABLE>
- --------
(1) Excludes contracts already in repossession.
(2) The period of delinquency is based on the number of days payments are
contractually past due (assuming 30-day months). Consequently, a contract
due on the first day of a month is not 30 days delinquent until the first
day of the next month.
(3) By number of contracts.
The following table sets forth the loan loss and repossession experience for
the periods indicated of the portfolio of manufactured housing contracts
serviced by Green Tree (excluding contracts serviced for others).
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------------------------------------------
1989 1990 1991 1992 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Number of Contracts
Serviced (1)........... 192,876 218,707 250,813 275,154 334,238
Principal Balance of
Contracts Serviced (1). $3,315,700 $3,800,836 $4,412,066 $4,936,514 $6,491,504
Contract Liquidations:
Number................ 6,062 5,374 5,978 6,899 5,781
Percentage (2)........ 3.33% 2.61% 2.55% 2.62% 1.90%
Net Losses:
Dollars (3)........... $ 40,473 $ 33,829 $ 38,583 $ 55,031 $ 49,405
Percentage (4)........ 1.30% 0.95% 0.94% 1.18% 0.86%
Repossession Inventory:
Number................ 1,768 2,066 2,461 1,771 1,908
Percentage (5)........ 0.92% 0.94% 0.98% 0.64% 0.57%
</TABLE>
- --------
(1) As of period end. Includes contracts already in repossession.
(2) As a percentage of the average number of contracts being serviced during
the period.
(3) The calculation of net loss includes unpaid interest to the date of
repossession and all expenses of repossession and liquidation.
(4) As a percentage of the average principal balance of contracts being
serviced during the period.
(5) As a percentage of the number of contracts being serviced as of period end.
12
<PAGE>
Finance I and Finance II are wholly owned special purpose subsidiaries of
Green Tree. Finance I has a right of offset relative to the Fee Assets and the
Finance I Note.
THE TRUST
The Issuer, Green Tree Securitized Net Interest Margin Trust 1994-A, is a
business trust formed under the laws of the State of Delaware pursuant to the
Trust Agreement for the transactions described in this Prospectus. Prior to the
issuance of the Finance I Note and the transfer of the Residual Assets to the
Trust, the Trust will have no assets or obligations. After its formation, the
Trust will not engage in any activity other than (i) acquiring and holding the
Trust Property and the proceeds therefrom, (ii) issuing the Certificates and
the Subordinated Certificates, (iii) making payments on the Certificates and
(iv) engaging in other activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith.
The Trust's principal offices are in Wilmington, Delaware, in care of
Wilmington Trust Company, as Trustee, at the address listed below under "The
Trustee."
THE TRUSTEE
Wilmington Trust Company is the Trustee under the Trust Agreement. Wilmington
Trust Company is a Delaware banking corporation and its principal offices are
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001. Green Tree and its affiliates may maintain commercial banking
relations with the Trustee and its affiliates. The Trustee will perform limited
administrative functions under the Trust Agreement, including making
distributions from the Certificate Account. The Trustee's liability in
connection with the issuance and sale of the Certificates is limited solely to
the express obligations of the Trustee set forth in the Trust Agreement. The
Trustee may resign at any time, in which event the Subordinated
Certificateholders will be obligated to appoint a successor trustee. The
Subordinated Certificateholders may also remove the Trustee if the Trustee
ceases to be eligible to continue as Trustee under the Trust Agreement or if
the Trustee becomes insolvent. In such circumstances, the Subordinated
Certificateholders will be obligated to appoint a successor trustee. Any
resignation or removal of a Trustee and appointment of a successor trustee will
not become effective until acceptance of the appointment by the successor
trustee.
13
<PAGE>
THE TRUST PROPERTY
The Trust Property will consist of the Finance I Note and the Residual
Assets. Finance I's obligation under the Finance I Note is limited to paying
all proceeds of the Fee Assets to the Trust until the Finance I Note is paid
in full. The Trust has no recourse against Finance I for a default on the
Finance I Note other than to foreclose upon and sell the Fee Assets pledged to
secure the Finance I Note. Each of the 28 Securitized Pools and all of the
GNMA Pools, which are the transactions giving rise to the Fee Assets and the
Residual Assets, are described in greater detail in Appendix I to this
Prospectus. The table below identifies each Securitized Pool and the
components of the Fee Assets and Residual Assets produced by it. The table
below also provides similar information with respect to the GNMA Pools. For
purposes of description in this Prospectus, the GNMA Pools have been grouped
into 9 pools by year of issuance of the related GNMA Certificate with all GNMA
Certificates issued prior to 1986 being grouped into a single pool. All the
statistical information provided below and in Appendix I was derived from
Green Tree's financial books and records.
NET INTEREST MARGIN SEGMENTATION
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
INTEREST MARGIN/
POOL PRINCIPAL GNMA EXCESS NORMAL EXCESS
TRANSACTION BALANCE SPREAD(1) SERVICING SERVICING GUARANTEE FEE RESIDUAL ASSET
- ----------- -------------- ---------------- --------- --------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
GTFC 1993-4............. $ 720,973,959 3.66% 0.50% 0.50% N/A Remaining Excess
GTFC 1993-3............. 648,127,948 4.62 0.50 0.50 3.00% (2)
GTFC 1993-2............. 432,952,311 4.79 0.50 0.50 3.00 (2)
GTFC 1993-1............. 233,917,273 5.02 0.50 0.50 3.00 (2)
GTFC 1992-2............. 263,253,660 3.90 0.50 0.50 3.00 (2)
GTFC 1992-1............. 223,816,577 5.29 0.50 0.50 4.00 (3) (3)
MLMI 1992D.............. 187,236,472 4.70 0.50 0.50 N/A Remaining Excess
MLMI 1992B.............. 473,510,261 5.76 0.50 0.50 N/A Remaining Excess
MLMI 1991I.............. 121,412,618 5.26 0.50 0.50 N/A Remaining Excess
MLMI 1991G.............. 119,140,631 5.14 0.50 0.50 N/A Remaining Excess
MLMI 1991D.............. 92,060,968 4.98 0.50 0.50 N/A Remaining Excess
MLMI 1991B.............. 64,866,724 4.67 0.50 0.50 N/A Remaining Excess
MLMI 1990I.............. 72,288,791 4.68 0.50 0.50 N/A Remaining Excess
MLMI 1990G.............. 81,658,055 4.11 0.50 0.50 4.00 (2)
MLMI 1990D.............. 68,465,325 4.21 0.50 0.50 3.35 (2)
MLMI 1990B.............. 47,297,224 3.82 0.50 0.50 2.99 (2)
MLMI 1989H.............. 69,486,801 4.22 0.50 0.50 3.00 (2)
MLMI 1989F.............. 79,969,150 4.16 0.50 0.50 3.00 (2)
MLMI 1989D.............. 58,415,195 3.90 0.50 0.50 N/A Remaining Excess
MLMI 1989B.............. 28,408,287 3.32 0.50 0.50 N/A Remaining Excess
MLMI 1988X.............. 48,976,620 3.47 0.50 0.50 N/A Remaining Excess
MLMI 1988Q.............. 61,978,163 3.81 0.50 0.50 N/A Remaining Excess
MLMI 1988H.............. 39,615,510 3.27 0.50 0.50 N/A Remaining Excess
MLMI 1988E.............. 43,398,005 3.96 0.50 0.50 Remaining Excess (2)
MLMI 1987C.............. 41,750,161 3.57 0.50 0.50 Remaining Excess (2)
MLMI 1987B.............. 25,742,132 4.32 0.50 0.50 Remaining Excess (2)
MaHCs 1987-B............ 51,692,915 4.37 0.50 1.00 Remaining Excess N/A
MaHCs 1987-A............ 18,233,098 4.10 0.50 1.00 Remaining Excess N/A
GNMA 1993............... 220,011,048 2.95 0.50 N/A N/A N/A
GNMA 1992............... 235,990,153 2.95 0.50 N/A N/A N/A
GNMA 1991............... 380,291,336 2.95 0.50 N/A N/A N/A
GNMA 1990............... 274,014,369 2.95 0.50 N/A N/A N/A
GNMA 1989............... 185,431,694 2.94 0.50 N/A N/A N/A
GNMA 1988............... 107,223,465 2.92 0.50 N/A N/A N/A
GNMA 1987............... 119,020,205 2.91 0.50 N/A N/A N/A
GNMA 1986............... 104,091,589 2.89 0.50 N/A N/A N/A
GNMA Pre-1986........... 122,809,613 2.83 0.50 N/A N/A N/A
--------------
Total.................. $6,167,528,305
==============
</TABLE>
- --------
(1) Represents the gross interest spread between the weighted average loan
rate and the weighted average investor rate for each pool as of the Cut-
off Date stated as a percentage of the outstanding pool balance before
losses, servicing fee and other trust expenses.
(2) Indicates a Residual Asset which generally is not expected to receive
significant amounts of net excess cash flow due to the existence of a
Guarantee Fee which is expected to consume substantially all net excess
cash flow.
(3) GTFC 1992-1 has a Guarantee Fee of 4.00% for the first 72 months.
Thereafter, all net excess cashflow is paid to the Residual Asset.
The following description of generic types of transaction structures is
qualified in its entirety by the information included in Appendix I.
14
<PAGE>
THE FEE ASSETS
The Finance I Note will have an initial principal amount of $321,000,000. The
Fee Assets have an estimated present value as of January 1, 1994 (the "Cut-off
Date") of approximately $411,007,189, but such estimate is based on a number of
assumptions about the future performance of the Fee Assets, as described below
under "Yield, Average Life and Prepayment Considerations." The Fee Assets
consist of (i) the Guarantee Fees; (ii) the excess servicing with respect to
the Securitized Pools; and (iii) the GNMA excess spread. Each of these assets
is described in greater detail below.
THE GUARANTEE FEES
The Guarantee Fees have an aggregate estimated present value as of the Cut-
off Date (based on the assumptions described under "Yield, Average Life and
Prepayment Considerations" below) of $237,906,588. Fifteen of the 28
Securitized Pools provide for the payment to Green Tree or a subsidiary of a
Guarantee Fee, as compensation for providing a limited guarantee against
delinquencies and losses on the related Contracts, and (in some cases)
arranging for additional credit enhancement from third parties. The Guarantee
Fees have a stated maximum amount ranging from 399 to 500 basis points of the
outstanding principal balance of the related pool before servicing fees,
expenses and losses. The limited guarantee and other credit enhancement
provided to investors has taken several basic forms.
With respect to 5 Securitized Pools, Green Tree or a subsidiary is obligated
to advance delinquent payments and to repurchase Contracts that have defaulted
(i.e., the servicer has repossessed the manufactured home, or the Contract has
become 120 or more days delinquent). Green Tree's guarantee obligation with
respect to each of these 5 pools is subject to the limit of a "Guarantee
Amount," which was set initially at a level necessary to obtain the desired
rating on the securities sold to investors, and is thereafter reduced by the
amount of losses on defaulted contracts and by unrecovered delinquencies. Green
Tree's guarantees on these pools are supplemented by financial guaranty
insurance policies issued by Financial Security Assurance Inc. ("FSA") with
respect to the investor securities. As compensation for providing such
guarantees and arranging such additional credit enhancement, Green Tree is
entitled to receive a Guarantee Fee equal to the net excess cashflow produced
by the related pool of contracts after payment of principal and interest due
investors, payment of Green Tree's servicing fee, and payment of certain
expenses of the related trust not otherwise paid by the servicer. Because Green
Tree is obligated to pay the full amount of all delinquencies and to repurchase
all defaulted contracts, the Guarantee Fees paid by these 5 pools will not be
affected by delinquencies and defaults on the contracts (although such
Guarantee Fees would be reduced due to the prepayment of the contracts upon
default), so long as Green Tree continues to perform under its limited
guarantee obligation. If, however, Green Tree were for any reason to fail to
make a limited guarantee payment required with respect to one of these pools,
the Guarantee Fee payable for that month with respect to that pool would be
reduced by the amount necessary to make such limited guarantee payment, and
thus could be reduced to zero. If the Guarantee Amount for any such pool were
exhausted, Green Tree would have no further obligation with respect to
delinquencies and defaults, but the Guarantee Fee would continue to be
subordinated in right of payment to monthly interest and principal due on the
investor securities, and as a result the Guarantee Fee would be adversely
affected by delinquencies and defaults.
With respect to 15 Securitized Pools, Green Tree is obligated to pay the
amount by which the collected funds available to make the monthly distribution
of principal and interest on a specified class of securities sold to investors
is less than the scheduled distribution amount for such month. These investor
securities are themselves subordinated to other classes of securities sold to
investors. Green Tree's guarantees with respect to 3 of these pools are limited
to specified amounts that are reduced over time by losses on the contracts, by
payments made under the guarantee obligation, or by some combination of the
foregoing. Green Tree's guarantee with respect to the other 12 pools is not
limited as to amount. Green Tree's guarantee obligations with respect to 3
pools are supported by financial guaranty insurance policies issued by FSA, and
Green Tree's obligation with respect to another 3 of these pools is supported
by a reserve fund (consisting of cash or marketable securities) that would be
drawn upon if Green Tree failed to honor its guarantee obligation. As
15
<PAGE>
compensation for providing such guarantees and arranging such additional credit
enhancement, Green Tree is entitled with respect to 10 of such 15 pools to
receive a Guarantee Fee equal to the net excess cashflow produced by the
related pool of contracts after payment of principal and interest due
investors, payment of Green Tree's servicing fee, and payment of certain
expenses of the related trust not otherwise paid by the servicer. Because these
Guarantee Fees are determined only after all available funds have been applied
to pay interest and principal on the investor securities, these Guarantee Fees
are adversely affected by delinquencies and liquidation losses on the related
contracts, and Green Tree will be obligated to make payments under its
guarantee only when the related Guarantee Fee was zero (because all available
cashflow had been used to pay investor principal and interest). With respect to
5 of such 15 pools, Green Tree is obligated to provide such recourse, but is
not entitled to receive a Guarantee Fee; Green Tree did, however, receive the
Residual Assets in such pools. See "--The Residual Assets" below.
Three of the Guarantee Fees and six of the Residual Assets are subject to
"triggers": the servicer is obligated to compute certain ratios of
delinquencies, losses, and loss coverage each month. If any of the specified
ratios fall below a specified level of pool performance, the related Pooling
and Servicing Agreement provides that all net excess cashflow will not be paid
as a Guarantee Fee but will instead be deposited in a reserve fund or paid to a
subordinated class of investor securities as "Accelerated Principal
Distributions" to provide additional credit enhancement for the subordinated
investor securities. Many of the Pooling and Servicing Agreements provide that
such deposits cease once the ratios have returned to a specified level of pool
performance for a specified period, and some of the Pooling and Servicing
Agreements provide for a release of the captured net excess cashflow if the
ratios maintain a specified level of pool performance for a longer specified
period. It was anticipated in structuring the related Securitized Pools that
one or more such triggers would be activated for a limited time during the life
of such Securitized Pool, and such triggers were negotiated in lieu of larger
initial deposits into the related reserve fund or larger initial subordination
percentages. To date there have been no draws on any such reserve fund for the
benefit of the investors in the related securities, and it is expected that the
full amount of such reserve funds will be released to the holder of the related
Residual Assets. The principal amortization tables under "Yield, Average Life
and Prepayment Considerations" below give effect to the application of these
triggers.
The Pooling and Servicing Agreements with respect to these 15 pools all
provide that the Guarantee Fee, if any, continues to be payable to Green Tree
notwithstanding any failure by Green Tree to perform its limited guarantee
obligations.
On the Closing Date, Green Tree will assign to Finance I the right to receive
all Guarantee Fees. Finance I will in turn pledge the right to receive all
Guarantee Fees to secure payments on the Finance I Note.
EXCESS SERVICING
The excess servicing with respect to the 28 Securitized Pools has an
aggregate estimated present value as of the Cut-off Date (based on the
assumptions described under "Yield, Average Life and Prepayment Considerations"
below) of $88,708,114. With respect to all 28 Securitized Pools, Green Tree
continues to act as servicer of the Contracts. See "Green Tree Financial
Corporation--Servicing." With respect to 2 Securitized Pools, Green Tree's
stated servicing fee is equal to 1.5% per annum of the outstanding principal
balance of the Contracts, payable monthly; with respect to the other 26
Securitized Pools, Green Tree's stated servicing fee is equal to 1% per annum,
payable monthly.
Green Tree will assign to Finance I the right to receive the "excess
servicing," equal to 0.50% per annum (or 1.0% per annum, with respect to the 2
pools that provide for a monthly servicing fee equal to 1.5% per annum) of the
monthly servicing fee. Green Tree will retain the remaining 0.50% per annum of
such monthly servicing fees, plus any late fees and extension fees paid by
obligors on the Contracts (the "normal servicing fee"). The normal servicing
fee, and all servicing fees payable to any replacement servicer, would be paid
by
16
<PAGE>
the related trust prior to any payment of the excess servicing or any other Fee
Assets or the related Residual Asset.
With respect to 7 Securitized Pools, the related Pooling and Servicing
Agreement provides that the monthly servicing fee is to be paid to the servicer
(whether the servicer is Green Tree or a successor servicer) out of available
funds prior to the payment of principal and interest due investors; with
respect to 6 Securitized Pools, the related Pooling and Servicing Agreement
provides that the monthly servicing fee is to be paid to the servicer (whether
the servicer is Green Tree or a successor servicer) out of available funds
after the payment of principal and interest due investors; and with respect to
15 Securitized Pools, the related Pooling and Servicing Agreement provides
that, so long as Green Tree is the servicer, the monthly servicing fee is
payable out of available funds only after payment of principal and interest due
to investors and after payment of certain expenses of the trust not otherwise
paid by the servicer, but that if Green Tree is no longer the servicer the
monthly servicing fee is to be paid to the successor servicer prior to the
payment of principal and interest due investors. As a result, the excess
servicing fees with respect to 21 Securitized Pools could be adversely affected
by higher than anticipated delinquencies and liquidation losses on the related
Contracts.
The Pooling and Servicing Agreements for all 28 Securitized Pools provide
that, upon a "Servicer Termination Event," the pool trustee or the holders of a
specified percentage of the investor securities may terminate all of Green
Tree's rights and responsibilities as servicer. In such event, the trustee of
such Securitized Pool would be required to locate a replacement servicer, and
pay such replacement servicer a negotiated servicing fee. If such replacement
servicer required a servicing fee greater than 0.50%, the excess servicing
assigned by Green Tree to Finance I would be correspondingly reduced. The
Pooling and Servicing Agreements generally define a "Servicer Termination
Event" as including the bankruptcy or insolvency of the servicer or any
material failure on the servicer's part to perform its servicing obligations.
On the Closing Date, Green Tree will assign the excess servicing to Finance
I. Finance I will in turn pledge the right to receive the excess servicing to
secure payments on the Finance I Note.
GNMA EXCESS SPREAD
The GNMA excess spread has an estimated present value as of the Cut-off Date
(based on the assumptions described under "Yield, Average Life and Prepayment
Considerations" below) of $84,392,487. As described under "Green Tree Financial
Corporation--Pooling and Disposition of Contracts," Green Tree sells
substantially all of the FHA-insured and VA-guaranteed manufactured housing
contracts it originates in the form of GNMA Certificates.
Green Tree periodically assembles pools of FHA/VA contracts and assigns such
contracts to GNMA. GNMA's regulations prescribe the permissible composition of
each contract pool, including the permissible range of interest rates for the
contracts included in a single pool and the permissible pass-through rate of
the related GNMA Certificate. Green Tree then sells the GNMA Certificates to
investors. The difference between the interest rate on the contracts and the
interest rate on the related GNMA Certificates is generally 3.25%, but GNMA is
entitled to payment of a guaranty fee equal to 0.30% per annum of the
outstanding balance of the contract pool, payable monthly. Accordingly, the
"GNMA excess spread" Green Tree is entitled to receive is generally equal to
2.95% of the outstanding balance of the contract pool, payable monthly.
As servicer of the GNMA Pools, Green Tree is obligated to service the related
contracts, including liquidating contracts and submitting claims to FHA or VA,
as applicable, when necessary. In addition, Green Tree is obligated to pay the
expenses of administering the contract pool (such as preparing reports to
investors in the related GNMA Certificate), and to repurchase any contracts
found not to conform to Green Tree's representations and warranties upon
formation of the contract pool.
As servicer, Green Tree is also obligated to pay the FHA insurance premiums
on all FHA-insured contracts (with the exception of a small number of FHA-
insured contracts where the obligor pays the
17
<PAGE>
premium). The FHA premium is calculated with respect to each individual
contract, and is payable to FHA annually on the anniversary of the origination
of that contract; as a result, Green Tree is obligated to pay FHA insurance
premiums each month. With respect to contracts originated prior to October
1989, the FHA insurance premium payable annually is equal to 0.54% of the
original amount financed. With respect to contracts originated after October
1989, the total FHA insurance premium payable over the life of the contract is
equal to the product of 0.50% times the original amount financed times the
original term of the contract (in years); the amount payable per year during
the first several years after origination varies based on the original term of
the contract, but once the total FHA insurance premium is paid no further
premium payments are required with respect to that contract. No such premium or
fee is required on VA-guaranteed contracts.
All collections on the GNMA Pools, consisting of regular payments of
principal and interest by obligors, voluntary prepayments by obligors, and
proceeds of liquidated contracts, are remitted daily to a custodial account.
As servicer, Green Tree is obligated to remit all claims paid by FHA or VA as
received, together with a payment by Green Tree of the unpaid amount of the
contract not covered by FHA insurance or the VA guarantee, as applicable. FHA's
insurance claim procedures require Green Tree to repossess and resell the
manufactured home prior to submitting a claim. In general, FHA insurance will
pay 90% of the sum of (i) the unpaid principal amount of the contract at the
date of default and uncollected interest computed at the contract rate earned
to the date of default, (ii) accrued and unpaid interest on the unpaid amount
of the contract from the date of default to the date of submission of the claim
plus 15 calendar days (but in no event more than 9 months) computed at a rate
of 7% per annum, (iii) uncollected court costs, (iv) legal fees, not to exceed
$500, and (v) expenses for recording the assignment to FHA of the security
interest in the manufactured home. FHA insurance available to Green Tree is
subject to the limit of a reserve amount which will be increased by an amount
equal to 10% of the lesser of the principal balance of the purchase price of
insured loans subsequently originated or purchased of record by Green Tree, and
which will be reduced by all FHA insurance claims paid to Green Tree and by an
annual reduction in the reserve amount of 10% of the reserve amount. As of
December 31, 1993, Green Tree's FHA insurance reserve amount was equal to
approximately $134,383,000. These insurance reserves were available to cover
losses on approximately $1,783,263,000 of FHA-insured manufactured housing
contracts and approximately $237,800,000 of FHA-insured home improvement loans.
If the FHA reserve amount were for any reason reduced to zero, Green Tree would
remain obligated to remit the amount of all unpaid principal and interest on
liquidated contracts to the custodial account for the GNMA Certificates. The
maximum guarantee that may be issued by the VA for a VA-guaranteed contract is
the lesser of (a) the lesser of $20,000 and 40% of the principal amount of the
contract and (b) the maximum amount of guaranty entitlement available to the
obligor veteran (which may range from $20,000 to zero). The amount payable
under the guarantee will be the percentage of the VA contract originally
guaranteed applied to indebtedness outstanding as of the applicable date of
computation specified in the VA regulations, interest accrued on the unpaid
balance of the loan to the appropriate date of computation and limited expenses
of the contract holder, but in each case only to the extent that such amounts
have not been recovered through resale of the manufactured home. The amount
payable under the VA guarantee may in no event exceed the amount of the
original guarantee.
In addition, Green Tree is also obligated to deposit in the GNMA custodial
account, from its own funds, (i) any shortfall in a full month's interest paid
on a contract due to a full prepayment of principal on that contract in that
month (the "make-up deposit"), and (ii) all losses on a contract if the FHA or
VA denies insurance coverage for that contract for any reason. On the fifteenth
day of each month, Green Tree is also obligated to deposit in the custodial
account the amount of all payments due but not received during the prior month;
Green Tree may, however, instead of advancing its own funds for these
delinquencies, use excess funds in the custodial account deposited as
collections during the first 14 days of the current month.
On the Closing Date, Green Tree will assign to Finance I the GNMA excess
spread, net of (i) the FHA insurance premiums paid by Green Tree with respect
to the contracts, (ii) an amount to reimburse Green
18
<PAGE>
Tree for its cost of servicing the contracts, equal to 0.50% per annum, payable
monthly, of the outstanding balance of the contract pool, (iii) the amount of
any prepayment shortfalls paid by Green Tree with respect to the prior month,
and (iv) all liquidation losses paid by Green Tree upon payment of the FHA or
VA claim during the prior month. Finance I will in turn pledge the GNMA excess
spread to secure payments on the Finance I Note.
THE RESIDUAL ASSETS
The Residual Assets have an aggregate estimated present value as of the Cut-
off Date (based on the assumptions described under "Yield, Average Life and
Prepayment Considerations" below) of $239,946,319. With respect to 26 of the 28
Securitized Pools, an election was made to treat the related trust as a "Real
Estate Mortgage Investment Conduit" ("REMIC") for federal income tax purposes.
The REMIC regulations require that the REMIC issue a single class of "residual
interest," in addition to one or more classes of "regular interests." The
securities sold by Green Tree to investors were "regular interests," and Green
Tree or a subsidiary retained the residual interest issued by each REMIC.
Thirteen of the Residual Assets represent the right to receive all net excess
cashflow each month after payment of principal and interest due investors,
payment of Green Tree's servicing fee, and payment of certain expenses of the
related trust not otherwise paid by the servicer. These 13 REMICs do not
provide for the payment of a Guarantee Fee, and the monthly cashflow payable to
the holder of the Residual Asset is similar to the net excess cashflow payable
as a Guarantee Fee. The net interest margin payable with respect to the
Residual Assets issued by these 13 trusts has generally ranged from 315 to 575
basis points, before servicing fees, losses and expenses.
With respect to 8 pools, Green Tree has established cash reserve funds as
credit enhancement for the investors, either in lieu of or to supplement a
Green Tree limited guarantee obligation. An aggregate of $68,512,329 was held
in these reserve funds as of the Cut-off Date. The related Pooling and
Servicing Agreements generally provide that funds held in these reserve funds
may be released over time as the contract pool amortizes (subject to certain
tests of contract pool performance). Any such partial releases of funds, and
all releases of funds upon termination of the related pool, are required to be
paid to the holder of the Residual Asset. Accordingly, such funds would be
applied to payments on the Certificates, if they are still outstanding at such
time. Because of the uncertainty in estimating the timing of such releases of
funds, the estimated current present values of the Residual Assets stated above
does not include the value of such funds. These funds represent an additional
source of credit enhancement for the Certificates.
With respect to 7 pools, the related Pooling and Servicing Agreement provides
for "Accelerated Principal Distributions" to be made to the investors in the
subordinate class of securities. Any Accelerated Principal Distributions are to
be made out of excess cashflow after payment of the interest and principal
payable on the senior class of investor securities and interest on the
subordinate class (and payment of the servicing fee, with respect to 1 pool),
and would be used to amortize the principal balance of the subordinate class of
investor securities. Such Accelerated Principal Distributions will cause the
principal balance of the investor securities to be less than the outstanding
principal amount of the Contracts in the related pool. As a result, upon
termination of the related trust, whether due to the servicer's exercise of its
option to repurchase the related Contracts when the aggregate balance of such
contracts has declined to less than 10% of its initial amount or due to the
payment in full of the investor securities, the holder of the Residual Asset
will receive either (i) cash equal to the difference between the amount paid by
the servicer to repurchase the Contracts and the outstanding balance of the
investor securities (together with a payment by Green Tree directly to the
Trust, as described under "Inside Refinancing Payments"), or (ii) all cashflow
from the remaining Contracts after payment in full of the investor securities.
All such cash or proceeds of such Contracts would be applied to payments on the
Certificates, if they are still outstanding at such time.
As described above under "The Guarantee Fees," the monthly cashflow to many
of the Residual Assets is subject to "triggers," whereby the net excess
cashflow otherwise payable to the Residual Asset holder may
19
<PAGE>
instead be deposited in a reserve fund or paid as Accelerated Principal
Distributions if certain tests of pool performance are not satisfied, to
provide additional credit enhancement for the subordinate class of investor
securities.
On the Closing Date, Green Tree will assign all the Residual Assets to
Finance I and Finance II. Finance I and Finance II will in turn assign all the
Residual Assets to the Trust.
INSIDE REFINANCING PAYMENTS
Obligors on existing Green Tree manufactured housing contracts sometimes
refinance their Contracts. When a customer inquires about a payoff balance for
the purpose of considering refinancing, Green Tree will advise the customer of
its current rates and terms for such a refinancing. Green Tree may from time to
time or under certain circumstances solicit customers to refinance their
Contracts. If the customer on a Contract for any reason refinances his or her
Contract with Green Tree, the consequence to the Trust of such an "inside
refinancing" is (i) a prepayment in full of the Contract, with the resulting
termination of the net excess cashflow being generated by that Contract, and
(ii) the origination of a new contract, which Green Tree may sell in a future
securitization or GNMA Pool, which would thereby generate net excess cashflow
that would be owned by Green Tree. To protect Certificateholders against the
effect of such prepayments, Green Tree has agreed in the Assignments to pay an
amount with respect to each Contract that has been the subject of an inside
refinancing (the "inside refinancing payment") which is intended to equal the
estimated present value of the net excess cashflow that could have been
generated by that Contract had it not been refinanced. Such payment will be
based on a precomputed factor with respect to the related Securitized Pool or
GNMA Pool, calculated for each Distribution Date as of the Closing Date and
multiplied by the remaining principal balance of such Contract. Such payments
will be remitted to the Trust on the Distribution Date following the month in
which the Contract was refinanced. Historically, approximately 50% of the
Contracts that Green Tree believes were prepaid as a result of voluntary
refinancings were refinanced through Green Tree.
Green Tree, as servicer of the Contracts in each Securitized Pool, has the
right to repurchase the Contracts in any pool when the outstanding principal
balance of such pool has declined to 10% or less of its initial principal
balance. Any such repurchase would have the effect of a prepayment of all the
Contracts in that pool, and Green Tree has agreed to make a similar payment
with respect to any such repurchased Contracts. Green Tree has also agreed to
make a similar payment for any Contract which is repurchased by Green Tree
because of a breach of certain representations and warranties contained in the
applicable Pooling and Servicing Agreement or GNMA Guaranty Agreement.
RESERVE FUND
On the Closing Date, the Subordinated Certificateholders will deposit
$20,320,000 (the "Initial Deposit Amount") of the proceeds from the sale of the
Certificates into the Reserve Fund. On any Distribution Date, if the Amount
Available is not sufficient to pay the Certificateholders' Interest
Distributable Amount (as defined below), the Trustee will withdraw the amount
of such deficiency (or the amount of funds in the Reserve Fund, if less) from
the Reserve Fund and deposit such funds in the Certificate Account. If the
funds on deposit in the Certificate Account are insufficient to pay the
outstanding principal amount of the Certificates on the Distribution Date
occurring in February 2004, or upon the maturity of the Certificates following
acceleration upon an Event of Default (as described under "Description of the
Certificates--Events of Default"), the Trustee will withdraw the amount of such
deficiency (or the amount of funds in the Reserve Fund, if less) from the
Reserve Fund and deposit such funds in the Certificate Account.
The Subordinated Certificateholders may authorize the Trustee to invest the
funds in the Reserve Fund in Eligible Investments (as described in the Trust
Agreement). Any amount in the Reserve Fund in excess of the Initial Deposit
Amount will be paid to the Subordinated Certificateholders. Upon termination of
the Trust, all funds in the Reserve Fund will be released to the Subordinated
Certificateholders.
20
<PAGE>
HISTORICAL AND PROJECTED NET EXCESS CASHFLOW
The following graphs depict the net excess cashflow produced by the 28
Securitized Pools and by the GNMA Pools in each month between January 1987 and
November 1993. The Securitized Pools were issued by or on behalf of Green Tree
in March, June, September and December of each year between March 1987 and
December 1993, and the 2,319 GNMA Pools were issued by Green Tree from time to
time between 1978 and 1993. Accordingly, the aggregate outstanding pool
balances for the Securitized Pools and the GNMA Pools were increasing
throughout this time period. For purposes of description in this Prospectus,
the GNMA Pools have been grouped into 9 pools by year of issuance of the
related GNMA Certificate with all GNMA Certificates issued prior to 1986 being
grouped into a single pool. The graphs also indicate liquidation losses on the
Contracts and certain other items that affect the net excess cashflow, as
further described under "The Trust Property." Each of the Securitized Pools and
the GNMA Pools are described in further detail in "The Trust Property" and in
Appendix I hereto.
The graphs also show the projected net excess cashflow and other items for
the Securitized Pools and the GNMA Pools beginning in January 1994, based on a
number of assumptions about future performance of the Contracts as described in
"Yield, Average Life and Prepayment Considerations."
The projected cashflow scenarios are provided by Green Tree to assist
potential investors in an evaluation of the Certificates offered hereby. These
projections are not to be viewed as fact and should not be relied upon as an
accurate representation of future results. Furthermore, because such
projections are based on estimates and assumptions about circumstances and
events that have not yet taken place and are subject to variations, the actual
circumstances and events may not be consistent with those assumed herein and
the differences between actual and projected results may be material.
21
<PAGE>
[TOTAL GNMA AND SECURITIZED CONVENTIONAL CASHFLOWS GRAPH]
22
<PAGE>
[TOTAL SECURITIZED CONVENTIONAL CASHFLOWS GRAPH]
23
<PAGE>
[TOTAL GNMA CASHFLOWS GRAPH]
24
<PAGE>
YIELD, AVERAGE LIFE AND PREPAYMENT CONSIDERATIONS
GENERAL
The yield, average life and expected maturity of the Certificates may be
affected by a number of factors that may affect the amounts and timing of the
distributions on the Trust Property. The two primary factors are defaults and
voluntary prepayments on the Contracts, which in turn are influenced by changes
in borrowers' housing needs, job transfers, unemployment and borrowers' net
equity in the manufactured homes. All the Contracts may be prepaid at any time
without penalty, and have due-on-sale clauses.
An acceleration in the prepayment of the Contracts will generally result in
reduced cashflow to the Trust, resulting in slower payments of principal on the
Certificates. Conversely, if the rate of prepayments on the Contracts
decreases, the Trust generally would be expected to receive increased cashflow,
resulting in faster payments of principal on the Certificates. Moreover,
because the classes of investor securities in any Securitized Pool have
different interest rates, and because the lower-rate classes often are entitled
to receive principal distributions first, prepayments on the Contracts may
increase the weighted average interest rate on the investor securities,
reducing the net excess cashflow available to the Trust.
If the purchaser of a Certificate offered at a discount from its initial
principal amount calculates its anticipated yield to maturity based on a rate
of principal payments on the Certificates that is faster than that actually
experienced, the actual yield to maturity will be lower than that so
calculated.
PORTFOLIO PREPAYMENT EXPERIENCE
The following graph is provided by Green Tree and presents the historical
monthly prepayment experience (both defaults and voluntary prepayments) of
Green Tree's manufactured housing servicing portfolio, on a loan-by-loan basis,
from January 1984 through January 1994, expressed on a weighted average
conditional prepayment rate (CPR) basis.
WEIGHTED AVERAGE HISTORICAL MONTHLY PREPAYMENT RATES (CPR)
25
<PAGE>
The following graphs present Green Tree management's best estimate of the
weighted average projected CPR (both defaults and voluntary prepayments) of all
the Contracts, in the underlying Securitized Pools and GNMA Pools, under
varying interest rate scenarios. The graphs depict the weighted average
projected CPR curve, assuming Contract defaults occur at 100% of the
Manufactured Housing Projected Default Assumption, for assumed immediate
interest rate shifts of -300 basis points through +300 basis points from the
current Green Tree Contract Rate of 10.50% with respect to conventional
Contracts and 10.00% with respect to FHA-insured or VA-guaranteed Contracts.
The graphs also disclose in the legends the constant CPR rate, which is
equivalent to the average of such curve, for each such interest rate scenario.
Green Tree's estimate of future prepayments is based on a detailed statistical
analysis of historical voluntary prepayments, defaults and recoveries on all
conventional and FHA/VA loans originated by Green Tree from 1976 through the
third quarter of 1993, including voluntary prepayment behavior during recent
periods of dramatic interest rate declines. The manufactured housing contracts
in Green Tree's portfolio that were prepaid were analyzed by a number of
variables, including loan type (FHA/VA or conventional), seasoning,
seasonality, collateral characteristics (new or used, single- or multi-wide,),
refinancing incentive (the probability that obligors will refinance as interest
rates decline), prepayment burnout (pools of manufactured housing loans that
experience refinancing incentive for an extended period of time show increasing
prepayment activity in the beginning of the period but a slowing of the
prepayment rate over time), and a number of other factors. By applying the
results of the statistical analysis of voluntary prepayments, defaults and
recoveries to the Contracts on a loan-by-loan basis and calculating the
weighted average of all loans in the portfolio, Green Tree has derived its
estimate of future prepayments as depicted below.
The weighted average projected CPRs on the Contracts shown below present
Green Tree management's best estimate of future principal prepayments and
defaults on the Contracts, based on historical CPR experience as described
above. It is not likely that the Contracts will prepay at any constant CPR to
maturity or that all Contracts will prepay at the same rate.
26
<PAGE>
WEIGHTED AVERAGE PROJECTED PREPAYMENT RATES (CPR)
DECREASING INTEREST RATE SCENARIOS
WEIGHTED AVERAGE PROJECTED PREPAYMENT RATES (CPR)
INCREASING INTEREST RATE SCENARIOS
27
<PAGE>
GREEN TREE MANUFACTURED HOUSING CONTRACT PREPAYMENT INFORMATION(1)
<TABLE>
<CAPTION>
PERCENTAGE WEIGHTED WEIGHTED
BOND BOND POOL AVERAGE AVERAGE
VALUE VALUE PRINCIPAL WAM INVESTOR INTEREST
TRANSACTION AMOUNT(2) AMOUNT BALANCE (MONTHS) WAC RATE(%) MARGIN(%)(3)
----------- ------------ ---------- --------------- -------- ----- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
GTFC 1993-4...... $ 78,102,629 12.00% $ 720,973,959 202 9.73% 6.07% 3.66%
GTFC 1993-3...... 105,076,197 16.14 648,127,948 199 10.23 5.61 4.62
GTFC 1993-2...... 63,390,239 9.74 432,952,311 197 10.65 5.86 4.79
GTFC 1993-1...... 37,347,927 5.74 233,917,273 197 11.35 6.33 5.02
GTFC 1992-2...... 26,809,352 4.12 263,253,660 188 11.26 7.36 3.90
GTFC 1992-1...... 33,933,610 5.21 223,816,577 183 11.88 6.58 5.29
MLMI 1992D....... 29,949,462 4.60 187,236,472 172 12.20 7.51 4.70
MLMI 1992B....... 74,306,764 11.42 473,510,261 107 13.44 7.68 5.76
MLMI 1991I....... 20,149,816 3.10 121,412,618 155 13.05 7.80 5.26
MLMI 1991G....... 19,436,420 2.99 119,140,631 155 13.50 8.36 5.14
MLMI 1991D....... 7,533,687 1.16 92,060,968 136 14.20 9.22 4.98
MLMI 1991B....... 11,848,598 1.82 64,866,724 139 14.12 9.45 4.67
MLMI 1990I....... 15,181,581 2.33 72,288,791 148 14.05 9.37 4.68
MLMI 1990G....... 3,461,675 0.53 81,658,055 147 14.19 10.08 4.11
MLMI 1990D....... 3,615,758 0.56 68,465,325 139 14.22 10.01 4.21
MLMI 1990B....... 1,978,204 0.30 47,297,224 142 13.96 10.15 3.82
MLMI 1989H....... 3,652,482 0.56 69,486,801 140 13.71 9.49 4.22
MLMI 1989F....... 5,037,400 0.77 79,969,150 131 13.91 9.75 4.16
MLMI 1989D....... 1,891,701 0.29 58,415,195 131 14.37 10.47 3.90
MLMI 1989B....... 998,818 0.15 28,408,287 124 14.12 10.80 3.32
MLMI 1988X....... 2,052,280 0.32 48,976,620 122 13.72 10.25 3.47
MLMI 1988Q....... 3,166,525 0.49 61,978,163 122 13.61 9.80 3.81
MLMI 1988H....... 1,554,103 0.24 39,615,510 117 12.97 9.70 3.27
MLMI 1988E....... 4,209,757 0.65 43,398,005 103 13.51 9.55 3.96
MLMI 1987C....... 3,259,697 0.50 41,750,161 111 13.67 10.10 3.57
MLMI 1987B....... 2,365,030 0.36 25,742,132 95 14.52 10.20 4.32
MaHCs 1987-B..... 4,738,050 0.73 51,692,915 90 13.92 9.55 4.37
MaHCs 1987-A..... 1,513,262 0.23 18,233,098 99 12.65 8.55 4.10
GNMA 1993........ 15,415,334 2.37 220,011,048 201 9.76 6.81 2.95
GNMA 1992........ 15,149,244 2.33 235,990,153 187 10.86 7.91 2.95
GNMA 1991........ 19,860,065 3.05 380,291,336 174 12.28 9.33 2.95
GNMA 1990........ 12,758,458 1.96 274,014,369 166 12.87 9.93 2.95
GNMA 1989........ 8,831,463 1.36 185,431,694 147 12.76 9.82 2.94
GNMA 1988........ 4,026,262 0.62 107,223,465 119 12.49 9.57 2.92
GNMA 1987........ 3,855,507 0.59 119,020,205 101 11.42 8.52 2.91
GNMA 1986........ 2,869,661 0.44 104,091,589 89 12.11 9.22 2.89
GNMA Pre-1986.... 1,626,493 0.25 122,809,613 61 14.71 11.87 2.83
------------ ------ ---------------
Total............ $650,953,511 100.00% $ 6,167,528,305
============ ====== ===============
Weighted Average. 164 11.88% 7.79% 4.09%
=== ===== ===== ====
<CAPTION>
LOAN-BY-LOAN PREPAYMENT EXPERIENCE (CPR%)(4)
-----------------------------------------------------------
HISTORICAL
EXPERIENCE PROJECTED EXPERIENCE
------------------- ---------------------------------------
TRANSACTION 6 MTHS 12 MTHS LIFE 6 MTHS 12 MTHS 36 MTHS 60 MTHS 120 MTHS
----------- ------ ------- ---- ------ ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GTFC 1993-4...... N/A N/A 2.4 2.3% 2.8% 3.9% 4.1% 4.3%
GTFC 1993-3...... N/A N/A 3.4 3.3 3.5 4.3 4.4 4.6
GTFC 1993-2...... 3.7 N/A 3.6 4.2 4.3 4.9 4.9 5.0
GTFC 1993-1...... 6.4 N/A 5.3 5.5 5.5 5.8 5.7 5.6
GTFC 1992-2...... 6.4 5.4 5.2 5.8 5.8 5.9 5.7 5.6
GTFC 1992-1...... 9.3 7.3 6.4 7.7 7.7 7.5 7.1 6.6
MLMI 1992D....... 11.4 8.8 6.8 8.9 8.9 8.5 8.0 7.3
MLMI 1992B....... 14.3 12.3 10.4 10.7 10.5 9.8 9.3 8.3
MLMI 1991I....... 15.6 13.3 10.0 13.8 13.4 12.1 11.2 9.7
MLMI 1991G....... 17.4 14.7 11.0 15.1 14.5 12.9 11.9 10.3
MLMI 1991D....... 18.5 15.4 10.5 14.8 14.3 12.8 11.9 10.5
MLMI 1991B....... 19.9 16.8 11.2 14.9 14.4 12.9 12.0 10.7
MLMI 1990I....... 22.0 18.2 11.3 15.7 15.0 13.4 12.4 10.9
MLMI 1990G....... 20.2 16.8 10.4 16.2 15.6 13.9 12.9 11.4
MLMI 1990D....... 19.8 16.6 10.7 17.2 16.4 14.7 13.5 11.7
MLMI 1990B....... 19.7 16.6 11.0 17.0 16.3 14.6 13.4 11.5
MLMI 1989H....... 20.4 16.7 10.4 15.4 14.9 13.5 12.6 11.0
MLMI 1989F....... 19.2 15.9 10.2 15.5 15.0 13.7 12.8 11.5
MLMI 1989D....... 19.2 16.8 11.1 16.3 15.7 14.2 13.1 11.7
MLMI 1989B....... 20.0 16.7 10.6 16.5 15.9 14.3 13.1 11.5
MLMI 1988X....... 18.1 14.6 9.6 13.3 12.9 12.0 11.3 10.6
MLMI 1988Q....... 17.2 13.9 9.1 13.0 12.7 11.8 11.1 10.3
MLMI 1988H....... 15.4 14.1 8.5 11.4 11.2 10.5 10.0 9.6
MLMI 1988E....... 15.1 12.7 8.5 11.0 10.8 10.2 9.7 9.6
MLMI 1987C....... 17.5 14.6 9.1 12.2 11.9 11.0 10.4 10.0
MLMI 1987B....... 17.8 13.9 10.0 10.1 9.8 9.3 8.9 8.8
MaHCs 1987-B..... 14.9 12.6 9.1 10.6 10.4 9.8 9.4 9.6
MaHCs 1987-A..... 15.2 12.7 8.1 9.6 9.3 8.9 8.7 9.0
GNMA 1993........ 2.2 N/A 1.7 3.0 3.3 4.1 4.5 5.2
GNMA 1992........ 10.3 7.6 7.3 5.6 5.7 5.9 6.0 6.4
GNMA 1991........ 19.1 14.4 10.2 9.7 9.5 9.0 8.8 8.6
GNMA 1990........ 20.7 15.8 9.9 11.6 11.2 10.7 10.5 10.1
GNMA 1989........ 19.0 14.8 8.7 10.8 10.5 10.2 9.9 9.5
GNMA 1988........ 16.1 13.1 7.9 9.9 9.6 9.4 9.2 9.2
GNMA 1987........ 13.7 11.8 6.6 7.8 7.8 7.8 7.9 8.5
GNMA 1986........ 15.8 13.3 7.5 8.8 8.6 8.5 8.5 10.5
GNMA Pre-1986.... 11.8 10.4 11.3 11.9 11.7 11.1 10.8 8.8
Total............
Weighted Average.
</TABLE>
- ----
(1) As of the Cut-off Date.
(2) Represents the present value of the net interest margin cash flow for each
transaction, after servicing fees, projected losses and expenses.
(3) Before servicing fees, losses and expenses.
(4) Historical and projected prepayment CPRs have been calculated and stated on
a loan-by-loan basis, for each pool, taking into account the actual WAC and
amortization schedule for each loan in the pool.
(5) The 1 month historical CPR was used because of new GNMA originations.
28
<PAGE>
MANUFACTURED HOUSING PROJECTED DEFAULT ASSUMPTION
The following graph presents Green Tree management's best estimate of the
weighted average conditional default rate (CDR) of all the Contracts for each
month beginning in January 1994. The CDR for a Contract as of any month is the
estimated probability that the Contract, having reached that age, will default
sometime during the subsequent month. This projection was derived through a
loan-by-loan analysis employing detailed statistical processes, based on the
default experience of Green Tree's actual portfolio of manufactured housing
contracts originated between 1976 and November 1993. Each manufactured housing
contract in Green Tree's portfolio that defaulted was analyzed according to a
number of variables, including loan-to-value ratio at origination; original
term to maturity; year of origination; whether the financed manufactured home
was new or used at the date of origination; whether the contract was FHA-
insured, VA-guaranteed or conventional; the seasoning of the contract; the
prevailing rate of unemployment in that state; and a number of other factors.
Based on this historical default analysis of contracts with identical loan
attributes, each Contract was assigned a CDR for each month of its projected
remaining life. The individual CDRs for each Contract were then aggregated into
a weighted average for each month.
The following graph presents Green Tree management's best estimate of
weighted average projected defaults on the Contracts. There can be no assurance
that the actual default experience of the Contracts will not be substantially
worse than this estimate, and it is likely that the default experience of the
aggregate pool of Contracts in any given month will differ from the estimate
provided here.
WEIGHTED AVERAGE PROJECTED DEFAULT RATES
29
<PAGE>
MANUFACTURED HOUSING PROJECTED RECOVERY ASSUMPTION
The following graph presents Green Tree management's best estimate of the
weighted average recovery rate (expressed as a percentage of the estimated
defaults) of all the Contracts following a default for each month beginning in
January 1994. This projection was derived through a loan-by-loan analysis
employing detailed statistical processes, based on Green Tree's actual recovery
experience on its portfolio of manufactured housing contracts originated
between 1976 and November 1993. Each manufactured housing contract in Green
Tree's portfolio that defaulted was analyzed according to a number of
variables, including the seasoning of the contract; whether or not the contract
was FHA-insured, VA-guaranteed or conventional; the type of manufactured home
financed (new or used, single- or multi-wide); the location of the manufactured
home; and a number of other variables. Each Contract was assigned an estimated
recovery rate for each month of its life based on the historical recovery
experience of contracts with identical loan attributes. The individual recovery
rates for each Contract were then aggregated into a weighted average for each
month.
The following graph presents Green Tree management's best estimate of
weighted average projected recovery rates on Contracts following a default.
There can be no assurance that the actual recovery rate experience of the
Contracts will not be substantially worse than this estimate, and it is likely
that the recovery rate experience of the aggregate pool of Contracts in any
given month will differ from the estimate provided here.
WEIGHTED AVERAGE PROJECTED RECOVERY RATES
30
<PAGE>
CERTIFICATE PRINCIPAL AMORTIZATION TABLES
The following tables present the weighted average life of the Certificates
under a range of assumed rates of default on the Contracts and a range of
assumed prevailing interest rates (expressed in terms of Green Tree's current
average Contract Rate, the interest rate on new manufactured housing contract
originations by Green Tree). The following information is given solely to
illustrate the effect of different assumed rates of default and different
prevailing interest rates on the projected weighted average life of the
Certificates under the numerous assumptions described in this Prospectus and is
not a prediction of the weighted average life that might actually be
experienced on the Certificates.
The weighted average lives of the Certificates in the following tables, and
the graphs included in Appendix I, were determined using the following
assumptions and specifications:
(i) no delinquencies are experienced on the Contracts;
(ii) the Contracts have the characteristics described in Appendix I;
(iii) each Contract's cash flow is applied under the related Securitized
Pool or GNMA Certificate, as applicable, in the manner described in
Appendix I and the documents relating to such Securitized Pool or GNMA
Certificate, including "triggers," "Accelerated Principal Distributions"
and other features described therein and in "The Trust Property";
(iv) all Contract balances, security balances and any related collateral
balances were calculated as of January 1, 1994 or January 15, 1994, as
appropriate;
(v) Green Tree continues to service the Contracts and to perform all its
obligations under the documents relating to each Securitized Pool and GNMA
Certificate;
(vi) Green Tree's servicing fee with respect to each Contract is 0.50%
per annum;
(vii) any cash held by the Securitized Pools or GNMA custodial accounts
is reinvested at 3% per annum;
(viii) the Certificates bear an Interest Rate of %;
(ix) the original principal amount of the Certificates is $508,000,000;
(x) Green Tree does not exercise its right to repurchase any of the
Contracts held in the Securitized Pools, as described under "Inside
Refinancing Payments";
(xi) the Subordinated Certificateholders do not exercise their right to
cause the Trust to redeem the Certificates;
(xii) the Certificates are issued on March , 1994, and distributions are
made on the Certificates on the 15th of each month, commencing February 15,
1994;
(xiii) there is no delay between a default on a Contract and final
liquidation of the Contract; and
(xiv) the recovery on each Contract following a default is equal to 100%
of the Manufactured Housing Projected Recovery Assumption.
The first three tables presented below assume that 50% of all prepayments due
to refinancing of the Contracts are refinanced by Green Tree (with
corresponding inside refinancing payments made by Green Tree). The next three
tables below assume that all prepayments due to refinancings are refinanced by
a third party (and thus no inside refinancing payments are made by Green Tree).
31
<PAGE>
CERTIFICATE PRINCIPAL AMORTIZATION TABLE(1)
(WITH INSIDE REFINANCING PAYMENTS (2))
<TABLE>
<CAPTION>
100% OF DEFAULT ASSUMPTION 125% OF DEFAULT ASSUMPTION
--------------------------------------------- ----------------------------------------
INTEREST RATE SHIFTS (3) INTEREST RATE SHIFTS (3)
--------------------------------------------- ----------------------------------------
-300 -200 -100 0 +100 +200 +300 -300 -200 -100 0 +100 +200 +300
---- ----- ---- ----- ----- ----- ----- ---- ---- ---- ---- ---- ---- ----
<CAPTION>
150% OF DEFAULT ASSUMPTION
---------------------------------------------
INTEREST RATE SHIFTS (3)
---------------------------------------------
-300 -200 -100 0 +100 +200 +300
----- ----- ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AT JANUARY 15,
Initial Percent-
age............. 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
1995............ 75 76 77 78 79 79 79 76 77 78 79 80 80 80
1996............ 56 57 58 59 60 61 61 59 60 61 62 63 63 63
1997............ 42 42 42 42 43 43 44 46 46 46 46 47 48 48
1998............ 30 28 26 26 26 26 27 35 34 33 32 32 33 33
1999............ 19 16 12 11 10 11 11 26 23 20 18 18 19 19
2000............ 7 3 0 0 0 0 0 14 11 7 5 6 6 6
2001............ 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2002............ 0 0 0 0 0 0 0 0 0 0 0 0 0 0
<S> <C> <C> <C> <C> <C> <C> <C>
AT JANUARY 15,
Initial Percent-
age............. 100% 100% 100% 100% 100% 100% 100%
1995............ 77 78 79 80 80 81 81
1996............ 62 62 63 64 65 66 66
1997............ 50 50 50 51 52 53 53
1998............ 41 40 39 38 39 39 40
1999............ 33 31 27 26 26 27 27
2000............ 21 18 15 14 15 15 16
2001............ 8 3 0 0 0 0 0
2002............ 0 0 0 0 0 0 0
Projected
CPR (4)......... 11.8% 10.0% 7.7% 6.4% 5.8% 5.5% 5.4% 12.1% 10.2% 8.0% 6.6% 6.0% 5.8% 5.7%
Weighted Average
Life (in
years) (5)...... 2.81 2.75 2.68 2.67 2.70 2.72 2.73 3.09 3.03 2.95 2.94 2.97 3.00 3.01
Expected Matu-
rity Date: 6/00 4/00 1/00 10/99 10/99 10/99 10/99 1/01 9/00 6/00 5/00 6/00 7/00 7/00
Projected
CPR (4)......... 12.4% 10.5% 8.2% 6.9% 6.3% 6.0% 5.9%
Weighted Average
Life (in
years) (5)...... 3.43 3.35 3.26 3.25 3.30 3.34 3.36
Expected Matu-
rity Date: 8/01 4/01 12/00 11/00 11/00 12/00 1/01
</TABLE>
- ----
(1) Stated as a percent of the original Certificate principal amount.
(2) Assumes Green Tree refinances 50% of all refinanced loans. See "The Trust
Property--Inside Refinancing Payments."
(3) The Interest Rate Shifts represent shifts in Green Tree's average Contract
Rate. Green Tree's current average Contract Rate is equal to 10.50% with
respect to conventional Contracts and 10.00% with respect to FHA-insured
or VA-guaranteed Contracts. Green Tree believes that, as an approximation
for future movements in its average Contract Rate, investors can use as a
reference changes in the 7-year Treasury Note rate.
(4) The Projected CPR is the 120-month weighted average constant prepayment
rate that would exist for the corresponding Interest Rate shift in Green
Tree's average Contract Rate, rounded to the nearest whole number. A -100
bps shift is equal to a 100 basis point decrease in Green Tree's average
Contract Rate, which would indicate that current obligors could refinance
if they chose to do so at 100 basis points below where they could have
previously refinanced. Therefore the 100 basis point decrease in Contract
Rate implies a higher incentive to refinance.
(5) The Weighted Average Life of a Certificate is determined by (i)
multiplying the amount of each principal payment on such Certificate on
each Distribution Date by the number of years from the date of issuance of
such Certificate to such Distribution Date, (ii) adding the results, and
(iii) dividing the sum by the initial principal amount of such
Certificate.
32
<PAGE>
CERTIFICATE PRINCIPAL AMORTIZATION TABLE(1) (WITHOUT INSIDE REFINANCING
PAYMENTS)
<TABLE>
<CAPTION>
100% OF DEFAULT ASSUMPTION 125% OF DEFAULT ASSUMPTION
-------------------------------------------- -----------------------------------------
INTEREST RATE SHIFTS (2) INTEREST RATE SHIFTS (2)
-------------------------------------------- -----------------------------------------
-300 -200 -100 0 +100 +200 +300 -300 -200 -100 0 +100 +200 +300
----- ----- ---- ---- ---- ----- ----- ---- ---- ---- ----- ---- ---- ----
<CAPTION>
150% OF DEFAULT ASSUMPTION
-------------------------------------------
INTEREST RATE SHIFTS (2)
-------------------------------------------
-300 -200 -100 0 +100 +200 +300
------ ----- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AT JANUARY 15,
Initial Percent-
age............. 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
1995............ 82 81 81 80 80 80 80 82 82 81 81 81 81 80
1996............ 69 67 64 62 62 61 61 71 69 67 65 64 64 64
1997............ 59 55 50 47 45 44 44 63 59 54 51 50 49 49
1998............ 51 45 37 31 29 28 27 56 51 43 38 35 34 34
1999............ 44 36 25 17 14 12 11 50 43 32 25 22 20 19
2000............ 35 25 12 4 0 0 0 42 33 20 13 9 7 6
2001............ 22 10 0 0 0 0 0 30 19 3 0 0 0 0
2002............ 10 0 0 0 0 0 0 19 6 0 0 0 0 0
2003............ 0 0 0 0 0 0 0 9 0 0 0 0 0 0
2004............ 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2005............ 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2006............ 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Projected
CPR (3)......... 11.8% 10.0% 7.7% 6.4% 5.8% 5.5% 5.4% 12.1% 10.2% 8.0% 6.6% 6.0% 5.8% 5.7%
Weighted Average
Life (in
years) (4)...... 4.23 3.71 3.19 2.94 2.83 2.77 2.75 4.77 4.13 3.53 3.24 3.12 3.07 3.04
Expected Matu-
rity Date: 12/02 10/01 9/00 4/00 1/00 12/99 11/99 2/04 7/02 4/01 10/00 8/00 7/00 7/00
<CAPTION>
150% OF DEFAULT ASSUMPTION
-------------------------------------------
INTEREST RATE SHIFTS (2)
-------------------------------------------
-300 -200 -100 0 +100 +200 +300
------ ----- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
AT JANUARY 15,
Initial Percent-
age............. 100% 100% 100% 100% 100% 100% 100%
1995............ 83 83 82 82 81 81 81
1996............ 74 72 69 68 67 67 67
1997............ 67 64 59 56 54 54 53
1998............ 62 56 49 44 42 41 40
1999............ 57 50 40 33 30 28 28
2000............ 49 40 28 21 18 17 16
2001............ 38 28 13 4 1 0 0
2002............ 28 15 0 0 0 0 0
2003............ 19 5 0 0 0 0 0
2004............ 11 0 0 0 0 0 0
2005............ 4 0 0 0 0 0 0
2006............ 0 0 0 0 0 0 0
Projected
CPR (3)......... 12.4% 10.5% 8.2% 6.9% 6.3% 6.0% 5.9%
Weighted Average
Life (in
years) (4)...... 5.46 4.64 3.92 3.59 3.46 3.41 3.39
Expected Matu-
rity Date: 10/05 7/03 11/01 4/01 2/01 1/01 1/01
</TABLE>
- ----
(1) Stated as a percent of the original Certificate principal amount.
(2) The Interest Rate Shifts represent shifts in Green Tree's average Contract
Rate. Green Tree's current average Contract Rate is equal to 10.50% with
respect to conventional Contracts and 10.00% with respect to FHA-insured
or VA-guaranteed Contracts. Green Tree believes that, as an approximation
for future movements in its average Contract Rate, investors can use as a
reference changes in the 7-year Treasury Note rate.
(3) The Projected CPR is the 120-month weighted average constant prepayment
rate that would exist for the corresponding Interest Rate shift in Green
Tree's average Contract Rate, rounded to the nearest whole number. A -100
bps shift is equal to a 100 basis point decrease in Green Tree's average
Contract Rate, which would indicate that current obligors could refinance
if they chose to do so at 100 basis points below where they could have
previously refinanced. Therefore the 100 basis point decrease in Contract
Rate implies a higher incentive to refinance.
(4) The Weighted Average Life of a Certificate is determined by (i)
multiplying the amount of each principal payment on such Certificate on
each Distribution Date by the number of years from the date of issuance of
such Certificate to such Distribution Date, (ii) adding the results, and
(iii) dividing the sum by the initial principal amount of such
Certificate.
33
<PAGE>
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the terms of the Trust Agreement,
a form of which has been filed as an exhibit to the Registration Statement. A
copy of the Trust Agreement will be filed with the Commission following the
issuance of the Certificates. Whenever provisions of the Trust Agreement are
referred to, such provisions are incorporated herein by reference.
DISTRIBUTIONS
Distributions of interest and principal to Certificateholders will be made on
each Distribution Date in an amount equal to their respective Percentage
Interests multiplied by the Certificateholder's Interest Distributable Amount
and the Certificateholders' Principal Distributable Amount, if any.
Distributions will be applied first to the payment of interest and then to the
payment of principal from the Amount Available (as defined below). In the event
that the Amount Available in the Certificate Account is not sufficient to make
a full distribution to the Certificateholders of the Certificateholders'
Interest Distributable Amount, the amount of the deficiency will be carried
forward as an amount that the Certificateholders are entitled to receive on the
next Distribution Date. Any amount carried forward will, to the extent legally
permissible, bear interest at the Interest Rate.
Each distribution with respect to a Book-Entry Certificate will be paid to
DTC, which will credit the amount of such distribution to the accounts of its
Participants in accordance with its normal procedures. Each Participant will be
responsible for disclosing such distribution to the Certificate Owners that it
represents and to each indirect participating brokerage firm (a "brokerage
firm" or "indirect participating firm") for which it acts as agent. Each
brokerage firm will be responsible for disbursing funds to the Certificate
Owners that it represents. All such credits and disbursements with respect to a
Book-Entry Certificate are to be made by DTC and the Participants in accordance
with DTC's rules.
Green Tree, as servicer, will furnish to the Trustee, and the Trustee will
send with each distribution on a Distribution Date to each Certificateholder, a
statement setting forth, among other things, (i) the amount of such
distribution allocable to interest and (ii) the amount of such distribution
allocable to principal. Such amounts will be expressed as a dollar amount per
$1,000 of the original principal amount of the Certificates.
DISTRIBUTIONS OF INTEREST INCOME
On each Distribution Date, commencing March 15, 1994, the Certificateholders
will be entitled to distributions in an amount equal to the amount of interest
accrued on the outstanding principal amount of the Certificates at the Interest
Rate (the "Certificateholders' Interest Distributable Amount"). Interest
distributable on a Distribution Date will accrue from the most recent
Distribution Date on which interest distributions have been made to but
excluding such Distribution Date and will be calculated on the basis of a 360-
day year consisting of twelve 30-day months. Interest distributions due for any
Distribution Date but not distributed on such Distribution Date will be due on
the next Distribution Date together with interest on such amount at the
Interest Rate (to the extent legally permissible). Interest distributions with
respect to the Certificates will be made from the Amount Available in the
Certificate Account before the payment of accrued and unpaid trustee's fees and
other administrative fees of the Trust. Finance I and Finance II will be
entitled to receive a distribution of interest on March 15, 1994, equal to
interest accrued from January 15, 1994 to the Closing Date. Certificateholders
of record on March 14, 1994 will receive a distribution of interest on March
15, 1994 equal to the interest accrued on the initial principal amount of
Certificates at the Interest Rate from the Closing Date to March 15, 1994.
DISTRIBUTIONS OF PRINCIPAL PAYMENTS
Certificateholders will be entitled to receive, as payments of principal, the
Certificateholders' Principal Distributable Amount to the extent of the
Remaining Amount Available (as defined below) in the Certificate Account on
each Distribution Date. Distributions with respect to principal payments will
be made from the
34
<PAGE>
Amount Available in the Certificate Account after payment of the
Certificateholders' Interest Distributable Amount and any accrued and unpaid
Trustee's fees and other administrative fees of the Trust which Green Tree or
the Subordinated Certificateholders were obligated to pay but failed to pay
(the "Remaining Amount Available").
REPORTS TO CERTIFICATEHOLDERS
Green Tree will furnish to the Trustee, and the Trustee will include with
each distribution to a Certificateholder, a statement in respect of the related
Distribution Date setting forth, among other things:
(a) the Certificateholders' Interest Distributable Amount;
(b) the Certificateholders' Principal Distributable Amount;
(c) the outstanding principal amount of the Certificates, after giving
effect to all payments reported under (b) above on such date;
(d) the projected remaining aggregate cashflow value of the Trust
Property, present valued using a % discount rate;
(e) before allocation of the distribution on the current Distribution
Date, the aggregate amount on deposit in the reserve funds attributable to
the Residual Assets;
(f) the weighted average CPR of the Contracts for the prior month;
(g) the weighted average conditional default rate of the Contracts for
the prior month;
(h) the annualized net loss percentage of the Contracts for the prior
month; and
(i) information regarding delinquent Contracts as of the prior month.
Each amount set forth pursuant to subclauses (a) and (b) will be expressed as a
dollar amount per $1,000 of the original principal amount of the Certificates.
In addition, within a reasonable period of time after the end of each
calendar year, Green Tree, as servicer, will furnish a report to each
Certificateholder of record at any time during such calendar year as to
aggregate amounts reported pursuant to (a) and (b) above for such calendar
year.
For the purposes hereof, the following terms shall have the following
meanings:
"Amount Available" means, with respect to any Distribution Date, the sum of
the amounts contained in the Certificate Account for any Monthly Period.
"Certificateholders' Interest Distributable Amount" means, with respect to
any Distribution Date (other than the first Distribution Date), one month's
interest at the Interest Rate on the outstanding principal amount of the
Certificates (computed on the basis of a 360-day year of twelve 30-day months),
plus any accrued and unpaid interest with respect to a prior Distribution Date
together (to the extent legally permissible) with interest thereon at the
Interest Rate.
"Certificateholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the lesser of the Certificateholders' Monthly Principal
Distributable Amount for such Distribution Date or the Remaining Amount
Available for such Distribution Date; provided, however, that the
Certificateholders' Principal Distributable Amount shall not exceed the
outstanding principal amount of the Certificates.
"Remaining Amount Available" means, with respect to any Distribution Date,
the amount remaining in the Certificate Account after payment of the
Certificateholders' Interest Distributable Amount and payment to the Trustee of
any accrued and unpaid trustee fees, to the extent not paid by Green Tree or
the Subordinated Certificateholders.
LISTS OF CERTIFICATEHOLDERS
At such time, if any, as Definitive Certificates (as defined below) have been
issued, the Trustee will, upon written request by three or more
Certificateholders or one or more holders of Certificates evidencing not less
35
<PAGE>
than 25% of the outstanding principal balance of the Certificates, within five
Business Days after provision to the Trustee of a statement of the applicants'
desire to communicate with other Certificateholders about their rights under
the Trust Agreement or the Certificates and a copy of the communication that
the applicants propose to transmit, afford such Certificateholders access
during business hours to the current list of Certificateholders for purposes of
communicating with other Certificateholders with respect to their rights under
the Trust Agreement. The Trust Agreement will not provide for holding any
annual or other meetings of Certificateholders.
OPTIONAL PREPAYMENT
If the Subordinated Certificateholders exercise their option to prepay the
Certificates when the aggregate outstanding principal amount of the
Certificates declines to 10% or less of the original principal amount of the
Certificates, Certificateholders will receive an amount in respect of the
Certificates equal to the aggregate outstanding principal amount of the
Certificates together with all accrued and unpaid interest, which distribution
will effect early retirement of the Certificates. See "Description of the Trust
Agreement--Termination."
RESTRICTIONS ON TRANSFER
The Certificates will be subject to the following restrictions on transfer,
and each Certificate will contain a legend describing such restrictions.
The Certificates may not be acquired by a "disqualified organization" (as
defined below). By acceptance of a Certificate, each purchaser will be deemed
to represent that it is not a disqualified organization. Accordingly, a
purchase by a disqualified organization shall be void and of no effect. A
"disqualified organization" means (i) the United States, any State or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of the foregoing (not including instrumentalities
described in Section 168(h)(2)(D) of the Code or the Federal Home Loan Mortgage
Corporation), (ii) any organization (other than a cooperative described in
Section 521 of the Code) that is exempt from federal income tax, unless it is
subject to the tax imposed by Section 511 of the Code or (iii) any organization
described in Section 1381(a)(2)(C) of the Code.
A pass-through entity may acquire Certificates. Such investors should be
aware, however, that under certain circumstances a tax may be imposed on a
pass-through entity which has (i) a disqualified organization (as defined
above) as a record holder of an interest therein and (ii) excess inclusion
income, as defined in the REMIC provisions of the Code, as a result of its
investment in the Certificates. For these purposes, a "pass-through entity"
means any regulated investment company, real estate investment trust, trust,
partnership or certain other entities described in Section 860E(e)(6) of the
Code. In addition, a person holding an interest in a pass-through entity as a
nominee for another person will, with respect to such interest, be treated as a
pass-through entity. Pass-through entities considering an investment in
Certificates are urged to consult with their own tax advisor with respect to
these matters.
The Trust Agreement will provide that any attempted or purported transfer in
violation of these transfer restrictions will be null and void and will vest no
rights in any purported transferee.
REGISTRATION OF THE CERTIFICATES
The Certificates will initially be registered in the name of Cede & Co., the
nominee of DTC. DTC is a limited-purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
1934 Act. DTC accepts securities for deposit from its participating
organizations ("Participants") and facilitates the clearance and settlement of
securities transactions between Participants in such securities through
electronic book-entry changes in accounts of Participants, thereby eliminating
the need for physical movement of certificates. Participants include securities
brokers and dealers, banks and trust companies and clearing corporations and
36
<PAGE>
may include certain other organizations. Indirect access to the DTC system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly ("indirect participants").
Certificate Owners who are not Participants but desire to purchase, sell or
otherwise transfer ownership of the Certificates may do so only through
Participants (unless and until Definitive Certificates, as defined below, are
issued). In addition, Certificate Owners will receive all distributions of
principal of, and interest on, the Certificates from the Trustee through DTC
and Participants. Certificate Owners will not receive or be entitled to receive
certificates representing their respective interests in the Certificates,
except under the limited circumstances described below.
Unless and until Definitive Certificates (as defined below) are issued, it is
anticipated that the only "Certificateholder" of the Certificates will be Cede
& Co., as nominee of DTC. Certificate Owners will not be recognized by the
Trustee as Certificateholders as that term is used in the Trust Agreement.
Certificate Owners are only permitted to exercise the rights of
Certificateholders indirectly through Participants and DTC.
While Certificates are outstanding (except under the circumstances described
below), under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry transfers
among Participants on whose behalf it acts with respect to the Certificates and
is required to receive and transmit distributions of principal of, and interest
on, the Certificates. Participants with whom Certificate Owners have accounts
with respect to Certificates are similarly required to make book-entry
transfers and receive and transmit such distributions on behalf of their
respective Certificate Owners. Accordingly, although Certificate Owners will
not possess certificates, the Rules provide a mechanism by which Certificate
Owners will receive distributions and will be able to transfer their interests.
Certificates will be issued in registered form to Certificate Owners, or
their nominees, rather than to DTC (such Certificates being referred to herein
as "Definitive Certificates"), only if (i) DTC, the Administrator or Finance I
advise the Trustee in writing that DTC is no longer willing or able to
discharge properly its responsibilities as nominee and depository with respect
to the Certificates and the Administrator Finance I is unable to locate a
qualified successor, (ii) Finance I at its sole option advises the Trustee in
writing that it elects to terminate the book-entry system through DTC or (iii)
if an Event of Default shall have occurred and be continuing, Certificate
Owners having a beneficial interest in the Certificates at least equal to a
majority of the aggregate outstanding principal amount of the Certificates
advise the Trustee, through DTC, that continuation of a book-entry system is no
longer in their best interests. Upon issuance of Definitive Certificates to
Certificate Owners, such Certificates will be transferable directly (and not
exclusively on a book-entry basis) and registered holders will deal directly
with the Trustee with respect to transfers, notices and distributions.
DTC has advised Finance I that, unless and until Definitive Certificates are
issued, DTC will take any action permitted to be taken by a Certificateholder
under the Trust Agreement only at the direction of one or more Participants to
whose DTC accounts the Certificates are credited. DTC has advised Finance I
that DTC will take such action with respect to any fractional interest of the
Certificates only at the direction of and on behalf of such Participants
beneficially owning a corresponding fractional interest of the Certificates.
DTC may take actions, at the direction of the related Participants, with
respect to some Certificates which conflict with actions taken with respect to
other Certificates.
Issuance of Certificates in book-entry form rather than as physical
certificates may adversely affect the liquidity of the Certificates in the
secondary market and the ability of Certificate Owners to pledge them. In
addition, since distributions on the Certificates will be made by the Trustee
to DTC and DTC will credit such distributions to the accounts of its
Participants, with the Participants further crediting such distributions to the
accounts of indirect participants or Certificate Owners, Certificate Owners may
experience delays in the receipt of such distributions.
37
<PAGE>
DESCRIPTION OF THE TRUST DOCUMENTS
The following summary describes certain terms of the Finance I Note, the
Trust Agreement, the Transfer Agreement and the Assignments (together, the
"Trust Documents"). Forms of the Trust Documents have been filed as exhibits to
the Registration Statement. Copies of the Trust Documents will be filed with
the Commission following the issuance of the Certificates.
CERTIFICATE ACCOUNT
Pursuant to the Trust Agreement, the Trustee will establish and maintain an
account, in the name of the Trust, in which amounts available for distribution
to Certificateholders will be deposited and from which all distributions to
Certificateholders will be made (the "Certificate Account").
EVENTS OF DEFAULT
Pursuant to the Trust Agreement, "Events of Default" will consist of (i) any
failure in the payment of the Certificateholders' Interest Distributable Amount
with respect to a Distribution Date, which failure has continued for a period
of 6 months after such Distribution Date or (ii) any failure to pay the full
principal amount of the Certificates on or before the Distribution Date
occurring in February 2004.
Pursuant to the Finance I Note, "Events of Default" will consist of (i) any
failure to make timely installments of interest due thereunder, which failure
has continued for a period of 6 months after such Distribution Date, or (ii)
any failure to pay the full principal amount of the Finance I Note on or before
the Distribution Date occurring in February 2004.
If an Event of Default with respect to the Certificates occurs and is
continuing, the Trustee or Certificate Owners beneficially owning at least 25%
in aggregate outstanding principal amount of the Certificates may declare the
entire principal amount of the Certificates to be due and payable immediately.
Such declaration may, under certain circumstances, be rescinded by a
Certificate Majority (as defined in the Trust Agreement).
If the Certificates have been declared due and payable following an Event of
Default, the Trustee may liquidate all or any portion of the Trust Property, or
elect to maintain possession of the Trust Property and continue to apply
collections from the Trust Property as if there had been no declaration of
acceleration. The Trustee will be prohibited from selling the Trust Property
following an Event of Default, unless (i) the holders of all the outstanding
Certificates consent to such sale; or (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on the
outstanding Certificates at the time of such sale; or (iii) the Trustee
determines that the collections on the Trust Property will not be sufficient on
an ongoing basis to make all payments of interest on the Certificates as such
payments become due and to pay the outstanding principal amount of the
Certificates at maturity, and the Trustee obtains the consent of the holders of
66 2/3% of the aggregate outstanding amount of the Certificates.
The Trustee and the Certificate Owners will have similar rights to liquidate
the Fee Assets following an Event of Default under the Finance I Note.
AMENDMENT
The Trust Agreement may be amended by the Subordinated Certificateholders and
the Trustee but without the consent of any of the Certificateholders, to cure
any ambiguity or to correct or supplement any provision therein, provided that
such action will not, in the opinion of counsel (which may be internal counsel
to the Subordinated Certificateholders) materially and adversely affect the
interests of any Certificateholder. The Trust Agreement may also be amended by
the Subordinated Certificateholders and the Trustee and a Certificate Majority
for the purpose of adding any provisions to or changing in any manner or
eliminating
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<PAGE>
any of the provisions of the Trust Agreement or of modifying, in any matter,
the rights of the Certificateholders. No such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of, or
distributions that are required to be made on any Certificate or the Interest
Rate or (ii) reduce the percentage of the aggregate outstanding principal
amount of the Certificates required to consent to any such amendment, without
the consent of the holders of all Certificates then outstanding.
The Transfer Agreement may be amended by all of the parties thereto; provided
that no amendment may materially and adversely affect the interests of the
Certificateholders.
TERMINATION
The Trust and the respective obligations of the Subordinated
Certificateholders and the Trustee pursuant to the related Trust Documents will
terminate upon the later of (i) the Distribution Date immediately following the
maturity of the Finance I Note or the retirement of the last Residual Asset or
other liquidation of the last item of Trust Property, (ii) the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
related Trust Documents, (iii) following the payment in full of all principal
and accrued interest on the Certificates, by vote of all the Subordinated
Certificateholders, or (iv) upon the occurrence of a Liquidation Event.
In order to avoid excessive administrative expense, the Subordinated
Certificateholders will be permitted, at their option, to cause the Trust to
redeem the Certificates on any Distribution Date in which the aggregate
outstanding principal amount of the Certificates is equal to or less than 10%
of the original principal amount of the Certificates at a price equal to the
unpaid principal amount of the Certificates plus all accrued and unpaid
interest thereon.
In the event that a Dissolution Event (as defined in the Trust Agreement)
shall occur with respect to one but not both Subordinated Certificateholders,
the remaining Subordinated Certificateholder shall, within 90 days of such
Dissolution Event, (i) select a successor Subordinated Certificateholder and
(ii) deliver to the Trustee an opinion of counsel to the effect that the Trust
will not be an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes. In the event that (i) the
remaining Subordinated Certificateholder is unable to locate a successor
Subordinated Certificateholder or to obtain such an opinion or (ii) a
Dissolution Event occurs with respect to both Subordinated Certificateholders,
the Trust will terminate.
The Trustee will give written notice of the final distribution with respect
to the Certificates to each Certificateholder of record. The final distribution
to any Certificateholder will be made only upon surrender and cancellation of
such holder's Certificate at the office or agency of the Trustee with respect
to Certificates specified in the notice of termination. In the event that all
Certificateholders do not surrender their Certificates for cancellation within
6 months after the date specified in the notice of termination, the Trustee
shall give a second written notice to the remaining Certificateholders. If
within one year after the second written notice all Certificates have not been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates. Any funds
remaining in the Trust, after the Trustee has taken such measures to locate any
remaining Certificateholders and such measures have failed, will be distributed
to The United Way and the Certificateholders, by acceptance of their
Certificates, will waive any rights with respect to such funds.
THE TRUSTEE
The Trustee, in its individual capacity or otherwise, and any of its
affiliates may hold Certificates in their own names or as pledgee. In addition,
for the purpose of meeting the legal requirements of certain jurisdictions, the
Trustee and the Administrator, acting jointly, with the consent of Finance I,
shall have the power to appoint co-trustees or separate trustees of all or any
part of the Trust. In the event of such appointment, all rights, powers, duties
and obligations conferred or imposed upon the Trustee by the Trust Documents
will be conferred or imposed upon the Trustee and such separate trustee or co-
trustee jointly, or, in any jurisdiction where the Trustee is incompetent or
unqualified to perform certain acts, singly upon such separate trustee or co-
trustee who shall exercise and perform such rights, powers, duties and
obligations solely at the direction of the Trustee.
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<PAGE>
The Trustee may resign at any time, in which event the Subordinated
Certificateholders will be obligated to appoint a successor trustee. The
Subordinated Certificateholders may also remove the Trustee, if the Trustee
ceases to be eligible to serve, becomes legally unable to act, is adjudged
insolvent or is placed in receivership or similar proceedings. In such
circumstances, the Subordinated Certificateholders will be obligated to appoint
a successor trustee. Any resignation or removal of the Trustee and appointment
of a successor trustee will not become effective until acceptance of the
appointment by the successor trustee.
DUTIES OF THE TRUSTEE
The Trustee will make no representation as to the validity or sufficiency of
any Trust Document, the Certificates (other than its execution of the
Certificates) or any related documents, and will not be accountable for the use
or application by Green Tree of any funds in respect of the Certificates prior
to deposit in the Certificate Account.
The Trustee will be required to perform only those duties specifically
required of it under the Trust Agreement. Generally, those duties will be
limited to the receipt of the various certificates, reports or other
instruments required to be furnished by Green Tree to the Trustee under the
Trust Agreement, in which case it will only be required to examine such
certificates, reports or instruments to determine whether they conform
substantially to the requirements of the Trust Agreement.
The Trustee will be under no obligation to exercise any of the rights or
powers vested in it by the Trust Agreement or to institute, conduct, or defend
any litigation thereunder or in relation thereto at the request, order or
direction of any Subordinated Certificateholders, unless such Subordinated
Certificateholders have offered the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby. No Certificate Owner will have any right under the Trust Documents to
institute any proceeding with respect to such Trust Documents, unless such
Certificate Owner has given the Trustee written notice of default and unless
Certificate Owners beneficially owning not less than 25% of the aggregate
principal balance of the Certificates then outstanding have made written
request to the Trustee to institute such proceeding in its own name as Trustee
thereunder and have offered to the Trustee reasonable indemnity, and the
Trustee for 30 days after the receipt of such notice, request and offer to
indemnify has neglected or refused to institute any such proceedings.
USE OF PROCEEDS
Approximately $ of the net proceeds of the sale of the Certificates will be
loaned to Finance I in return for the Finance I Note. The remaining net
proceeds of the sale of the Certificates will be paid to Finance I and Finance
II, as the holders of the Subordinated Certificates. Finance I and Finance II
will in turn remit substantially all such proceeds to Green Tree in the form of
a dividend. Green Tree will use such funds for general corporate purposes,
including the origination of additional manufactured housing contracts, the
costs of carrying such contracts until sold and other expenses of pooling and
selling such contracts, and to fund Green Tree's future growth.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain federal income tax
consequences relating to the purchase, ownership, and disposition of the
Certificates. The discussion is based upon the current provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
Regulations promulgated thereunder and judicial or ruling authority, all of
which are subject to change, which change may be retroactive. The discussion
does not purport to deal with federal income tax consequences applicable to all
categories of investors, some of which may be subject to special rules.
Moreover, there are no cases or Internal Revenue Service (the "Service")
rulings on similar transactions involving the issuance of interests with terms
similar to those of the Certificates. As a result, the Service may disagree
with all or a part of the discussion below. INVESTORS SHOULD CONSULT THEIR OWN
TAX ADVISORS TO DETERMINE THE FEDERAL, STATE, LOCAL, AND ANY OTHER TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF CERTIFICATES.
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<PAGE>
The Trust will be provided with an opinion of Dorsey & Whitney, counsel to
Green Tree, regarding certain federal income tax matters discussed below. Such
an opinion, however, is not binding on the Service or the courts. No ruling on
any of the issues discussed below will be sought from the Service.
TAX CHARACTERIZATION OF THE TRUST
The Subordinated Certificateholders and the Trustee will agree to treat the
Trust as a partnership for federal income tax purposes. Dorsey & Whitney will
deliver its opinion that the Trust will not be an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes,
with the result that the Trust itself will not be subject to federal income
tax. This opinion will be based on the assumption that the terms of the Trust
Agreement and related documents will be complied with, and on counsel's
conclusions that (1) the Trust will not have certain characteristics necessary
for a business trust to be classified as an association taxable as a
corporation and (2) the nature of the interests in and the income of the Trust,
including the status of the Finance I Note as debt for federal income tax
purposes, will exempt it from the rule that certain taxable mortgage pools or
publicly traded partnerships are taxable as corporations.
If the Trust were taxable as a corporation for federal income tax purposes,
the Trust would be subject to corporate income tax on its taxable income. Any
such corporate income tax could materially reduce cash available to make
payments on the Certificates.
TAX CONSEQUENCES TO HOLDERS OF CERTIFICATES
Treatment of Certificates as Indebtedness. The Trustee and the Subordinated
Certificateholders will agree, and the Certificateholders will agree by their
purchase of Certificates, to treat the Certificates as debt for federal income
tax purposes. Although there are no regulations, published rulings or judicial
decisions involving the characterization for federal income tax purposes of
interests with the same terms as the Certificates, and although the result is
not free from doubt in view of the treatment of this transaction by Green Tree
for purposes of its financial statements prepared in accordance with generally
accepted accounting principles and certain other features of the Certificates,
on balance, in the opinion of Dorsey & Whitney the Certificates will be
classified as debt for federal income tax purposes. The discussion below
assumes this characterization of the Certificates is correct.
Interest Income on the Certificates. As a general rule, interest paid or
accrued on the Certificates, as well as market discount and original issue
discount, if any, will be treated as ordinary income to the holders thereof. A
Certificateholder using the accrual method of accounting for federal income tax
purposes is required to include interest paid or accrued on the Certificates in
ordinary income as such interest accrues, while a Certificateholder using the
cash receipts and disbursements method of accounting for federal income tax
purposes must include such interest in ordinary income when payments are
received (or made available for receipt) by such holder. It is anticipated that
the Certificates will not be issued with "original issue discount" ("OID")
within the meaning of Section 1273 of the Code, and that the Trust will not
take any OID deduction with respect thereto.
Market Discount. The Certificates, whether or not issued with original issue
discount, will be subject to the "market discount rules" of section 1276 of the
Code. In general, these rules provide that if the holder of a Certificate
purchases it at a market discount (i.e., a discount from its original issue
price plus any accrued original issue discount) that exceeds a de minimis
amount specified in the Code, and thereafter recognizes gain upon a
disposition, the lesser of (i) such gain or (ii) the accrued market discount
will be taxed as ordinary interest income. Generally, the accrued market
discount will be the total market discount on the Certificate multiplied by a
fraction, the numerator of which is the number of days the holder held the
Certificate and the denominator of which is the number of days from the date
the holder acquired the Certificate until its maturity date. The holder may
elect, however, to determine accrued market discount under the constant-yield
method.
Limitations imposed by the Code which are intended to match deductions with
the taxation of income may defer deductions for interest on indebtedness
incurred or continued, or short-sale expenses incurred, to
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<PAGE>
purchase or carry a Certificate with accrued market discount. A
Certificateholder may elect to include market discount in gross income as it
accrues and, if such Certificateholder makes such an election, is exempt from
this rule. The adjusted basis of a Certificate subject to such election will be
increased to reflect market discount included in gross income, thereby reducing
any gain or increasing any loss on a sale or taxable disposition.
Amortizable Bond Premium. In general, if a Certificateholder purchases a
Certificate at a premium (i.e., an amount in excess of the amount payable upon
the maturity thereof), such Certificateholder will be considered to have
purchased such Certificate with "amortizable bond premium" equal to the amount
of such excess. Such Certificateholder may elect to deduct the amortizable bond
premium as it accrues under a constant-yield method over the remaining term of
the Certificate. Such Certificateholder's tax basis in the Certificate will be
reduced by the amount of the amortizable bond premium deducted. Any such
election shall apply to all debt instruments (other than instruments the
interest on which is excludible from gross income) held by the
Certificateholder at the beginning of the first taxable year to which the
election applies or thereafter acquired and is irrevocable without the consent
of the Service. Bond premium on a Certificate held by a Certificateholder who
does not elect to deduct the premium will decrease the gain or increase the
loss otherwise recognized on the disposition of the Certificate.
Sale or Other Disposition. If a Certificateholder sells a Certificate, the
Certificateholder will recognize gain or loss in an amount equal to the
difference between the amount realized on the sale and the Certificateholder's
adjusted tax basis in the Certificate. The adjusted tax basis of a Certificate
to a particular Certificateholder generally will equal the Certificateholder's
cost for the Certificate, increased by any market discount, OID and gain
previously included by such Certificateholder in income with respect to the
Certificate and decreased by principal payments previously received by such
Certificateholder and the amount of bond premium previously amortized with
respect to the Certificate. Any such gain or loss will be capital gain or loss
if the Certificate was held as a capital asset, except for gain representing
accrued interest and accrued market discount not previously included in income,
and will be long-term capital gain or loss if the Certificate was held for more
than one year. Capital losses generally may be used only to offset capital
gains.
Foreign Holders. Generally, interest paid to a Certificateholder who is a
nonresident alien individual or a foreign corporation and who does not hold the
Certificate in connection with a United States trade or business will be
treated as "portfolio interest" and therefore will be exempt from the 30%
withholding tax. Such a Certificateholder will be entitled to receive interest
payments on the Certificates free of United States federal income tax provided
that such Certificateholder periodically provides the Trustee (or other person
who would otherwise be required to withhold tax) with a statement certifying
under penalty of perjury that such Certificateholder is not a United States
person and provides the name and address of such Certificateholder. Such a
Certificateholder will not be subject to federal income tax on gain from the
disposition of a Certificate unless the Certificateholder is an individual who
is present in the United States for 183 days or more during the taxable year in
which the disposition takes place and certain other requirements are met.
Tax Administration and Reporting. The Trustee will furnish to each
Certificateholder with each distribution a statement setting forth the amount
of such distribution allocable to principal and to interest. Reports will be
made annually to the Service and to holders of record that are not excepted
from the reporting requirements regarding information as may be required with
respect to interest and original issue discount, if any, with respect to the
Certificates.
Backup Withholding. Under certain circumstances, a Certificateholder may be
subject to "backup withholding" at a 31% rate. Backup withholding may apply to
a Certificateholder who is a United States person if the holder, among other
circumstances, fails to furnish such holder's Social Security number or other
taxpayer identification number to the Trustee. Backup withholding may apply,
under certain circumstances, to a Certificateholder who is a foreign person if
the Certificateholder fails to provide the Trustee or the Certificateholder's
securities broker with the statement necessary to establish the exemption from
federal income and withholding tax on interest on the Certificate. Backup
withholding, however, does
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<PAGE>
not apply to payments on a Certificate made to certain exempt recipients, such
as corporations and tax-exempt organizations, and to certain foreign persons.
Certificateholders should consult their tax advisors for additional information
concerning the potential application of backup withholding to payments received
by them with respect to a Certificate.
Possible Alternative Treatment of the Certificates. If the Service were
successfully to assert that the Certificates did not represent debt for federal
income tax purposes, the Certificates would probably be treated as equity
interests in the Trust. If so treated, the Trust might be taxable as a
corporation with the adverse consequences described above (and the taxable
corporation would not be able to reduce its taxable income by deductions for
interest expense on Certificates recharacterized as equity). Alternatively,
based on the opinion of Dorsey & Whitney, because the Finance I Note will be
treated as debt for federal income tax purposes, the Trust would not be
characterized as a publicly traded partnership and would therefore continue to
be treated as an entity that is not taxable as a corporation. See "Tax
Characterization of the Trust," above. Under these circumstances, the Trust
would report each Certificateholder's allocable share of items of Trust income
and expense to Certificateholders and the Service on Schedule K-1. However, any
such characterization of the Certificates as equity interests is not expected
to result in a materially different amount of taxable income being realized by
Certificateholders as compared to the amount of income expected to be realized
from treatment of the Certificates as indebtedness of the Trust. Nonetheless,
treatment of the Certificates as equity interests in such a partnership could
have adverse tax consequences to certain holders. For example, (i) a portion of
the income allocated to Certificateholders may not be offset by other
deductions on such holder's return, including net operating loss carryforwards;
(ii) a portion of the income allocated to Certificateholders who are subject to
the tax on unrelated business income imposed by Section 511 of the Code may be
treated as unrelated business taxable income; (iii) income to foreign holders
generally would be subject to federal tax and federal tax return filing and
withholding requirements and (iv) individual holders might be subject to
certain limitations on their ability to deduct their share of Trust expenses.
If the Certificates were treated as equity interests in a partnership, each
Certificateholder would be required to separately take into account such
holder's allocated share of income, gains, losses, deductions and credits of
the Trust. The Trust's income will consist primarily of interest income
attributable to the Finance I Note and income attributable to the Residual
Interests. The tax items of a partnership are allocable to its partners in
accordance with the Code, Treasury Regulations and the partnership agreement
(here, the Trust Agreement and related documents). The Trust Agreement will
provide, in general, that, if appropriate, the Certificateholders would be
allocated taxable income of the Trust for each month equal to the sum of (i)
the interest that accrues on the Certificates in accordance with their terms
for such month; and (ii) any other amounts of income payable to the
Certificateholders for such month. All remaining taxable income of the Trust
would be allocated to the Subordinated Certificateholders. Based on the
economic arrangement of the parties, this approach for allocating Trust income
should be permissible under applicable Treasury Regulations, although no
assurance can be given that the Service would not require a greater amount of
income to be allocated to Certificateholders. Moreover, even under the
foregoing method of allocation, Certificateholders may be allocated income
equal to the entire Interest Rate plus the other items described above even
though the Trust might not have sufficient cash to make current cash
distributions of such amount. Thus, cash basis holders will in effect be
required to report income from the Certificates on the accrual basis and
Certificateholders may become liable for taxes on Trust income even if they
have not received cash from the Trust to pay such taxes.
Under this approach, a Certificateholder's allocated share of expenses of the
Trust (including fees to the Trustee but not interest expense) would be
miscellaneous itemized deductions. An individual, an estate, or a trust that
holds a Certificate either directly or through a pass-through entity would be
allowed to deduct such expenses under Section 212 of the Code only to the
extent that, in the aggregate and combined with certain other itemized
deductions, they exceed 2% of the adjusted gross income of the
Certificateholder. In addition, Section 68 of the Code provides that the amount
of itemized deductions (including those provided for in Section 212 of the
Code) otherwise allowable for the taxable year for an individual whose adjusted
gross income exceeds a threshold amount specified in the Code (expected to be
approximately $111,800 in
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1994, in the case of a joint return) will be reduced by the lesser of (i) 3% of
the excess of adjusted gross income over the specified threshold amount or (ii)
80% of the amount of itemized deductions otherwise allowable for such taxable
year. To the extent that a Certificateholder is not permitted to deduct
servicing fees allocable to a Certificate, the taxable income of the
Certificateholder attributable to that Certificate would exceed the net cash
distributions related to such income.
Other Tax Consequences. No advice has been received as to local income,
franchise, personal property, or other taxation in any state or locality, or as
to the tax effect of ownership of Certificates in any state or locality.
Certificateholders are advised to consult their own tax advisors with respect
to any state or local income, franchise, personal property, or other tax
consequences arising out of their ownership of Certificates.
THE DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON
A CERTIFICATEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF CERTIFICATES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on those employee benefit plans,
including individual Retirement Accounts and Individual Retirement Annuities
(collectively "IRAs"), to which they apply ("Plans") and on those persons who
are fiduciaries with respect to such Plans. In accordance with ERISA's general
fiduciary standards, before investing in the Certificates, a Plan fiduciary
should determine whether such an investment is permitted under the governing
Plan instruments and is appropriate for the Plan in view of its overall
investment policy and the composition and diversification of its portfolio.
Other provisions of ERISA and the Code prohibit certain transactions involving
the assets of a Plan and persons who have certain specified relationships to
the Plan ("parties in interest" within the meaning of ERISA or "disqualified
persons" within the meaning of the Code). Prohibited transactions may generate
excise taxes and other liabilities; prohibited transactions involving IRAs may
result in the disqualification of the IRAs. Thus, a Plan fiduciary considering
an investment in the Certificates should also consider whether such an
investment might constitute or give rise to a prohibited transaction under
ERISA or the Code.
Certain transactions involved in the operation of the Trust might be deemed
to constitute prohibited transactions under ERISA and the Code, if assets of
the Trust were deemed to be assets of an investing Plan. ERISA and the Code do
not define "plan assets." The U.S. Department of Labor (the "DOL") has
published a regulation (the "Regulation") which took effect March 13, 1987,
concerning whether or not a Plan's assets will be deemed to include an interest
in the underlying assets of an entity (such as the Trust) for purposes of the
reporting and disclosure and fiduciary responsibility provisions of ERISA and
of the excise tax provisions related to prohibited transactions in the Code if
the Plan acquires an "equity interest" in such entity. The Regulation only
applies to the purchase by a Plan of an "equity interest" in an entity. An
equity interest is defined in the Regulation as an interest in an entity other
than an instrument which is treated as debt under applicable local law, has no
substantial equity features, and which is not a beneficial interest in a trust
or a profit interest in a partnership. If under ERISA the Certificates are not
deemed to be an "equity interest" in the Trust, the Trust's assets would not be
treated as Plan assets solely as a result of the purchase of the Certificates
by a Plan.
The Regulation also contains an exception that provides that if a Plan
acquires a "publicly-offered security," the issuer of the security is not
deemed to hold Plan assets. A publicly-offered security is a security that is
(i) freely transferable, (ii) part of a class of securities that is owned by
100 or more investors
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independent of the issuer and of one another by the conclusion of the offering
and (iii) either is (A) part of a class of securities registered under section
12(b) or 12(g) of the Securities Exchange Act of 1934, or (B) sold to the Plan
as part of an offering of securities to the public pursuant to an effective
registration statement under the Securities Act of 1933 and the class of
securities of which such security is a part is registered under the Securities
Exchange Act of 1934 within 120 days (or such later time as may be allowed by
the Securities and Exchange Commission) after the end of the fiscal year of the
issuer during which the offering of such securities to the public occurred.
It is anticipated that the Certificates will meet the criteria of publicly-
offered securities as set forth above. It is expected (although no assurance
can be given) that the Certificates will be held beneficially by 100
independent persons by the conclusion of the offering; there are no
restrictions imposed on the transfer of the Certificates (other than the
prohibition on transfers to certain "disqualified organizations," as described
under ("Description of the Certificates--Restrictions on Transfer") and the
Certificates will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act of 1933, and they will be
timely registered under the Securities Exchange Act of 1934.
If the Certificates were deemed to be an extension of credit for ERISA
purposes, the purchase of the Certificates by a Plan with respect to which
Green Tree or one of its affiliates is a "party in interest" or "disqualified
person" might be considered a prohibited extension of credit under Section 406
of ERISA and Section 4975 of the Code unless an exemption is applicable. There
are at least three prohibited transaction class exemptions issued by the DOL
that might apply, depending in part on who decided to acquire the Certificates
for the Plan: DOL Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); and PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts).
Moreover, whether the Certificates are debt or equity for ERISA purposes, a
possible violation of the prohibited transaction rules could occur if the
Certificates were purchased during the offering with assets of a Plan if Green
Tree, the Trustee, any Underwriter or any of their affiliates were a fiduciary
with respect to such Plan. Under ERISA and the Code, a person is a "fiduciary"
with respect to a Plan to the extent that such person (i) exercises any
discretionary authority or discretionary control respecting management of such
Plan or exercises any authority or control respecting management or disposition
of its assets, (ii) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any moneys or other property of such Plan,
or has any authority or responsibility to do so, or (iii) has any discretionary
authority or discretionary responsibility in the administration of such Plan.
Accordingly, the fiduciaries of any Plan should not purchase the Certificates
during the offering with assets of any Plan if Green Tree, the Trustee, the
Underwriters or any of their affiliates is a fiduciary with respect to the
Plan.
In light of the foregoing, fiduciaries of Plans, including insurance
companies (whether investing assets for their general or separate accounts),
considering the purchase of the Certificates should consult their own tax or
other appropriate counsel regarding the application of ERISA and the Code to
their purchase of the Certificates.
LEGAL INVESTMENT CONSIDERATIONS
No representations or warranties are made concerning whether the Certificates
are legal investments under any federal or state law, regulation, rule or order
of any court. The Certificates do not constitute "mortgage related securities"
within the meaning of the Secondary Mortgage Market Enhancement Act of 1984, as
amended, which may adversely affect their liquidity.
Prospective investors should consider the applicability of statutes, rules,
regulations, orders, guidelines or agreements generally governing investments
made by a particular investor including, but not limited to, "prudent investor"
provisions and percentage-of-assets limits. Investors should consult their own
legal advisors in determining whether and to what extent the Certificates
constitute legal investment for such investors.
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<PAGE>
UNDERWRITING
The Underwriters named below have severally agreed, subject to the terms and
conditions of the Underwriting Agreement, to purchase from the Trust the
respective principal amounts of the Certificates set forth opposite their names
below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER CERTIFICATES
----------- ------------
<S> <C>
Lehman Brothers Inc. .........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
-----
Total................................................. $
=====
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Certificates
offered hereby if any Certificates are purchased. In the event of default by an
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the Underwriting Agreement may be terminated.
The Underwriters propose to offer the Certificates in part directly to
purchasers at the initial public offering price set forth on the cover page of
this Prospectus and in part to certain securities dealers at such prices less
concessions not to exceed % of the original principal balance of the
Certificates. The Underwriters may allow, and such dealers may reallow,
concessions not to exceed % of the original principal balance of the
Certificates to certain brokers and dealers. After the Certificates are
released for sale to the public, the offering price and other selling terms may
be varied by the Underwriters.
The Underwriting Agreement provides that Green Tree will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or contribute to payments the Underwriters may be
required to make in respect thereof.
LEGAL MATTERS
Certain legal matters relating to the Certificates will be passed upon for
the Trust by Dorsey & Whitney, Minneapolis, Minnesota, and for the Underwriters
by Brown & Wood, New York, New York. The material federal income tax
consequences of the Certificates will be passed upon for the Trust by Dorsey &
Whitney.
46
<PAGE>
APPENDIX I
47
<PAGE>
I. THE CONTRACTS
Set forth below is a description of certain additional characteristics of the
Contracts as of January 1, 1994 (the "Cut-off Date").
GEOGRAPHICAL DISTRIBUTION
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS % OF ALL AGGREGATE % OF ALL CONTRACTS BY
AS OF CONTRACTS BY NUMBER PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
CUT- OFF OF CONTRACTS AS OUTSTANDING AS OF BALANCE AS OF
DATE OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
--------- ------------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Alabama................. 15,944 5.00% $ 277,144,358.98 4.49%
Alaska.................. 50 0.02 772,074.11 0.01
Arizona................. 6,169 1.93 129,974,359.11 2.11
Arkansas................ 9,408 2.95 160,928,380.89 2.61
California.............. 10,103 3.17 247,147,119.70 4.01
Colorado................ 4,946 1.55 103,643,320.85 1.68
Connecticut............. 93 0.03 1,670,078.91 0.03
Delaware................ 1,021 0.32 19,858,670.51 0.32
District of Columbia.... 38 0.01 736,456.78 0.01
Florida................. 19,678 6.17 367,944,672.64 5.97
Georgia................. 18,477 5.79 334,767,344.52 5.43
Hawaii.................. 35 0.01 562,631.12 0.01
Idaho................... 1,488 0.47 33,992,590.65 0.55
Illinois................ 5,442 1.71 97,379,494.66 1.58
Indiana................. 6,256 1.96 103,036,138.42 1.67
Iowa.................... 4,856 1.52 94,230,821.65 1.53
Kansas.................. 4,515 1.42 89,416,914.13 1.45
Kentucky................ 7,845 2.46 137,067,355.32 2.22
Louisiana............... 7,473 2.34 126,556,366.29 2.05
Maine................... 2,261 0.71 46,295,976.01 0.75
Maryland................ 2,545 0.80 49,427,469.96 0.80
Massachusetts........... 147 0.05 2,854,602.29 0.05
Michigan................ 14,433 4.53 295,474,162.63 4.79
Minnesota............... 6,090 1.91 112,703,481.28 1.83
Mississippi............. 8,796 2.76 138,655,790.79 2.25
Missouri................ 9,767 3.06 170,229,513.03 2.76
Montana................. 2,442 0.77 53,636,397.27 0.87
Nebraska................ 1,587 0.50 30,810,424.95 0.50
Nevada.................. 4,576 1.43 113,206,735.88 1.84
New Hampshire........... 445 0.14 8,246,028.46 0.13
New Jersey.............. 254 0.08 5,180,662.87 0.08
New Mexico.............. 9,440 2.96 204,350,875.27 3.31
New York................ 6,641 2.08 133,213,197.32 2.16
North Carolina.......... 24,804 7.78 511,105,063.41 8.29
North Dakota............ 687 0.22 14,576,977.67 0.24
Ohio.................... 6,638 2.08 114,134,377.13 1.85
Oklahoma................ 6,889 2.16 133,154,403.00 2.16
Oregon.................. 3,344 1.05 85,022,465.21 1.38
Pennsylvania............ 5,189 1.63 96,879,945.09 1.57
Rhode Island............ 24 0.01 389,499.88 0.01
South Carolina.......... 15,247 4.78 305,130,658.85 4.95
South Dakota............ 2,004 0.63 42,290,347.90 0.69
Tennessee............... 9,279 2.91 164,676,270.36 2.67
Texas................... 28,416 8.91 553,788,136.08 8.98
Utah.................... 1,006 0.32 19,396,214.70 0.31
Vermont................. 331 0.10 6,266,086.73 0.10
Virginia................ 7,638 2.40 132,466,748.33 2.15
Washington.............. 3,927 1.23 102,530,632.91 1.66
West Virginia........... 4,884 1.53 88,610,508.85 1.44
Wisconsin............... 4,111 1.29 77,614,354.95 1.26
Wyoming................. 1,232 0.39 28,381,146.35 0.46
------- ------ ----------------- ------
Total.................. 318,911 100.00% $6,167,528,304.65 100.00%
======= ====== ================= ======
</TABLE>
48
<PAGE>
CONTRACT TYPE
<TABLE>
<CAPTION>
AGGREGATE % OF ALL CONTRACTS BY WEIGHTED
PRINCIPAL BALANCE OUTSTANDING PRINCIPAL ORIGINAL AVERAGE
OUTSTANDING AS OF BALANCE AS OF ORIGINAL TERM WAM CONTRACT
CUT-OFF DATE CUT-OFF DATE BALANCE (MONTHS) (MONTHS) RATE
----------------- --------------------- ----------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
FHA/VA.................. $1,824,030,837.69 29.57% $2,173,774,909.82 198 151 12.01%
Conventional............ 4,343,497,466.96 70.43 4,835,507,184.28 197 168 11.82
----------------- ------ ----------------- --- --- -----
Total.................. $6,167,528,304.65 100.00% $7,009,282,094.10
================= ====== =================
Weighted Average.................................................................. 197 163 11.88%
=== === =====
</TABLE>
YEAR OF ORIGINATION OF CONTRACTS
<TABLE>
<CAPTION>
% OF ALL
NUMBER OF CONTRACTS BY
CONTRACTS NUMBER OF AGGREGATE % OF ALL CONTRACTS BY
AS OF CONTRACTS PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
CUT-OFF AS OF CUT- OUTSTANDING AS OF BALANCE AS OF
YEAR OF ORIGINATION DATE OFF DATE CUT-OFF DATE CUT-OFF DATE
- ------------------- --------- ------------ ----------------- ---------------------
<S> <C> <C> <C> <C>
Before 1979............. 11 0.00% $ 114,748.73 0.00%
1979.................... 440 0.14 1,109,699.73 0.02
1980.................... 985 0.31 5,246,218.97 0.09
1981.................... 1,189 0.37 8,281,084.43 0.13
1982.................... 2,665 0.84 22,349,306.30 0.36
1983.................... 5,332 1.67 53,851,383.97 0.87
1984.................... 7,309 2.29 82,704,919.92 1.34
1985.................... 12,994 4.07 164,855,014.60 2.67
1986.................... 21,098 6.62 292,358,277.90 4.74
1987.................... 20,835 6.53 300,408,886.85 4.87
1988.................... 20,733 6.50 335,352,208.40 5.44
1989.................... 27,037 8.48 489,990,664.65 7.94
1990.................... 31,557 9.90 596,572,832.44 9.67
1991.................... 36,131 11.33 719,944,929.46 11.67
1992.................... 49,210 15.43 1,073,790,247.96 17.41
1993.................... 81,385 25.52 2,020,597,880.34 32.76
------- ------ ----------------- ------
Total................ 318,911 100.00% $6,167,528,304.65 100.00%
======= ====== ================= ======
</TABLE>
49
<PAGE>
DISTRIBUTION OF ORIGINAL CONTRACT AMOUNTS
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS AGGREGATE % OF ALL CONTRACTS BY
AS OF PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
ORIGINAL CONTRACT CUT-OFF OUTSTANDING AS OF BALANCE AS OF
AMOUNT (IN DOLLARS)(1) DATE CUT-OFF DATE CUT-OFF DATE
- ---------------------- --------- ----------------- ---------------------
<S> <C> <C> <C>
Less than 10,001............. 18,506 $ 110,530,956.98 1.79
10,001- 20,000............... 141,374 1,778,478,710.01 28.84
20,001- 30,000............... 98,924 2,135,024,178.39 34.62
30,001- 40,000............... 43,498 1,388,920,507.76 22.52
40,001- 50,000............... 12,828 538,383,531.02 8.73
50,001- 60,000............... 2,775 147,877,640.87 2.40
60,001- 70,000............... 699 44,384,047.34 0.72
70,001- 80,000............... 217 16,020,353.90 0.26
80,001- 90,000............... 61 5,105,565.28 0.08
90,001-100,000............... 22 2,055,574.31 0.03
100,001-110,000............... 6 629,043.96 0.01
120,001-130,000............... 1 118,194.83 0.00
------- ----------------- ------
Total..................... 318,911 $6,167,528,304.65 100.00
======= ================= ======
</TABLE>
- --------
(1) The largest original Contract amount is $120,056.27.
DISTRIBUTION OF CURRENT CONTRACT AMOUNTS
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS AGGREGATE % OF ALL CONTRACTS BY
AS OF PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
CUT-OFF OUTSTANDING AS OF BALANCE AS OF
CURRENT CONTRACT AMOUNT DATE CUT-OFF DATE CUT- OFF DATE
- ----------------------- --------- ----------------- ---------------------
<S> <C> <C> <C>
Less than 5,001............... 11,177 $ 36,044,440.42 0.58
5,001- 10,000............... 42,671 336,825,851.66 5.46
10,001- 15,000............... 72,875 915,290,134.58 14.84
15,001- 20,000............... 65,695 1,141,461,008.67 18.51
20,001- 25,000............... 46,900 1,047,900,282.29 16.99
25,001- 30,000............... 31,092 849,615,957.11 13.78
30,001- 35,000............... 21,134 683,744,258.13 11.09
35,001- 40,000............... 14,360 536,588,563.49 8.70
40,001- 45,000............... 6,420 271,549,000.40 4.40
45,001- 50,000............... 3,087 145,909,268.64 2.37
50,001- 55,000............... 1,723 90,149,167.13 1.46
55,001- 60,000............... 819 46,980,355.40 0.76
60,001- 65,000............... 455 28,369,669.12 0.46
65,001- 70,000............... 209 14,069,458.13 0.23
70,001- 75,000............... 128 9,257,505.89 0.15
75,001- 80,000............... 78 6,024,429.24 0.10
80,001- 85,000............... 40 3,294,203.20 0.05
85,001- 90,000............... 20 1,741,936.65 0.03
90,001- 95,000............... 15 1,382,468.58 0.02
95,001-100,000............... 7 683,034.77 0.01
100,001-105,000............... 2 206,930.84 0.00
105,001-110,000............... 3 322,185.48 0.01
115,001-120,000............... 1 118,194.83 0.00
------- ----------------- ------
Total..................... 318,911 $6,167,528,304.65 100.00
======= ================= ======
</TABLE>
50
<PAGE>
DISTRIBUTION OF ORIGINAL LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS AGGREGATE % OF ALL CONTRACTS BY
AS OF PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
CUT-OFF OUTSTANDING AS OF BALANCE AS OF
LOAN-TO-VALUE RATIO(1) DATE CUT-OFF DATE CUT-OFF DATE
- ---------------------- --------- ----------------- ---------------------
<S> <C> <C> <C>
Less than 61%................. 11,574 $ 156,954,700.20 2.54%
61%-65%..................... 4,357 71,770,094.17 1.16
66%-70%..................... 6,971 123,743,137.81 2.01
71%-75%..................... 11,963 219,452,545.44 3.56
76%-80%..................... 29,124 550,029,648.26 8.92
81%-85%..................... 41,783 823,737,910.52 13.36
86%-90%..................... 183,845 3,627,783,065.53 58.82
91%-95%..................... 24,327 539,145,870.95 8.74
Over 95%.................... 4,967 54,911,331.77 0.89
------- ----------------- ------
Total..................... 318,911 $6,167,528,304.65 100.00%
======= ================= ======
</TABLE>
- --------
(1) Rounded to the nearest 1%. The loan-to-value ratios on the Contracts may be
subject to a variance of up to 5% from the tabular presentation. Such
variances were caused by information input by Green Tree personnel in
regional offices with respect to incidental items financed in the loans,
such as dealer-installed equipment, the costs of which were estimated at
the time the loan applications were approved.
51
<PAGE>
REMAINING MONTHS TO MATURITY
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS % OF ALL CONTRACTS BY
AS OF AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
MONTHS REMAINING CUT-OFF BALANCE OUTSTANDING BALANCE AS OF
AS OF CUT-OFF DATE DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ------------------ --------- ------------------- ---------------------
<S> <C> <C> <C>
0- 12..................... 2,422 $ 3,636,665.99 0.06%
13- 24..................... 4,137 15,235,359.52 0.25
25- 36..................... 6,517 37,094,300.99 0.60
37- 48..................... 10,103 75,935,395.00 1.23
49- 60..................... 13,238 121,309,693.58 1.97
61- 72..................... 14,091 153,277,473.94 2.49
73- 84..................... 25,079 342,608,047.75 5.56
85- 96..................... 23,959 342,557,857.96 5.55
97-108..................... 21,416 329,666,710.77 5.35
109-120..................... 21,675 359,316,905.14 5.83
121-132..................... 17,120 305,716,145.48 4.96
133-144..................... 17,727 324,286,013.88 5.26
145-156..................... 16,213 317,721,851.94 5.15
157-168..................... 21,039 434,645,705.67 7.05
169-180..................... 28,613 640,749,154.76 10.39
181-192..................... 6,689 185,872,669.86 3.01
193-204..................... 9,417 261,920,857.08 4.25
205-216..................... 10,713 304,356,155.65 4.93
217-228..................... 15,716 471,441,019.16 7.64
229-240..................... 28,112 914,783,731.30 14.83
241-252..................... 6 196,595.73 0.00
253-264..................... 4 177,145.11 0.00
265-276..................... 13 528,510.17 0.01
277-288..................... 1,170 47,348,689.19 0.77
289-300..................... 3,722 177,145,649.03 2.87
------- ----------------- ------
Total................... 318,911 $6,167,528,304.65 100.00%
======= ================= ======
</TABLE>
SEASONING
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS % OF ALL CONTRACTS BY
AS OF AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
MONTHS SINCE CUT-OFF BALANCE OUTSTANDING BALANCE AS OF
ORIGINATION DATE AS OF CUT-OFF DATE CUT-OFF DATE
------------ --------- ------------------- ---------------------
<S> <C> <C> <C>
1- 12................... 86,377 $2,131,064,877.41 34.55%
13- 24................... 49,107 1,066,421,788.32 17.29
25- 36................... 35,250 696,233,452.24 11.29
37- 48................... 30,658 575,644,800.49 9.33
49- 60................... 25,985 466,801,131.89 7.57
61- 72................... 20,255 324,870,074.80 5.27
73- 84................... 20,819 299,165,331.16 4.85
85- 96................... 20,708 284,623,135.21 4.61
97-108................... 12,458 156,674,606.04 2.54
109-120................... 7,034 78,804,887.42 1.28
121-132................... 5,402 54,035,368.25 0.88
133-144................... 2,378 19,456,667.51 0.32
Over 144.................. 2,480 13,732,183.91 0.22
------- ----------------- ------
Total................. 318,911 $6,167,528,304.65 100.00%
======= ================= ======
</TABLE>
52
<PAGE>
ORIGINAL TERM
<TABLE>
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
ORIGINAL TERM AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
13- 24.................... 23 $ 61,294.49 0.00%
25- 36.................... 154 703,304.45 0.01
37- 48.................... 536 2,899,869.62 0.05
49- 60.................... 3,378 21,707,676.80 0.35
61- 72.................... 1,921 13,808,632.99 0.22
73- 84.................... 15,737 185,855,373.80 3.01
85- 96.................... 6,321 52,628,506.01 0.85
97-108.................... 1,632 16,708,580.57 0.27
109-120.................... 28,872 340,321,596.28 5.52
121-132.................... 1,001 13,787,563.76 0.22
133-144.................... 23,935 312,731,884.19 5.07
145-156.................... 998 17,291,761.87 0.28
157-168.................... 572 10,728,162.52 0.17
169-180.................... 151,553 2,641,714,170.36 42.83
181-192.................... 280 6,873,556.26 0.11
193-204.................... 301 8,722,352.45 0.14
205-216.................... 611 17,861,280.46 0.29
217-228.................... 198 5,968,607.69 0.10
229-240.................... 75,960 2,271,193,475.05 36.83
241-252.................... 2 55,548.83 0.00
253-264.................... 2 48,777.82 0.00
265-288.................... 5 180,133.73 0.00
289-300.................... 4,919 225,676,194.65 3.66
------- ----------------- ------
Total.................. 318,911 $6,167,528,304.65 100.00%
======= ================= ======
ADDITIONAL COLLATERAL CHARACTERISTICS
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
WIDTH OF MANUFACTURED HOMES AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- --------------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Single Wide................ 191,771 $2,771,535,167.60 44.94%
Multi Wide................. 127,140 3,395,993,137.05 55.06
------- ----------------- ------
Total.................. 318,911 $6,167,528,304.65 100.00%
======= ================= ======
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
LOCATION OF PROPERTY AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- -------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Park....................... 128,143 $2,216,736,689.99 35.94%
Private.................... 190,768 3,950,791,614.66 64.06
------- ----------------- ------
Total.................. 318,911 $6,167,528,304.65 100.00%
======= ================= ======
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
NEW/USED UNITS AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- -------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
New........................ 241,761 $5,104,085,151.09 82.76%
Used....................... 77,150 1,063,443,153.56 17.24
------- ----------------- ------
Total.................. 318,911 $6,167,528,304.65 100.00%
======= ================= ======
</TABLE>
53
<PAGE>
CONTRACT RATE
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS % OF CONTRACT POOL
RANGE OF AS OF AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
CONTRACTS BY CUT-OFF BALANCE OUTSTANDING BALANCE AS OF
CONTRACT RATE DATE AS OF CUT-OFF DATE CUT-OFF DATE
------------- --------- ------------------- ---------------------
<S> <C> <C> <C>
Less than 8.00%............. 1,509 $ 39,394,845.96 0.64%
8.01%-8.25%................. 4,764 103,060,825.24 1.67
8.26%-8.50%................. 1,374 38,093,103.72 0.62
8.51%-8.75%................. 172 6,295,927.96 0.10
8.76%-9.00%................. 2,809 109,648,001.70 1.78
9.01%-9.25%................. 1,139 44,721,179.74 0.73
9.26%-9.50%................. 8,609 257,033,170.25 4.17
9.51%-9.75%................. 6,468 192,075,449.97 3.11
9.76%-10.00%................ 6,052 161,976,890.20 2.63
10.01%-10.25%............... 13,482 396,195,672.47 6.42
10.26%-10.50%............... 8,092 216,545,569.26 3.51
10.51%-10.75%............... 20,413 445,416,327.34 7.22
10.76%-11.00%............... 11,539 261,496,858.05 4.24
11.01%-11.25%............... 9,495 193,966,696.80 3.14
11.26%-11.50%............... 18,698 351,918,350.98 5.71
11.51%-11.75%............... 10,365 209,927,515.11 3.40
11.76%-12.00%............... 16,047 293,627,281.88 4.76
12.01%-12.25%............... 20,619 416,908,654.50 6.76
12.26%-12.50%............... 17,520 313,262,276.74 5.08
12.51%-12.75%............... 17,633 323,756,607.34 5.25
12.76%-13.00%............... 14,910 269,033,597.10 4.36
13.01%-13.25%............... 8,412 137,386,067.01 2.23
13.26%-13.50%............... 20,254 337,544,764.95 5.47
13.51%-13.75%............... 10,368 174,886,240.29 2.84
13.76%-14.00%............... 18,530 287,656,956.65 4.66
14.01%-14.25%............... 9,228 135,092,094.35 2.19
14.26%-14.50%............... 13,504 162,664,267.72 2.64
14.51%-14.75%............... 5,490 66,211,617.18 1.07
14.76%-15.00%............... 8,980 97,567,820.80 1.58
15.01%-15.25%............... 1,923 20,475,677.05 0.33
15.26%-15.50%............... 4,370 48,129,586.27 0.78
15.51%-15.75%............... 255 2,563,634.12 0.04
15.76%-16.00%............... 2,464 24,781,174.05 0.40
16.01%-16.25%............... 240 3,146,787.31 0.05
16.26%-16.50%............... 899 8,163,912.88 0.13
16.51%-16.75%............... 94 805,251.21 0.01
16.76%-17.00%............... 565 4,041,771.95 0.07
17.01%-17.25%............... 6 34,984.35 0.00
17.26%-17.50%............... 408 3,155,526.18 0.05
17.51%-17.75%............... 7 66,984.93 0.00
17.76%-18.00%............... 770 5,635,772.23 0.09
Over 18.00%................. 435 3,162,610.86 0.05
------- ----------------- ------
Total................... 318,911 $6,167,528,304.65 100.00%
======= ================= ======
</TABLE>
54
<PAGE>
II. THE SECURITIZED POOLS
SECURITIZED POOLS
TRANSACTION CHARACTERISTICS
<TABLE>
<CAPTION>
LIMITED/
GUARANTEE UNLIMITED CREDIT ACCELERATED GUARANTEE SERVICING
TRANSACTION TYPE(1) RECOURSE SUPPORT (2) PRINCIPAL FEE FEE RANK(3)
- ----------- --------- --------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
GTFC 1993-4.. N -- R N N 2
GTFC 1993-3.. S U N N Y 2
GTFC 1993-2.. S U N N Y 2
GTFC 1993-1.. S U N N Y 2
GTFC 1992-2.. S U N N Y 2
GTFC 1992-1.. S U N Y Y 2
MLMI 1992D... N -- R Y N 2
MLMI 1992B... N -- R Y N 2
MLMI 1991I... N -- R Y N 2
MLMI 1991G... N -- R Y N 2
MLMI 1991D... S L FSA N N 2
MLMI 1991B... N -- R Y N 2
MLMI 1990I... N -- R Y N 2
MLMI 1990G... S U R N Y 2
MLMI 1990D... S L O N Y 2
MLMI 1990B... S L O N Y 1
MLMI 1989H... S U FSA N Y 3
MLMI 1989F... S U FSA N Y 1
MLMI 1989D... S U N N N 1
MLMI 1989B... S U N N N 1
MLMI 1988X... S U N N N 1
MLMI 1988Q... S U N N N 1
MLMI 1988H... N -- -- N N 1
MLMI 1988E... D L FSA N Y 3
MLMI 1987C... D L FSA N Y 3
MLMI 1987B... D L FSA N Y 3
MaHCS 1987-B. D L FSA N Y 3
MaHCS 1987-A. D L FSA N Y 3
</TABLE>
- --------
(1) D = Contracts repurchased at default; S = obligation to cover investor
shortfalls; N = no guarantee
(2) O = outside reserve fund (not part of the Residual Asset); R = inside
reserve fund (part of the Residual Asset); N = no support; FSA = financial
guaranty insurance policy issued by FSA
(3) 1 = servicing fee always paid first; 2 = servicing fee paid last if Green
Tree is servicer; 3 = servicing fee always paid last
55
<PAGE>
TOTAL SECURITIZED CONVENTIONAL AND GNMA POOL INFORMATION(1)
<TABLE>
<CAPTION>
ORIGINAL WEIGHTED AVERAGE WEIGHTED AVERAGE
POOL PRINCIPAL TOTAL CERTIFICATE WAM WAM WAC INVESTOR RATE INTEREST MARGIN
TRANSACTION BALANCE BALANCE (MONTHS) (MONTHS) (%) (%) (%)(2)
- ------------------ -------------- ----------------- -------- -------- ----- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
GTFC 1993-4....... $ 720,973,959 $ 720,973,959 203 202 9.73% 6.07 3.66
GTFC 1993-3....... 648,127,948 648,127,948 203 199 10.23 5.61 4.62
GTFC 1993-2....... 432,952,311 432,952,311 204 197 10.65 5.86 4.79
GTFC 1993-1....... 233,917,273 233,917,273 208 197 11.35 6.33 5.02
GTFC 1992-2....... 263,253,660 263,253,660 203 188 11.26 7.36 3.90
GTFC 1992-1....... 223,816,577 223,816,577 199 183 11.88 6.58 5.29
MLMI 1992D........ 187,236,472 179,004,580 193 172 12.20 7.51 4.70
MLMI 1992B........ 473,510,261 441,550,953 183 107 13.44 7.68 5.76
MLMI 1991I........ 121,412,618 113,810,573 187 155 13.05 7.80 5.26
MLMI 1991G........ 119,140,631 111,611,798 189 155 13.50 8.36 5.14
MLMI 1991D........ 92,060,968 92,060,968 183 136 14.20 9.22 4.98
MLMI 1991B........ 64,866,724 59,282,814 187 139 14.12 9.45 4.67
MLMI 1990I........ 72,288,791 63,707,249 186 148 14.05 9.37 4.68
MLMI 1990G........ 81,658,055 81,658,055 188 147 14.19 10.08 4.11
MLMI 1990D........ 68,465,325 68,465,325 182 139 14.22 10.01 4.21
MLMI 1990B........ 47,297,224 47,297,224 188 142 13.96 10.15 3.82
MLMI 1989H........ 69,486,801 69,486,801 189 140 13.71 9.49 4.22
MLMI 1989F........ 79,969,150 79,969,150 187 131 13.91 9.75 4.16
MLMI 1989D........ 58,415,195 58,415,195 186 131 14.37 10.47 3.90
MLMI 1989B........ 28,408,287 28,408,287 182 124 14.12 10.80 3.32
MLMI 1988X........ 48,976,620 48,976,620 184 122 13.72 10.25 3.47
MLMI 1988Q........ 61,978,163 61,978,163 186 122 13.61 9.80 3.81
MLMI 1988H........ 39,615,510 39,615,510 184 117 12.97 9.70 3.27
MLMI 1988E........ 43,398,005 43,398,005 180 103 13.51 9.55 3.96
MLMI 1987C........ 41,750,161 41,750,161 186 111 13.67 10.10 3.57
MLMI 1987B........ 25,742,132 25,742,132 193 95 14.52 10.20 4.32
MaHCS 1987-B...... 51,692,915 51,692,915 181 90 13.92 9.55 4.37
MaHCS 1987-A...... 18,233,098 18,233,098 181 99 12.65 8.55 4.10
GNMA 1993......... 220,011,048 220,011,048 208 201 9.76 6.81 2.95
GNMA 1992......... 235,990,153 235,990,153 205 187 10.86 7.91 2.95
GNMA 1991......... 380,291,336 380,291,336 204 174 12.28 9.33 2.95
GNMA 1990......... 274,014,369 274,014,369 207 166 12.87 9.93 2.95
GNMA 1989......... 185,431,694 185,431,694 200 147 12.76 9.82 2.94
GNMA 1988......... 107,223,465 107,223,465 184 119 12.49 9.57 2.92
GNMA 1987......... 119,020,205 119,020,205 180 101 11.42 8.52 2.91
GNMA 1986......... 104,091,589 104,091,589 178 89 12.11 9.22 2.89
GNMA Pre-1986..... 122,809,613 122,809,613 180 61 14.71 11.87 2.83
-------------- --------------
Total........... $6,167,528,305 $6,098,040,775
============== ==============
Weighted Aver-
age............ 197 164 11.88% 7.79% 4.09%
=== === ===== ===== ====
<CAPTION>
TRANSACTION RESERVE FUND BALANCE
- ------------------ --------------------
<S> <C>
GTFC 1993-4....... $ 120,878
GTFC 1993-3....... --
GTFC 1993-2....... --
GTFC 1993-1....... --
GTFC 1992-2....... --
GTFC 1992-1....... --
MLMI 1992D........ 10,373,209
MLMI 1992B........ 17,694,007
MLMI 1991I........ 5,224,211
MLMI 1991G........ 8,207,013
MLMI 1991D........ --
MLMI 1991B........ 6,180,994
MLMI 1990I........ 7,034,817
MLMI 1990G........ 13,677,200
MLMI 1990D........ --
MLMI 1990B........ --
MLMI 1989H........ --
MLMI 1989F........ --
MLMI 1989D........ --
MLMI 1989B........ --
MLMI 1988X........ --
MLMI 1988Q........ --
MLMI 1988H........ --
MLMI 1988E........ --
MLMI 1987C........ --
MLMI 1987B........ --
MaHCS 1987-B...... --
MaHCS 1987-A...... --
GNMA 1993......... --
GNMA 1992......... --
GNMA 1991......... --
GNMA 1990......... --
GNMA 1989......... --
GNMA 1988......... --
GNMA 1987......... --
GNMA 1986......... --
GNMA Pre-1986..... --
--------------------
Total........... $68,512,329
====================
Weighted Aver-
age............
</TABLE>
(1) As of the Cut-off Date.
(2) Before servicing fees, losses and expenses.
56
<PAGE>
PREPAYMENT PROJECTIONS COMPARISON
<TABLE>
<CAPTION>
LOAN-BY-LOAN SINGLE LINE COLLATERAL POOL
PREPAY PROJECTIONS (CPR%)(1) PREPAY PROJECTIONS (CPR%)(2)
------------------------------------- -------------------------------------
TRANSACTION 1 MO. 6 MO. 12 MO. 60 MO. 1 MO. 6 MO. 12 MO. 60 MO.
----------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GTFC 1993-4............. 1.3% 2.3% 2.8% 4.1% 2.2% 3.2% 3.8% 5.4%
GTFC 1993-3............. 2.5 3.3 3.5 4.4 3.5 4.2 4.5 5.8
GTFC 1993-2............. 4.5 4.2 4.3 4.9 5.3 5.0 5.2 6.1
GTFC 1993-1............. 6.4 5.5 5.5 5.7 7.1 6.2 6.2 6.7
GTFC 1992-2............. 6.4 5.8 5.8 5.7 7.3 6.6 6.7 6.9
GTFC 1992-1............. 8.4 7.7 7.7 7.1 9.2 8.5 8.5 8.2
MLMI 1992D.............. 9.2 8.9 8.9 8.0 10.0 9.8 9.8 9.2
MLMI 1992B.............. 10.4 10.7 10.5 9.3 13.1 13.6 13.5 13.2
MLMI 1991I.............. 14.1 13.8 13.4 11.2 15.1 14.9 14.6 12.8
MLMI 1991G.............. 15.5 15.1 14.5 11.9 16.5 16.1 15.6 13.4
MLMI 1991D.............. 15.0 14.8 14.3 11.9 16.7 16.6 16.2 14.5
MLMI 1991B.............. 15.1 14.9 14.4 12.0 16.8 16.7 16.3 14.3
MLMI 1990I.............. 15.8 15.7 15.0 12.4 17.1 17.1 16.5 14.2
MLMI 1990G.............. 16.4 16.2 15.6 12.9 17.7 17.6 17.0 14.7
MLMI 1990D.............. 17.9 17.2 16.4 13.5 19.5 18.8 18.2 15.5
MLMI 1990B.............. 17.9 17.0 16.3 13.4 19.4 18.6 18.0 15.3
MLMI 1989H.............. 16.1 15.4 14.9 12.6 17.6 17.0 16.5 14.4
MLMI 1989F.............. 16.0 15.5 15.0 12.8 17.6 17.2 16.8 14.8
MLMI 1989D.............. 16.8 16.3 15.7 13.1 18.6 18.1 17.6 15.1
MLMI 1989B.............. 17.1 16.5 15.9 13.1 19.0 18.4 17.9 15.4
MLMI 1988X.............. 13.3 13.3 12.9 11.3 15.4 15.5 15.2 13.6
MLMI 1988Q.............. 13.0 13.0 12.7 11.1 14.8 14.9 14.6 13.0
MLMI 1988H.............. 11.3 11.4 11.2 10.0 13.2 13.4 13.3 11.9
MLMI 1988E.............. 10.7 11.0 10.8 9.7 12.9 13.3 13.1 11.8
MLMI 1987C.............. 12.0 12.2 11.9 10.4 14.6 14.9 14.3 12.1
MLMI 1987B.............. 9.4 10.1 9.8 8.9 10.7 11.4 11.3 11.1
MaHCS 1987-B............ 10.2 10.6 10.4 9.4 11.9 12.4 12.3 11.3
MaHCS 1987-A............ 9.1 9.6 9.3 8.7 10.5 11.0 10.9 10.4
GNMA 1993............... 2.4 3.0 3.3 4.5 2.7 3.3 3.6 4.9
GNMA 1992............... 5.7 5.6 5.7 6.0 6.1 6.1 6.2 6.6
GNMA 1991............... 10.0 9.7 9.5 8.8 10.4 10.2 10.0 9.6
GNMA 1990............... 11.8 11.6 11.2 10.5 12.2 12.0 11.7 11.2
GNMA 1989............... 10.9 10.8 10.5 9.9 11.4 11.3 11.1 10.8
GNMA 1988............... 9.6 9.9 9.6 9.2 10.1 10.4 10.3 10.2
GNMA 1987............... 7.2 7.8 7.8 7.9 7.6 8.2 8.2 8.5
GNMA 1986............... 8.2 8.8 8.6 8.5 8.5 9.2 9.1 8.5
GNMA Pre-1986........... 10.8 11.9 11.7 10.8 13.4 14.7 14.7 N/A
<CAPTION>
SINGLE LINE COLLATERAL POOL
PREPAY PROJECTIONS (MHP%)(3)
-------------------------------------
TRANSACTION 1 MO. 6 MO. 12 MO. 60 MO.
----------- -------- -------- --------- ---------
<S> <C> <C> <C> <C>
GTFC 1993-4............. 57.0% 79.6% 86.4% 96.7%
GTFC 1993-3............. 84.5 97.1 96.6 102.1
GTFC 1993-2............. 120.9 108.5 104.4 105.7
GTFC 1993-1............. 145.1 119.5 113.6 114.2
GTFC 1992-2............. 139.5 121.5 117.1 116.1
GTFC 1992-1............. 172.6 152.7 147.2 138.2
MLMI 1992D.............. 172.4 164.3 163.7 153.8
MLMI 1992B.............. 218.9 227.1 225.8 220.4
MLMI 1991I.............. 252.5 248.7 242.7 212.9
MLMI 1991G.............. 274.8 268.8 260.1 222.9
MLMI 1991D.............. 278.7 276.8 269.5 241.5
MLMI 1991B.............. 280.5 278.5 271.0 239.1
MLMI 1990I.............. 285.5 284.4 275.3 236.8
MLMI 1990G.............. 294.7 293.1 283.7 244.3
MLMI 1990D.............. 324.7 313.6 303.4 258.2
MLMI 1990B.............. 323.4 309.4 299.9 255.7
MLMI 1989H.............. 292.9 283.1 275.5 239.5
MLMI 1989F.............. 293.5 287.1 279.8 247.2
MLMI 1989D.............. 309.4 301.7 292.8 252.1
MLMI 1989B.............. 317.1 306.9 298.6 257.0
MLMI 1988X.............. 256.9 258.4 254.1 227.1
MLMI 1988Q.............. 245.9 247.9 243.4 216.4
MLMI 1988H.............. 219.9 223.5 221.0 198.7
MLMI 1988E.............. 214.3 221.3 218.6 196.8
MLMI 1987C.............. 244.1 247.8 237.5 201.4
MLMI 1987B.............. 177.8 190.8 188.5 185.7
MaHCS 1987-B............ 198.1 207.1 205.7 188.8
MaHCS 1987-A............ 174.8 183.4 182.0 172.7
GNMA 1993............... 61.4 69.9 71.8 84.2
GNMA 1992............... 111.2 105.5 105.0 110.7
GNMA 1991............... 173.5 169.8 166.0 159.4
GNMA 1990............... 203.9 200.8 195.3 187.4
GNMA 1989............... 189.2 187.9 184.5 180.4
GNMA 1988............... 168.6 174.0 170.9 169.4
GNMA 1987............... 125.9 137.5 136.6 141.6
GNMA 1986............... 141.9 153.6 150.9 142.1
GNMA Pre-1986........... 223.5 245.3 244.8 N/A
</TABLE>
- ----
(1) The CPRs have been calculated and stated on a loan-by-loan basis, for each
pool, taking into account the actual WAC and amortization schedule for
each loan in the pool.
(2) The CPRs have been calculated assuming that each transaction pool consists
of a single loan with characteristics equal to the weighted average WAM
and WAC of the pool. The CPRs are calculated using the WAC and schedule
amortization of such single loan, not the actual WAC and schedule
amortization for each loan in the pool.
(3) Prepayments on the Contracts may be measured by a prepayment standard or
model. The Manufactured Housing Prepayment Model ("MHP") is based on an
assumed rate of prepayments each month of the then unpaid principal
balance of a pool of new Contracts. A prepayment assumption of 100% MHP
assumes constant prepayment rates of 3.7% per annum of the then unpaid
principal balance of such Contracts in the first month of the life of the
Contracts and an additional 0.1% per annum in each month thereafter until
the 24th month. Beginning in the 24th month and in each month thereafter
during the life of the Contracts, 100% MHP assumes a constant prepayment
rate of 6.0% per annum each month.
57
<PAGE>
GTFC 1993-4
Issue Date: December 1993.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ------------ -------
<S> <C> <C>
Class A-1; Senior $235,705,013 4.85%
Class A-2; Senior $110,000,000 5.85%
Class A-3; Senior $ 75,000,000 6.25%
Class A-4; Senior $111,699,000 6.60%
Class A-5; Senior $108,790,362 7.05%
Class B-1; Subordinate $ 50,768,000 7.20%
Class B-2; Subordinate $ 29,011,584 8.55%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates, and the Class B-1 Certificates
are supported by the subordination of the Class B-2
Certificates. The Class B-2 Certificateholders are entitled
to a Liquidity Reserve (up to $3,626,345). To the extent
that funds in the Certificate Account are insufficient to
distribute the Class B-2 Formula Distribution Amount, a
Reserve Draw Amount will be withdrawn from the Liquidity
Reserve.
Nature of Net Excess Cashflow:
Class C Certificate (Residual).
Triggers: None.
58
<PAGE>
GRAPH--$
59
<PAGE>
GTFC 1993-3
Issue Date: September 1993.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
-------------- ------------ -------
<S> <C> <C>
Class A-1; Senior $128,776,622 4.60%
Class A-2; Senior $ 68,578,000 4.90%
Class A-3; Senior $ 71,525,000 5.20%
Class A-4; Senior $ 63,956,000 5.45%
Class A-5; Senior $ 88,420,000 5.75%
Class A-6; Senior $ 27,866,000 6.10%
Class A-7; Senior $119,404,000 6.40%
Class B; Subordinate $ 79,602,326 6.85%
</TABLE>
REMIC/Grantor Trust: REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. The Guarantee
Payment is equal to any shortfall in the Class B
Distribution Amount.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
Triggers: None.
60
<PAGE>
GRAPH--$
61
<PAGE>
GTFC 1993-2
Issue Date: June 1993.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
- -------------- ------------ -------
<S> <C> <C>
Class A-1; Senior $128,489,772 3.625%
Class A-2; Senior $108,780,000 6.10%
Class A-3; Senior $ 50,860,000 6.55%
Class A-4; Senior $ 79,485,000 6.90%
Class B; Subordinate $ 65,337,539 8.00%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. The Guarantee
Payment is equal to any Class B Principal Liquidation Loss
Amount and any shortfall in the Class B Distribution Amount.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of the Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
Triggers: None.
62
<PAGE>
GRAPH--$
63
<PAGE>
GTFC 1993-1
Issue Date: March 1993.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A-1; Senior $64,516,635 4.90%
Class A-2; Senior $64,000,000 6.10%
Class A-3; Senior $75,352,561 6.90%
Class B; Subordinate $30,048,077 8.45%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. The Guarantee
Payment is equal to any Class B Principal Liquidation Loss
Amount and any shortfall in the Class B Distribution Amount.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of the Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
Triggers: None.
64
<PAGE>
GRAPH--$
65
<PAGE>
GTFC 1992-2
Issue Date: December 1992.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A-1; Senior $70,930,185 5.85%
Class A-2; Senior $69,000,000 7.05%
Class A-3; Senior $28,176,728 7.50%
Class A-4; Mezzanine $46,131,756 8.15%
Class B; Subordinate $49,014,991 9.15%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. The Guarantee
Payment is equal to any Class B Principal Liquidation Loss
Amount and any shortfall in the Class B Distribution Amount.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of the Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
Triggers: None.
66
<PAGE>
GRAPH--$
67
<PAGE>
GTFC 1992-1
Issue Date: September 1992.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Certificates: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A-1; Senior $42,605,194 4.75%
Class A-2; Senior $50,000,000 6.15%
Class A-3; Senior $20,000,000 6.70%
Class A-4; Senior $29,366,359 7.20%
Class A-5; Mezzanine $43,683,556 6.50%
Class B; Subordinate $38,161,467 8.75%
</TABLE>
REMIC/Grantor Trust: REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to Class B Accelerated Principal Distributions
(on and after October 15, 1998) and a Green Tree Guarantee.
The Class B Accelerated Principal Distribution is equal to
all Monthly Excess Cashflow. The Guarantee Payment is equal
to any Class B Principal Liquidation Loss Amount and any
shortfall in the Class B Distribution Amount.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of the Monthly Excess
Cashflow and 400 basis points. The Guarantee Fee is reduced
to zero on and after October 15, 1998, because all Monthly
Excess Cashflow will be paid as Class B Accelerated
Principal Distributions. In addition, the Guarantee Fee
would be reduced to zero prior to October 15, 1998 if a
trigger is activated.
2. Class C Certificate (Residual).
Triggers: Yes.
68
<PAGE>
GRAPH--$
69
<PAGE>
MLMI 1992-D
Issue Date: June 1992.
REMIC/Grantor Trust:REMIC.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A-1; Senior $36,077,381 5.90%
Class A-2; Senior $37,500,000 7.40%
Class A-3; Senior $20,686,341 7.75%
Class A-4; Senior $21,500,000 8.15%
Class A-5; Mezzanine $36,176,164 7.95%
Class B; Subordinate $27,064,694 8.50%
</TABLE>
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificates are
entitled to Class B Accelerated Principal Distributions and
a Reserve Fund. The Class B Accelerated Principal
Distribution is paid out of Monthly Excess Cashflow, up to a
maximum of 250 basis points (subject to certain triggers).
The Reserve Fund was funded from an initial deposit of
$9,927,165 by Green Tree, and is available to pay the
Reserve Draw Amount each month to the Class B
Certificateholders. Investment Income is deposited in the
Reserve Fund. If a Reserve Draw Amount is ever taken from
the Reserve Fund, thereafter the Monthly Excess Cashflow
(after payment of the Class B Accelerated Principal
Distribution) will be deposited in the Reserve Fund until it
equals the Requisite Reserve Amount (equal to the lesser of
the Class B Principal Balance or the amount necessary for
the highest rating on the Class B Certificates). Any amount
in the Reserve Fund in excess of the Class B Principal
Balance is released to the Class C Certificateholders. The
Class C Certificateholders can replace the cash in the
Reserve Fund with a letter of credit. If the amount in the
Reserve Fund equals the Class B Principal Balance (and the
pool balance is less than 10% of the Cut-off Date Pool
Principal Balance), the Trustee is required to use all funds
in the Reserve Fund to repurchase the remaining Contracts
and retire the Class B Certificates. In such event, the
repurchased Contracts would be Class C Certificate property.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
Triggers: Yes.
70
<PAGE>
GRAPH--$
71
<PAGE>
MLMI 1992-B
Issue Date: March 1992.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ------------ -------
<S> <C> <C>
Class A-1; Senior $164,286,104 6.85%
Class A-2; Senior $76,834,811 8.05%
Class A-3; Senior $72,000,000 8.30%
Class A-4; Senior $66,323,213 7.85%
Class B; Subordinate $62,106,825 8.50%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to Class B Accelerated Principal Distributions
and a Reserve Fund. The Class B Accelerated Principal
Distribution is paid out of Monthly Excess Cashflow, up to a
maximum of 300 basis points (subject to certain triggers).
The maximum will be reduced to 250 basis points on April 15,
1994 (subject to certain triggers).
The Reserve Fund was funded from an initial deposit of
$16,797,524 by Green Tree, and is available to pay the
Reserve Draw Amount each month to the Class B
Certificateholders. If a Reserve Draw Amount is ever taken
from the Reserve Fund, thereafter the Monthly Excess
Cashflow (after payment of the Class B Accelerated Principal
Distribution) will be deposited in the Reserve Fund until it
equals the Requisite Reserve Amount (equal to the lesser of
the Class B Principal Balance or the amount necessary for
the highest rating on the Class B Certificates). Any amount
in the Reserve Fund in excess of the Class B Principal
Balance is released to the Class C Certificateholders. The
Class C Certificateholders can replace the cash in the
Reserve Fund with a letter of credit. If the amount in the
Reserve Fund equals the Class B Principal Balance (and the
pool balance is less than 10% of the Cut-off Date Pool
Principal Balance), the Trustee is required to use all funds
in the Reserve Fund to repurchase the remaining Contracts
and retire the Class B Certificates. In such event, the
repurchased Contracts would be Class C property.
Nature of Net Excess Cashflow:
1. Class C Distribution Amount.
Triggers: Yes.
72
<PAGE>
GRAPH--$
73
<PAGE>
MLMI 1991-I
Issue Date: December 1991.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $95,272,541 7.65%
Class B; Subordinate $18,538,032 8.55%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to Class B Accelerated Principal Distributions
and a Reserve Fund. The Class B Accelerated Principal
Distribution is paid out of Monthly Excess Cashflow, up to a
maximum of 250 basis points (subject to certain triggers).
The Reserve Fund was funded from an initial deposit of
$4,901,264 by Green Tree, and is available to pay the
Reserve Draw Amount each month to the Class B
Certificateholders. Investment Income on funds in the
Reserve Fund will be added to the Reserve Fund. Any amount
in the Reserve Fund in excess of the Requisite Reserve
Amount is released to the Class C Certificateholders. The
Class C Certificateholders can replace the cash in the
Reserve Fund with a letter of credit. If the amount in the
Reserve Fund equals the Class B Principal Balance (and the
pool balance is less than 10% of the Cut-off Date Pool
Principal Balance), the Trustee is required to use all funds
in the Reserve Fund to repurchase the remaining Contracts
and retire the Class B Certificates. In such event, the
repurchased Contracts would be Class C property.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
Triggers: Yes.
74
<PAGE>
GRAPH--$
75
<PAGE>
MLMI 1991-G
Issue Date: September 1991.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $88,679,841 8.15%
Class B; Subordinate $22,931,957 9.15%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to Class B Accelerated Principal Distributions
and a Reserve Fund. The Class B Accelerated Principal
Distribution is paid out of Monthly Excess Cashflow, up to a
maximum of 200 basis points (subject to certain triggers).
The Reserve Fund was funded from an initial deposit of
$7,615,197 by Green Tree, and is available to pay the
Reserve Draw Amount each month to the Class B
Certificateholders. Investment Income on funds in the
Reserve Fund will be added to the Reserve Fund. If a Reserve
Draw Amount is ever taken from the Reserve Fund, thereafter
the Monthly Excess Cashflow (after payment of the Class B
Accelerated Principal Distribution) will be deposited in the
Reserve Fund until it equals the Requisite Reserve Amount
(equal to the lesser of the Class B Principal Balance or the
amount necessary for the highest rating on the Class B
Certificates). Any amount in the Reserve Fund in excess of
the Requisite Reserve Amount is released to the Class C
Certificateholders. The Class C Certificateholders can
replace the cash in the Reserve Fund with a letter of
credit. If the amount in the Reserve Fund equals the Class B
Principal Balance (and the pool balance is less than 10% of
the Cut-off Date Pool Principal Balance), the Trustee is
required to use all funds in the Reserve Fund to repurchase
the remaining Contracts and retire the Class B Certificates.
In such event, the repurchased Contracts would be Class C
property.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
Triggers: Yes.
76
<PAGE>
GRAPH--$
77
<PAGE>
MLMI 1991-D
Issue Date: June 1991.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $68,608,665 9.00%
Class B; Subordinate $23,452,303 9.85%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Limited Guarantee, amounts in the
Guarantee Account, and the Policy issued by Financial
Security Assurance Inc. ("FSA").
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to any shortfall on the Class B
Distribution) each month.
If Green Tree fails to make a required Guarantee Payment,
the deficiency (the "Guaranteed Shortfall") will be paid by
MaHCS Guaranty Corporation, a wholly owned subsidiary of
Green Tree ("MaHCS"), unless the Policy Amount has been
reduced to zero. If MaHCS fails to pay the Guaranteed
Shortfall, the Trustee will submit a claim under the Policy
for such deficiency. FSA can order the Trustee to make a
claim under the Policy in excess of the Guaranteed
Shortfall, in which case the proceeds are deposited in the
Reserve Fund, which is not an asset of the Trust. If that
happens, the Trustee will thereafter withdraw funds from the
Reserve Fund before making a claim on the Policy.
The Policy Amount on any Remittance Date is the greater of
(i) the Class B Principal Balance minus all Net Liquidation
Losses reported since February 1, 1992, and (ii) the
Hypothetical Reserve Fund Balance for that Remittance Date.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
Triggers: None.
78
<PAGE>
GRAPH--$
79
<PAGE>
MLMI 1991-B
Issue Date: March 1991.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $45,268,670 9.20%
Class B; Subordinate $14,014,144 10.25%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to Class B Accelerated Principal Distributions
and a Reserve Fund. There is no Green Tree Guarantee. The
Class B Accelerated Principal Distribution is paid out of
Monthly Excess Cashflow and Investment Income off the
Reserve Fund, up to a maximum of 200 basis points (subject
to certain triggers).
The Reserve Fund was funded from an initial deposit of
$6,188,859 by Green Tree, and is available to pay the
Reserve Draw Amount each month to the Class B holders. If a
Reserve Draw Amount is ever taken from the Reserve Fund,
thereafter the Monthly Excess Cashflow and Investment Income
(after payment of the Class B Accelerated Principal
Distribution) will be deposited in the Reserve Fund until
the amount therein equals the Requisite Reserve Amount
(equal to the lesser of the Initial Deposit or the Class B
Principal Balance). Any amount in the Reserve Fund in excess
of the Class B Principal Balance is released to the Class C
Certificateholders. The Class C Certificateholders can
replace the cash in the Reserve Fund with a letter of
credit. If the amount in the Reserve Fund equals the Class B
Principal Balance (and the pool balance is less than 10% of
the Cut-off Date Pool Principal Balance), the Trustee is
required to use all funds in the Reserve Fund to repurchase
the remaining Contracts and retire the Class B Certificates.
In such event, the repurchased Contracts would be Class C
property.
Nature of Net Excess Cashflow:
1.Class C Certificate (Residual).
Triggers: Yes.
80
<PAGE>
GRAPH--$
81
<PAGE>
MLMI 1990-I
Issue Date: December 1990.
<TABLE>
<CAPTION>
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ----------- -------
<S> <C> <C>
Class A; Senior $50,011,871 9.20%
Class B; Subordinate $13,695,378 10.00%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to Class B Accelerated Principal Distributions
and a Reserve Fund. The Class B Accelerated Principal
Distribution is paid out of Monthly Excess Cashflow and
Investment Income off the Reserve Fund, up to a maximum of
200 basis points (subject to certain triggers).
The Reserve Fund was funded from an initial deposit of
$7,034,817 by Green Tree, and is available to pay the
Reserve Draw Amount (equal to any shortfall in the Class B
distribution) each month to the Class B Certificateholders.
There is no Green Tree Guarantee. If a Reserve Draw Amount
is ever taken from the Reserve Fund, thereafter the Monthly
Excess Cashflow and Investment Income (after payment of the
Class B Accelerated Principal Distribution) will be
deposited in the Reserve Fund until it equals the Requisite
Reserve Amount (equal to the lesser of the Initial Deposit
or the Class B Principal Balance). Any amount in the Reserve
Fund in excess of the Class B Principal Balance is released
to the Class C Certificateholders. The Class C
Certificateholders can replace the cash in the Reserve Fund
with a letter of credit.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
Triggers: Yes.
82
<PAGE>
GRAPH--$
83
<PAGE>
MLMI 1990-G
Issue Date: September 1990.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A: Senior $54,995,684 9.75%
Class B: Subordinate $26,662,371 10.75%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. Green Tree is
obligated to pay the Guarantee Amount, equal to the
difference between the Class B Formula Distribution Amount
and the Remaining Amount Available. Green Tree's Guarantee
is backed by a cash Reserve Fund equal to $10,664,948 on the
Closing Date. Green Tree is entitled to replace the cash in
the Reserve Fund with a Letter of Credit issued by a
Qualified Bank.
Nature of Net Excess Cashflow:
1. Guarantee Fee equal to the lesser of (a) the Amount
Available less the Class A Distribution Amount and the Class
B Distribution Amount, and (b) 400 basis points.
2. Class C Certificate (Residual).
Triggers: Yes.
84
<PAGE>
GRAPH--$
85
<PAGE>
MLMI 1990-D
Issue Date: June 1990.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $44,813,959 9.70%
Class B; Subordinate $23,651,365 10.60%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a "Collateral Draw Amount," equal to any
shortfall suffered by the Class B Certificateholders,
subject to the limit of the "Available Collateral Amount."
If Green Tree fails to pay a Collateral Draw Amount, the
Collateral Agent must withdraw cash from the Reserve Fund.
The Collateral consists of cash. Green Tree may replace the
cash with a Letter of Credit. The Available Collateral
Amount equals (i) the Available Cash (initially $3,547,705)
plus (ii) the lesser of (a) 5.36% of the Pool Scheduled
Principal Balance or (b) $6,338,566 minus all Collateral
Draw Amounts heretofore paid, whether by Green Tree or upon
liquidation of the Collateral, but in no event greater than
the Class B Principal Balance. The Monthly Servicing Fee and
the Collateral Guarantee Fee payable to Green Tree are also
subordinated to Class B cashflow.
Nature of Net Excess Cashflow:
1. Collateral Guarantee Fee, equal to 335 basis points.
2. Class C Certificate (Residual).
Triggers: Yes.
86
<PAGE>
GRAPH--$
87
<PAGE>
MLMI 1990-B
Issue Date: March 1990.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $30,139,199 9.80%
Class B; Subordinate $17,158,025 10.75%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a "Collateral Draw Amount,' equal to any
shortfall suffered by the Class B Certificateholders,
subject to the limit of the "Available Collateral Amount."
If Green Tree fails to pay a Collateral Draw Amount, the
Collateral Agent must liquidate the Collateral in order to
make the payment.
The Collateral consists of FHA-insured mobile home contracts
with a Market Value (marked to market weekly) equal to at
least 112% of the Available Collateral Amount. The Available
Collateral Amount is defined as $8,579,013 minus all
Collateral Draw Amounts theretofore paid, whether by Green
Tree or upon liquidation of Collateral, but in no event
greater than the Class B Principal Balance. The Monthly
Servicing Fee and the Collateral Guarantee Fee payable to
Green Tree are also subordinated to Class B cashflow.
Nature of Net Excess Cashflow:
1. Collateral Guarantee Fee, equal to 299 basis points.
2. Class C Certificate (Residual).
Triggers: None.
88
<PAGE>
GRAPH--$
89
<PAGE>
MLMI 1989-H
Issue Date: December 1989.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $43,926,976 9.20%
Class B; Subordinate $25,559,825 10.00%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Limited Guarantee and amounts in the
Guarantee Account, the Policy and the Supplemental Reserve
Fund.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to any shortfall on the Class B
distribution) each month.
If Green Tree fails to make a required Guarantee Payment,
the deficiency (the "Guaranteed Shortfall") will be paid by
MaHCS, unless the Policy Amount has been reduced to zero. If
MaHCS fails to pay the Guaranteed Shortfall, the Trustee
will submit a claim under the Policy for such deficiency
(the "Claim Amount"). FSA can order the Trustee to make a
claim under the Policy in excess of the Claim Amount, in
which case the proceeds are deposited in the Reserve Fund,
which is not an asset of the Trust. If that happens, the
Trustee will thereafter withdraw funds from the Reserve Fund
before making a claim on the Policy.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee of up to 300 basis points.
2. Class C Certificate (Residual).
Triggers: None.
90
<PAGE>
GRAPH--$
91
<PAGE>
MLMI 1989-F
Issue Date: October 1989.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $47,661,574 9.75%
Class B; Subordinate $32,307,576 9.75%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Limited Guarantee and amounts in the
Guarantee Account and the Policy issued by FSA.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to any shortfall on the Class B
distribution) each month.
If Green Tree fails to make a required Guarantee Payment,
the deficiency (the "Guaranteed Shortfall") will be paid by
MaHCS, unless the Policy Amount has been reduced to zero. If
MaHCS fails to pay the Guaranteed Shortfall, the Trustee
will submit a claim under the Policy for such deficiency
(the "Claim Amount"). FSA can order the Trustee to make a
claim under the Policy in excess of the Claim Amount, in
which case the proceeds are deposited in the Reserve Fund,
which is not an asset of the Trust. If that happens, the
Trustee will thereafter withdraw funds from the Reserve Fund
before making a claim on the Policy.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee of up to 300 basis points.
2. Class C Certificate (Residual).
Triggers: None.
92
<PAGE>
GRAPH--$
93
<PAGE>
MLMI 1989-D
Issue Date: June 1989.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $32,962,090 9.45%
Class B; Subordinate $25,453,104 11.80%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual). There is no Guarantee
Fee.
Triggers: None.
94
<PAGE>
GRAPH--$
95
<PAGE>
MLMI 1989-B
Issue Date: March 1989.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $14,858,199 10.80%
Class B; Senior $ 4,311,392 10.80%
Class C; Subordinate $ 9,238,696 10.80%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A and Class B Certificates are supported by the
subordination of the Class C Certificates. The Class C
Certificateholders are entitled to a Green Tree Guarantee.
The Guarantee Payment equals any shortfall in the Class C
Distribution Amount.
Nature of Net Excess Cashflow:
1. Class D Certificate (Residual). There is no Guarantee
Fee.
Triggers: None.
96
<PAGE>
GRAPH--$
97
<PAGE>
MLMI 1988-X
Issue Date: December 1988.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $26,807,558 10.25%
Class B; Subordinate $22,169,062 10.25%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. The Guarantee
Payment will cover all shortfalls in Class B distributions.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual). There is no Guarantee
Fee.
Triggers: None.
98
<PAGE>
GRAPH--$
99
<PAGE>
MLMI 1988-Q
Issue Date: September 1988.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $34,197,715 9.80%
Class B; Subordinate $27,780,449 9.80%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificateholders
are entitled to a Green Tree Guarantee. The Guarantee
Payment will cover all shortfalls in Class B distributions.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual). There is no Guarantee
Fee.
Triggers: None.
100
<PAGE>
GRAPH-$
101
<PAGE>
MLMI 1988-H
Issue Date: June 1988.
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ----------- -------
<S> <C> <C>
Class A; Senior $21,317,093 9.70%
Class B; Subordinate $18,298,417 9.70%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates. The Class B Certificates are
supported by the subordination of the Class C distributions.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual). There is no Guarantee
Fee.
Triggers: None.
102
<PAGE>
GRAPH--$
103
<PAGE>
MLMI 1988-E
Issue Date: March 1988.
<TABLE>
<CAPTION>
Description Pass-
of Current Through
Securities: Balance Rate
- ----------- ----------- -------
<S> <C> <C>
Class A $43,398,005 9.55%
</TABLE>
REMIC/Grantor Trust:REMIC.
Credit Enhancement:
The Certificateholders are entitled to a Limited Guarantee
and amounts in the Guarantee Account and the Policy issued
by FSA.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to all Delinquent Payments and
the Repurchase Price of all Defaulted Contracts) each month,
unless the Guarantee Amount has been reduced to zero.
If Green Tree fails to make a required Guarantee Payment,
MaHCS will be obligated to pay the amount, if any, by which
the Monthly Interest and Monthly Principal due
Certificateholders exceeds the Collected Funds (the
"Guaranteed Shortfall"), unless the Guarantee Amount has
been reduced to zero. If MaHCS fails to pay the Guaranteed
Shortfall, the Trustee will submit a claim under the Policy
for such deficiency (the "Claim Amount"). FSA can order the
Trustee to make a claim under the Policy in excess of the
Claim Amount, in which case the proceeds are deposited in
the Reserve Fund, which is not an asset of the Trust. If
that happens, the Trustee will thereafter withdraw funds
from the Reserve Fund before making a claim on the Policy.
MaHCS is also obligated to pay any Guaranteed Shortfall
arising from any failure by Green Tree to repurchase
defective Contracts. That obligation is also covered by the
Policy.
The "Guarantee Amount" equals $16,387,581 minus losses on
Defaulted Contracts repurchased since January 15, 1994, and
minus the Repurchase Price of all Defective Contracts that
Green Tree was required to repurchase but failed to
repurchase.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers: None.
104
<PAGE>
GRAPH--$
105
<PAGE>
MLMI 1987-C
Issue Date: December 1987.
<TABLE>
<CAPTION>
Description Pass-
of Current Through
Securities: Balance Rate
- ----------- ----------- -------
<S> <C> <C>
Class A $41,750,161 10.10%
</TABLE>
REMIC/Grantor Trust: REMIC.
Credit Enhancement:
The Class A Certificateholders are entitled to a Limited
Guarantee and amounts in the Guarantee Account and the
Policy issued by FSA.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to all Delinquent Payments and
the Repurchase Price of all Defaulted Contracts) each month,
unless the Guarantee Amount has been reduced to zero.
If Green Tree fails to make a required Guarantee Payment,
MaHCS will be obligated to pay the amount, if any, by which
the Monthly Interest and Monthly Principal due
Certificateholders exceeds the Collected Funds (the
"Guaranteed Shortfall"), unless the Guarantee Amount has
been reduced to zero. If MaHCS fails to pay the Guaranteed
Shortfall, the Trustee will submit a claim under the Policy
for such deficiency (the "Claim Amount"). FSA can order the
Trustee to make a claim under the Policy in excess of the
Guaranteed Shortfall, in which case the proceeds are
deposited in the Reserve Fund, which is not an asset of the
Trust. If that happens, the Trustee will thereafter withdraw
funds from the Reserve Fund before making a claim on the
Policy.
MaHCS is also obligated to pay any Guaranteed Shortfall
arising from any failure by Green Tree to repurchase
defective Contracts, subject to the limit of the Repurchase
Obligation Amount. That obligation is also covered by the
Policy.
The "Guarantee Amount" equals $17,145,592 minus unrecovered
delinquencies and losses on Defaulted Contracts since
January 15, 1994, and minus the Repurchase Price of all
Defective Contracts that Green Tree was required to
repurchase but failed to repurchase (subject to the limit of
the Repurchase Obligation Amount).
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers: None.
106
<PAGE>
GRAPH--$
107
<PAGE>
MLMI 1987-B
Issue Date: October 1987.
<TABLE>
<CAPTION>
Description Pass-
of Current Through
Securities: Balance Rate
- ----------- ----------- -------
<S> <C> <C>
Class A $25,742,132 10.20%
</TABLE>
REMIC/Grantor Trust: REMIC.
Credit Enhancement:
The Certificateholders are entitled to a Limited Guarantee
and amounts in the Guarantee Account and the Policy issued
by FSA.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to all Delinquent Payments and
the Repurchase Price of all Defaulted Contracts) each month,
unless the Guarantee Amount has been reduced to zero.
If Green Tree fails to make a required Guarantee Payment or
if the Guarantee Amount has been reduced to zero, MaHCS will
be obligated to pay the amount, if any, by which the Monthly
Interest and Monthly Principal due Certificateholders
exceeds the Collected Funds (the "Guaranteed Shortfall"). If
MaHCS fails to pay the Guaranteed Shortfall, the Trustee
will submit a class under the Policy for the amount of such
deficiency (the "Claim Amount"). FSA can order the Trustee
to make a claim under the Policy in excess of the Claim
Amount, in which case the proceeds are deposited in the
Reserve Fund, which is not an asset of the Trust. If that
happens, the Trustee will thereafter withdraw funds from the
Reserve Fund before making a claim on the Policy.
The "Guarantee Amount" equals $9,847,562 minus losses on
Defaulted Contracts repurchased since January 15, 1994.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers: None.
108
<PAGE>
GRAPH--$
109
<PAGE>
MAHCS 1987-B
Issue Date: June 1987.
<TABLE>
<CAPTION>
Description Pass-
of Current Through
Securities: Balance Rate
- ----------- ----------- -------
<S> <C> <C>
Class A $51,692,915 9.55%
</TABLE>
REMIC/Grantor Trust:Grantor trust.
Credit Enhancement:
The Certificateholders are entitled to a Limited Guarantee
and amounts in the Guarantee Account and the Policy issued
by FSA.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to all Delinquent Payments and
the Repurchase Price of all Defaulted Contracts) each month,
unless the Guarantee Amount has been reduced to zero.
If Green Tree fails to make a required Guarantee Payment or
if the Guarantee Amount has been reduced to zero, MaHCS will
be obligated to pay the amount, if any, by which the Monthly
Interest and Monthly Principal due Certificateholders
exceeds the Collected Funds (the "Guaranteed Shortfall"). If
MaHCS fails to pay the Guaranteed Shortfall, the Trustee
will submit a claim under the Policy for the amount of such
deficiency (the "Claim Amount"). FSA can order the Trustee
to make a claim under the Policy in excess of the Claim
Amount, in which case the proceeds are deposited in the
Reserve Fund, which is not an asset of the Trust. If that
happens, the Trustee will thereafter withdraw funds from the
Reserve Fund before making a claim on the Policy.
The "Guarantee Amount" equals $8,328,454 minus losses on
Defaulted Contracts repurchased since January 15, 1994.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers: None.
110
<PAGE>
GRAPH--$
111
<PAGE>
MAHCS 1987-A
Issue Date: March 1987.
<TABLE>
<CAPTION>
Description Pass-
of Current Through
Securities Balance Rate
- ----------- ----------- -------
<S> <C> <C>
Class A $18,233,098 8.55%
</TABLE>
REMIC/Grantor Trust:Grantor trust.
Credit Enhancement:
The Certificateholders are entitled to a Limited Guarantee
and amounts in the Guarantee Account and the Policy issued
by FSA.
Under the Limited Guarantee, Green Tree is obligated to pay
the Guarantee Payment (equal to all Delinquent Payments and
the Repurchase Price of all Defaulted Contracts) each month,
unless the Guarantee Amount has been reduced to zero.
If Green Tree fails to make a required Guarantee Payment or
if the Guarantee Amount has been reduced to zero, MaHCS will
be obligated to pay the amount, if any, by which the Monthly
Interest and Monthly Principal due Certificateholders
exceeds the Collected Funds (the "Guaranteed Shortfall"). If
MaHCS fails to pay the Guaranteed Shortfall, the Trustee
will submit a claim under the Policy for the amount of such
deficiency (the "Claim Amount"). FSA can order the Trustee
to make a claim under the Policy in excess of the Claim
Amount, in which case the proceeds are deposited in the
Reserve Fund, which is not an asset of the Trust. If that
happens, the Trustee will thereafter withdraw funds from the
Reserve Fund before making a claim on the Policy.
The "Guarantee Amount" equals $33,462,440 minus losses on
Defaulted Contracts repurchased since January 15, 1994.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers: None.
112
<PAGE>
113
GRAPH--$
<PAGE>
III. THE GNMA POOLS
114
<PAGE>
115
<PAGE>
116
<PAGE>
117
<PAGE>
118
<PAGE>
119
<PAGE>
120
<PAGE>
121
<PAGE>
122
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE TRUST OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CERTIFICATES IN
ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
AFFAIRS OF THE TRUST SINCE THE DATE HEREOF.
---------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Certificateholders.............................................. 2
Additional Information..................................................... 2
Summary of Terms........................................................... 3
Special Considerations..................................................... 8
Summary of Transaction..................................................... 9
Green Tree Financial Corporation........................................... 11
The Trust.................................................................. 13
The Trust Property......................................................... 14
Historical and Projected Net Excess Cashflow............................... 21
Yield, Average Life and Prepayment Considerations.......................... 25
Description of the Certificates............................................ 34
Description of the Trust Documents......................................... 38
Use of Proceeds............................................................ 40
Certain Federal Income Tax Consequences.................................... 40
ERISA Considerations....................................................... 44
Legal Investment Considerations............................................ 45
Underwriting............................................................... 46
Legal Matters.............................................................. 46
Appendix I................................................................. 47
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$508,000,000 (APPROXIMATE)
[LOGO OF GREEN TREE APPEARS HERE]
GREEN TREE SECURITIZED NET INTEREST MARGIN TRUST 1994-A
% SECURITIZED NET INTEREST MARGIN CERTIFICATES
---------------
PROSPECTUS
March , 1994
---------------
LEHMAN BROTHERS
MERRILL LYNCH & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 185,862.06
Blue Sky fees and expenses.................................... 10,000.00
Accountant's fees and expenses................................ 500,000.00*
Attorney's fees and expenses.................................. 100,000.00*
Trustee's fees and expenses................................... 15,000.00
Printing and engraving expenses............................... 150,000.00*
Rating Agency fees............................................ 150,000.00*
-------------
Total....................................................... $1,110,862.06
=============
</TABLE>
--------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 302A.521 of the Minnesota Statutes requires Green Tree ("the
Company") to indemnify a person made or threatened to be made a party to a
proceeding by reason of the former or present official capacity of the person
with respect to the Company, against judgments, penalties, fines, including
reasonable expenses, if such person (1) has not been indemnified by another
organization or employee benefit plan for the same judgments, penalties, fines,
including without limitations, excise taxes assessed against the person with
respect to an employee benefit plan, settlements, and reasonable expenses,
including attorneys' fees and disbursements, incurred by the person in
connection with the proceeding with respect to the same acts or omissions; (2)
acted in good faith; (3) received no improper personal benefit, and statutory
procedure has been followed in the case of any conflict of interest by a
director; (4) in the case of a criminal proceeding, had no reasonable cause to
believe the conduct was unlawful; and (5) in the case of acts or omissions
occurring in the person's performance in the official capacity of director or,
for a person not a director, in the official capacity of officer, committee
member, employee or agent, reasonably believed that the conduct was in the best
interests of the Company, or, in the case of performance by a director,
officer, employee or agent of the Company as a director, officer, partner,
trustee, employee or agent of another organization or employee benefit plan,
reasonably believed that the conduct was not opposed to be best interests of
the Company, unless otherwise limited by the Articles of Incorporation or
Bylaws of the Company. In addition, Section 302A.521, subd. 3, requires payment
by the Company, upon written request, of reasonable expenses in advance of
final disposition in certain instances, upon receipt of a written undertaking
by the person to repay all amounts so paid if it is ultimately determined that
the person is not entitled to indemnification, unless otherwise limited by the
Articles of Incorporation or Bylaws of the Company. A decision as to required
indemnification is made by a disinterested majority of the Board of Directors
present at a meeting at which a disinterested quorum is present, or by a
designated committee of the Board, by special legal counsel, by the
shareholders, or by a court.
The Company's Articles of Incorporation provide that a director is not liable
to the Company or its shareholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its shareholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law; (iii) under Sections 302A.559 or 80A.23 of the
Minnesota Statutes; (iv) for any transaction from which the director derived an
improper personal benefit; or (v) for any act or omission occurring prior to
the date such indemnification provision became effective.
The Company maintains a directors' and officers' insurance policy.
II-1
<PAGE>
Pursuant to the form of Underwriting Agreement, a copy of which is included
as Exhibit 1.1 hereto, the Underwriters will agree, subject to certain
conditions, to indemnify the Company, its directors, certain of its officers
and persons who control the Company within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), against certain liabilities.
ITEM 16. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
Not Applicable
(b) Exhibits:
<TABLE>
<C> <S>
1.1 Proposed form of Underwriting Agreement
**3.1 Articles of Incorporation of Green Tree Financial Corporation
**3.2 Bylaws of Green Tree Financial Corporation
4.1 Form of Trust Agreement
4.2 Form of Assignment made by Green Tree Financial Corporation in favor
of Finance I
4.3 Form of Assignment made by Green Tree Financial Corporation in favor
of Finance I and Finance II
4.4 Form of Transfer Agreement among Finance I, Finance II and the Trust
4.5 Form of Finance I Note
4.6 Form of Servicing Agreement between Green Tree Financial Corporation
and the Trust
4.7 Form of Security Agreement between Finance I and the Trust
4.8 Form of Administration Agreement among the Trust, the Administrator
and the Trustee
5.1 Opinion and consent of Dorsey & Whitney as to legality
*8.1 Opinion of Dorsey & Whitney as to tax matters
***21.1 Subsidiaries of the Registrant
23.1 Consent of Dorsey & Whitney (included as part of Exhibit 5.1)
24.1 Power of attorney from officers and directors of the Registrant
signed by an attorney-in-fact (included on page II-4)
</TABLE>
--------
* To be filed by amendment.
** Incorporated by reference to the similarly numbered exhibit to the
Registrant's Registration Statement on Form S-11 (File No. 33-50236),
as amended, which became effective on September 11, 1992.
*** Incorporated by reference to Exhibit 22.1 of the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1992.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as a part
of this registration statement in reliance upon Rule
II-2
<PAGE>
430A and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAINT PAUL, STATE OF MINNESOTA, ON
FEBRUARY 25, 1994.
Green Tree Financial Corporation
By: /s/ John W. Brink
---------------------------------
JOHN W. BRINK
EXECUTIVE VICE PRESIDENT,
TREASURER AND CHIEF FINANCIAL
OFFICER
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the February 25, 1994
- ------------------------------------- Board and Chief
LAWRENCE M. COSS Executive Officer
(Principal
Executive Officer)
and Director
/s/ John W. Brink Executive Vice February 25, 1994
- ------------------------------------- President,
JOHN W. BRINK Treasurer and Chief
Financial Officer
(Principal
Financial Officer)
* Vice President and February 25, 1994
- ------------------------------------- Controller
ROBLEY D. EVANS (Principal
Accounting Officer)
* Director February 25, 1994
- -------------------------------------
RICHARD G. EVANS
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director February 25, 1994
- -------------------------------------
C. THOMAS MAY, JR.
* Director February 25, 1994
- -------------------------------------
W. MAX MCGEE
* Director February 25, 1994
- -------------------------------------
ROBERT S. NICKOLOFF
* Director February 25, 1994
- -------------------------------------
KENNETH S. ROBERTS
* By /s/ John W. Brink
----------------------------
JOHN W. BRINK
AS ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
EDGAR GRAPH SUMMARIES
A diagram entitled "Structural Diagram" shows the legal structure of the
assignment of the Fee Assets and the Residual Assets and the creation of the
Trust. Using a combination of boxes and arrows, the diagram illustrates the
assignment by Green Tree to its subsidiaries of the Fee Assets and the
Residual Assets, the transfer of the Residual Assets to the Trust and the
issuance of the Finance 1 Note to the Trust, and the issuance by the Trust of
the Certificates and the Subordinated Certificates, and also includes the
Reserve Funds.
A graph entitled "Total Securitized Conventional and GNMA Cashflows" shows 3
factors with respect to Total Securitized Conventional and GNMA Cashflows:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Expenses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning February 1987 through February 2018.
A graph entitled "Total Securitized Conventional Cashflows" shows 5 factors with
respect to Total Securitized Conventional Cashflows:
(1) Net Interest Margin
(2) Reserve Fund
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1987 through March 2018.
A graph entitled "Total GNMA Cashflows" shows 5 factors with respect to Total
GNMA Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1987 through January 2013.
A graph entitled "Weighted Average Historical Monthly Prepayment Rates (CPR)"
shows the Weighted Average Historical Monthly Prepayment Rates expressed on a
weighted average constant prepayment rate (CPR) basis. This is plotted on the
graph
<PAGE>
as an annualized CPR percent for each month beginning January 1984 through
December 1993.
A graph entitled "Weighted Average Projected Prepayment Rates (CPR), Increasing
Interest Rate Scenarios" shows 4 different projected prepayment rates for all of
the Contracts, assuming 4 "Interest Rate Shifts":
(1) the Base Case (average CPR=7%)
(2) +100 basis points (average CPR=6%)
(3) +200 basis points (average CPR=5%)
(4) +300 basis points (average CPR=5%)
These 4 projected prepayment rates are plotted on the graph as annualized
constant prepayment rates (CPRs) for each year beginning in January 1994 through
January 2004.
A graph entitled "Weighted Average Projected Prepayment Rates (CPR), Decreasing
Interest Rate Scenarios" shows 4 different prepayment rates for all of the
Contracts, assuming 4 "Interest Rate Shifts":
(1) the Base Case (average CPR=7%)
(2) -100 basis points (average CPR=8%)
(3) -200 basis points (average CPR=10%)
(4) -300 basis points (average CPR=12%)
These 4 projected prepayment rates are plotted on the graph as annualized
constant prepayment rates (CPRs) for each year beginning in January 1994 through
January 2004.
A graph entitled "Weighted Average Projected Default Rates (CDR)" shows the
weighted average projected conditional default rate (CDR) on the Contracts. The
defaults as a percentage of current outstanding principal balance is plotted on
the graph for each year beginning in January 1994 through January 2004.
A graph entitled "Weighted Average Projected Recovery Rates" shows the weighted
average projected rate of recovery for all the Contracts following a default.
The projected recovery percentage is plotted on the graph for each year
beginning in January 1994 through January 2004.
A graph entitled "GTFC 1993-4 Cashflows" shows 3 factors with respect to
Securitized Pool GTFC 1993-4:
(1) Net Interest Margin
(2) Normal Servicing Fee
-2-
<PAGE>
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1993 through December 2018.
A graph entitled "GTFC 1993-3 Cashflows" shows 3 factors with respect to
Securitized Pool GTFC 1993-3:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1993 through September 2018.
A graph entitled "GTFC 1993-2 Cashflows" shows 3 factors with respect to
Securitized Pool GTFC 1993-2:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning June 1993 through June 2018.
A graph entitled "GTFC 1993-1 Cashflows" shows 3 factors with respect to
Securitized Pool GTFC 1993-1:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1993 through March 2018.
A graph entitled "GTFC 1992-2 Cashflows" shows 3 factors with respect to
Securitized Pool GTFC 1992-2:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1992 through December 2017.
A graph entitled "GTFC 1992-1 Cashflows" shows 4 factors with respect to
Securitized Pool GTFC 1992-1:
(1) Net Interest Margin
-3-
<PAGE>
(2) Class B Principal Acceleration
(3) Normal Servicing Fee
(4) Liquidation Losses
These 4 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1992 through September 2017.
A graph entitled "MLMI 1992-D Cashflows" shows 5 factors with respect to
Securitized Pool MLMI 1992-D:
(1) Net Interest Margin
(2) Reserve Fund
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning June 1992 through June 2017.
A graph entitled "MLMI 1992-B Cashflows" shows 5 factors with respect to
Securitized Pool MLMI 1992-B:
(1) Net Interest Margin
(2) Reserve Fund
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1992 through March 2012.
A graph entitled "MLMI 1991-I Cashflows" shows 5 factors with respect to
Securitized Pool MLMI 1991-I:
(1) Net Interest Margin
(2) Reserve Fund
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1991 through December 2011.
A graph entitled "MLMI 1991-G Cashflows" shows 5 factors with respect to
Securitized Pool MLMI 1991-G:
(1) Net Interest Margin
(2) Reserve Fund
-4-
<PAGE>
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1991 through September 2011.
A graph entitled "MLMI 1991-D Cashflows" shows 4 factors with respect to
Securitized Pool MLMI 1991-D:
(1) Net Interest Margin
(2) Reserve Fund Deposit
(3) Normal Servicing Fee
(4) Liquidation Losses
These 4 factors are plotted on the graph as aggregate dollar amounts for each
month beginning June 1991 through June 2011.
A graph entitled "MLMI 1991-B Cashflows" shows 5 factors with respect to
Securitized Pool MLMI 1991-B:
(1) Net Interest Margin
(2) Reserve Fund
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1991 through March 2011.
A graph entitled "MLMI 1990-I Cashflows" shows 5 factors with respect to
Securitized Pool MLMI 1990-I:
(1) Net Interest Margin
(2) Reserve Fund
(3) Class B Principal Acceleration
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1990 through December 2010.
A graph entitled "MLMI 1990-G Cashflows" shows 4 factors with respect to
Securitized Pool MLMI 1990-G:
(1) Net Interest Margin
(2) Reserve Fund Deposit
(3) Normal Servicing Fee
-5-
<PAGE>
(4) Liquidation Losses
These 4 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1990 through September 2010.
A graph entitled "MLMI 1990-D Cashflows" shows 4 factors with respect to
Securitized Pool MLMI 1990-D:
(1) Net Interest Margin
(2) Reserve Fund
(3) Normal Servicing Fee
(4) Liquidation Losses
These 4 factors are plotted on the graphs as aggregate dollar amounts for each
month beginning June 1990 through June 2010.
A graph entitled "MLMI 1990-B Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1990-B:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1990 through March 2010.
A graph entitled "MLMI 1989-H Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1989-H:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1989 through December 2009.
A graph entitled "MLMI 1989-F Cashflows" shows 4 factors with respect to
Securitized Pool MLMI 1989-F:
(1) Net Interest Margin
(2) Spread Account
(3) Normal Servicing Fee
(4) Liquidation Losses
These 4 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1989 through September 2008.
-6-
<PAGE>
A graph entitled "MLMI 1989-D Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1989-D:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning June 1989 through June 2009.
A graph entitled "MLMI 1989-B Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1989-B:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1989 through March 2009.
A graph entitled "MLMI 1988-X Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1988-X:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1988 through December 2008.
A graph entitled "MLMI 1988-Q Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1988-Q:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1988 through September 2008.
A graph entitled "MLMI 1988-H Cashflows" shows 3 factors with respect to
Securitized Pool MLMI 1988-H:
(1) Net Interest Margin
(2) Normal Servicing Fee
(3) Liquidation Losses
These 3 factors are plotted on the graph as aggregate dollar amounts for each
month beginning June 1988 through June 2007.
-7-
<PAGE>
A graph entitled "MLMI 1988-E Cashflows" shows 2 factors with respect to
Securitized Pool MLMI 1988-E:
(1) Net Interest Margin
(2) Normal Servicing Fee
These 2 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1988 through March 2008.
A graph entitled "MLMI 1987-C Cashflows" shows 2 factors with respect to
Securitized Pool MLMI 1987-C:
(1) Net Interest Margin
(2) Normal Servicing Fee
These 2 factors are plotted on the graph as aggregate dollar amounts for each
month beginning December 1987 through December 2007.
A graph entitled "MLMI 1987-B Cashflows" shows 2 factors with respect to
Securitized Pool MLMI 1987-B:
(1) Net Interest Margin
(2) Normal Servicing Fee
These 2 factors are plotted on the graph as aggregate dollar amounts for each
month beginning September 1987 through September 2005.
A graph entitled "MaHCS 1987-B Cashflows" shows 2 factors with respect to
Securitized Pool MaHCS 1987-B:
(1) Net Interest Margin
(2) Normal Servicing
These 2 factors are plotted on the graph as aggregate dollar amounts for each
month beginning June 1987 through June 2006.
A graph entitled "MaHCS 1987-A Cashflows" shows 2 factors with respect to
Securitized Pool MaHCS 1987-A:
(1) Net Interest Margin
(2) Normal Servicing Fee
These 2 factors are plotted on the graph as aggregate dollar amounts for each
month beginning March 1987 through March 2007.
A graph entitled "GNMA 1993 Cashflows" shows 5 factors with respect to GNMA 1993
Cashflows:
(1) Net Interest Margin
-8-
<PAGE>
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1993 through January 2013.
A graph entitled "GNMA 1992 Cashflows" shows 5 factors with respect to GNMA 1992
Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1992 through January 2012.
A graph entitled "GNMA 1991 Cashflows" shows 5 factors with respect to GNMA 1991
Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1991 through January 2011.
A graph entitled "GNMA 1990 Cashflows" shows 5 factors with respect to GNMA 1990
Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1990 through January 2010.
A graph entitled "GNMA 1989 Cashflows" shows 5 factors with respect to GNMA 1989
Cashflows:
(1) Net Interest Margin
-9-
<PAGE>
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1989 through January 2009.
A graph entitled "GNMA 1988 Cashflows" shows 5 factors with respect to GNMA 1988
Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1988 through January 2008.
A graph entitled "GNMA 1987 Cashflows" shows 5 factors with respect to GNMA 1987
Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1987 through January 2007.
A graph entitled "GNMA 1986 Cashflows" shows 5 factors with respect to GNMA 1986
Cashflows:
(1) Net Interest Margin
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1987 through January 2006.
A graph entitled "GNMA Pre-1986 Cashflows" shows 5 factors with respect to GNMA
Pre-1986 Cashflows:
(1) Net Interest Margin
-10-
<PAGE>
(2) Make-up Deposit
(3) FHA Insurance Payment
(4) Normal Servicing Fee
(5) Liquidation Losses
These 5 factors are plotted on the graph as aggregate dollar amounts for each
month beginning January 1987 through January 2008.
-11-
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1.1 Proposed form of Underwriting Agreement
**3.1 Articles of Incorporation of Green Tree Financial Corporation
**3.2 Bylaws of Green Tree Financial Corporation
4.1 Form of Trust Agreement
4.2 Form of Assignment made by Green Tree Financial Corporation in
favor of Finance I
4.3 Form of Assignment made by Green Tree Financial Corporation in
favor of Finance I and Finance II
4.4 Form of Transfer Agreement among Finance I, Finance II and the
Trust
4.5 Form of Finance I Note
4.6 Form of Servicing Agreement between Green Tree Financial
Corporation and the Trust
4.7 Form of Security Agreement between Finance I and the Trust
4.8 Form of Administration Agreement among the Trust, the
Administrator and the Trustee
5.1 Opinion and consent of Dorsey & Whitney as to legality
*8.1 Opinion of Dorsey & Whitney as to tax matters
***21.1 Subsidiaries of the Registrant
23.1 Consent of Dorsey & Whitney (included as part of Exhibit 5.1)
24.1 Power of attorney from officers and directors of the Registrant
signed by an attorney-in-fact (included on page II-4)
</TABLE>
- --------
* To be filed by amendment.
** Incorporated by reference to the similarly numbered exhibit to the
Registrant's Registration Statement on Form S-11 (File No. 33-50236), as
amended, which became effective on September 11, 1992.
*** Incorporated by reference to Exhibit 22.1 of the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1992.
<PAGE>
GREEN TREE SECURITIZED NET INTEREST MARGIN
CERTIFICATES
UNDERWRITING AGREEMENT
----------------------
March __, 1994
LEHMAN BROTHERS INC.
American Express Tower
World Financial Center
New York, New York 10285
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
World Financial Center
North Tower
New York, New York 10281
Dear Sirs:
Green Tree Financial Corporation (the "Company") is a Minnesota corporation
with its principal place of business in Saint Paul, Minnesota. The Company has
filed a Registration Statement relating to the issuance and sale of
$______________ (approximate) principal amount of ______% Securitized Net
Interest Margin Certificates (the "Certificates") evidencing interests in the
Green Tree Securitized Net Interest Margin Trust 1994-A (the "Trust"). The
Certificates will be issued pursuant to a trust agreement (the "Trust
Agreement") dated as of January 1, 1994 among Green Tree Manufactured Housing
Net Interest Margin Finance Corp. I ("Finance I"), a wholly owned subsidiary of
the Company, Green Tree Manufactured Housing Net Interest Margin Finance Corp.
II ("Finance II"), a wholly owned subsidiary of the Company, and Wilmington
Trust Company, a Delaware banking corporation, as Trustee. The Trust will issue
$____________ (approximate) aggregate principal amount of ____% of the
Certificates. The assets of the Trust will consist of (i) the residual cashflow
from 26 real estate mortgage investment
<PAGE>
conduits ("REMICs"), whose assets consist of pools of manufactured housing
contracts sold by or on behalf of the Company to investors between 1987 and
1993, and (ii) a limited recourse note (the "Finance I Note") issued by Finance
I, and certain related property (as described herein). The Finance I Note will
be secured by, and will be payable solely from, (i) Guarantee Fees payable with
respect to 15 pools of manufactured housing contracts created by or on behalf of
the Company between 1987 and 1993, (ii) the excess servicing fees payable with
respect to 28 such pools, and (iii) certain excess spread payable with respect
to manufactured housing contract GNMA Certificates sold by the Company between
1978 and 1993, and certain related property, all as described herein. The
Company, Finance I and Finance II will be referred to collectively herein as the
"Green Tree Parties". The form of the Trust Agreement has been incorporated by
reference as an exhibit to the Registration Statement (hereinafter defined).
The Certificates are more fully described in a Registration Statement that
the Company has furnished to you. Capitalized terms used but not defined herein
shall have the meanings given to them in the Finance I Note, the Assignment
Agreements, the Transfer Agreement, the Servicing Agreement, the Security
Agreement and the Trust Agreement (together, the "Trust Documents"). The term
"you" as used herein, unless the context otherwise requires, shall mean you and
such persons as are named as co-managers in the Terms Agreement (defined below).
The offering of Certificates pursuant to this Agreement will be made
through you or through an underwriting syndicate managed by you. Whenever the
Company determines to make an offering of Certificates, it will enter into an
agreement (the "Terms Agreement") providing for the sale of such Certificates
to, and the purchase and offering thereof by, you and such other underwriters,
if any, selected by you as have authorized you to enter into such Terms
Agreement on their behalf (the "Underwriters", which term shall include you
whether acting alone in the sale of Certificates or as a member of an
underwriting syndicate). The Terms Agreement relating to the offering of
Certificates shall specify, among other things, the price or prices at which the
Certificates are to be purchased by the Underwriters from the Company and the
initial public offering price or prices or the method by which the price or
prices at which such Certificates are to be sold will be determined. A Terms
Agreement, which shall be substantially in the form of Exhibit A hereto, may
take the form of an exchange of any standard form of written telecommunication
between you and the Company. The offering of Certificates will be governed by
this Agreement, as supplemented by the Terms Agreement, and this Agreement and
such Terms Agreement shall inure to the benefit of
2
<PAGE>
and be binding upon the Underwriters participating in the offering of such
Certificates.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 51935) and two related
preliminary prospectuses for the registration of the Certificates under the
Securities Act of 1933 (the "1933 Act"), and has filed, and proposes to file,
such amendments thereto as may have been required to the date hereof pursuant to
the 1933 Act and the rules of the Commission thereunder (the "Regulations").
Such registration statement, as amended at the time when it became effective
under the 1933 Act, and the prospectus relating to the sale of Certificates by
the Company constituting a part thereof, as from time to time each is amended or
supplemented pursuant to the 1933 Act or otherwise, are referred to herein as
the "Registration Statement" and the "Prospectus", respectively.
The Company understands that you propose to make a public offering of the
Certificates as soon as you deem advisable after the Terms Agreement has been
executed and delivered.
SECTION 1. Representations and Warranties. Each of the Green Tree Parties
------------------------------
represents and warrants to you as of the date hereof, and to the Underwriters
named in the Terms Agreement, all as of the date of such Terms Agreement (in
each case, the "Representation Date") as follows:
(a) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did, and as of the Representation
Date will, comply in all material respects with the requirements of the
1933 Act and the Regulations. The Registration Statement, at the time it
became effective did not, and as of the Representation Date will not,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as amended or
supplemented at the time the Registration Statement became effective did
not, and as amended or supplemented as of the Representation Date will not,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in, or omissions from, the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by you
expressly for use in the Registration Statement or Prospectus. The
conditions to the use by the Company of a registration statement on Form S-
3
<PAGE>
under the 1933 Act, as set forth in the General Instructions to Form S-3,
have been satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of the Company which are
required to be filed as exhibits to the Registration Statement pursuant to
the 1933 Act or the Regulations which have not been so filed or
incorporated by reference.
(b) Each of the Green Tree Parties has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Minnesota or Delaware, as applicable, with corporate power and
authority to own, lease and operate its properties and conduct its business
as described in the Prospectus and to enter into and perform its
obligations under this Agreement, the Trust Documents and the Terms
Agreement; and each of the Green Tree Parties is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which the ownership or lease of its properties or the
conduct of its business requires such qualification.
(c) Each of the Green Tree Parties is not in violation of its
articles of incorporation, or certificate of incorporation, as applicable,
or by-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it or its properties may be bound, which
default might result in any material adverse change in the financial
condition, earnings, affairs or business of any of the Green Tree Parties
or which might materially and adversely affect the properties or assets
thereof.
(d) The execution and delivery by the Company of this Agreement and
the Terms Agreement and the execution and delivery of any Trust Document by
a Green Tree Party are within the corporate power of the Company or the
related Green Tree Party and have been duly authorized by all necessary
corporate action on the part of the Company or the related Green Tree
Party; and neither the issuance and sale of the Certificates to the
Underwriters, nor the execution and delivery by the Company of this
Agreement and the Terms Agreement, nor the execution and delivery of any
Trust Document by a Green Tree Party, nor the consummation by any of the
Green Tree Parties of any of the transactions therein contemplated, nor
compliance by any of the Green Tree Parties with the provisions hereof or
thereof, will materially conflict with or result in a material breach of,
4
<PAGE>
or constitute a material default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on any of
the Green Tree Parties or its properties or the ariticles of incorporation
or certificate of incorporation, as applicable, or by-laws of any of the
Green Tree Parties, or any of the provisions of any indenture, mortgage,
contract or other instrument to which any of the Green Tree Parties is a
party or by which it is bound or result in the creation or imposition of
any lien, charge or encumbrance upon any of its property pursuant to the
terms of any such indenture, mortgage, contract or other instrument.
(e) This Agreement has been, and the Terms Agreement when executed
and delivered as contemplated hereby and thereby will have been, duly
authorized, executed and delivered by the Company, and each constitutes, or
will constitute when so executed and delivered, a legal, valid and binding
instrument enforceable against the Company in accordance with its terms,
subject (i) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors rights generally, (ii)
as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and
(iii) as to enforceability with respect to rights of indemnity thereunder,
to limitations of public policy under securities laws.
(f) The Trust Documents when executed and delivered as contemplated
hereby and thereby will have been duly authorized, executed and delivered
by the Green Tree Parties, and will constitute when so executed and
delivered, a legal, valid and binding instrument enforceable against any of
the Green Tree Parties in accordance with its terms, subject (i) to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and (ii) as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(g) As of the Closing Time (as defined below), the Certificates will
have been duly and validly authorized, and, when executed and authenticated
as specified in the Trust Agreement, will be validly issued and outstanding
and will be entitled to the benefits of the Trust Agreement, and will be
binding obligations of the trust to the extent provided in the Trust
Agreement.
(h) No filing or registration with, notice to or consent, approval,
authorization or order of any court or
5
<PAGE>
governmental authority or agency is required for the consummation by the
Company of the transactions contemplated by this Agreement, any of the
Trust Documents or the Terms Agreement, except such as may be required
under the 1933 Act, the Regulations, or state securities or Blue Sky laws.
(i) Each of the Green Tree Parties possesses all material licenses,
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it and as described in the Prospectus and has
received no notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the conduct of the
business, operations, financial condition or income of any of the Green
Tree Parties.
(j) As of the Closing Time, the Trust Property will have been duly
and validly assigned or issued to the Trustee in accordance with the
Assignment Agreements or Finance I Note [and the Security Agreement]; and
when such assignment is effected, a duly and validly perfected transfer of
all such Trust Property subject to no prior lien, mortgage, security
interest, pledge, charge or other encumbrance created by any of the Green
Tree parties will have occurred.
(k) None of the Green Tree Parties nor the Trust created by the Trust
Agreement will be subject to registration as an "investment company" under
the Investment Company Act of 1940, as amended (the "1940 Act").
(l) The Certificates and the Trust Documents conform in all material
respects to the descriptions thereof contained in the Prospectus.
(m) At the Closing Time, the Certificates shall have received the
certificate rating specified in the Terms Agreement.
(n) At the Closing Time, each of the representations and warranties
of the Green Tree Parties set forth in any of the Transaction Documents
will be true and correct.
SECTION 2. Purchase and Sale. The commitment of the Underwriters to
-----------------
purchase Certificates pursuant to the Terms Agreement shall be deemed to have
been made on the basis of the
6
<PAGE>
representations and warranties herein contained and shall be subject to the
terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Certificates to be
purchased by you shall be made at the office of Brown & Wood, One World Trade
Center, New York, New York 10048, or at such other place as shall be agreed upon
by-you and the Company, at such time or date as shall be agreed upon by you and
the Company in the Terms Agreement (each such time and date being referred to as
the "Closing Time"). Payment shall be made to the Company, in immediately
available Federal funds wired to such bank as may be designated by the Company.
The Certificates shall be in such denominations and registered in such names as
the Underwriters may request in writing at least two business days prior to the
Closing Time. The Certificates, which may be in temporary form, will be made
available for examination and packaging by you no later than 12:00 noon on the
first business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with you as
------------------------
follows:
(a) Immediately following the execution of the Terms Agreement, the
Company will prepare the Prospectus setting forth the principal amount of
the Certificates, the price at which the Certificates are to be purchased
by you, either the initial public offering price or the method by which the
price by which the Certificates are to be sold will be determined, the
selling concession(s) and reallowance(s), if any, and such other
information as you and the Company deem appropriate in connection with the
offering of the Certificates. The Company will promptly transmit copies of
the Prospectus to the Commission for filing pursuant to Rule 424 under the
1933 Act and will furnish to you as many copies of the Prospectus as you
shall reasonably request.
(b) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Certificates by you or the
Underwriters, any event shall occur or condition exist as a result of which
it is necessary, in the opinion of your counsel, counsel for the Company,
or otherwise, to further amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of circumstances existing at the time it is delivered to a
purchaser, not misleading or if it shall be necessary, in the opinion of
any such counsel or otherwise, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
7
<PAGE>
requirements of the 1933 Act or the Regulations thereunder, the Company
will promptly prepare and file with the Commission such amendment or
supplement as may be necessary to correct such untrue statement or
omission or to make the Registration Statement comply with such
requirements, and within two business days will furnish to you as many
copies of the Prospectus, as so amended or supplemented, as you shall
reasonably request.
(c) The Company will give you reasonable notice of its intention to
file any amendment to the Registration Statement or any amendment or
supplement to the Prospectus, whether pursuant to the 1933 Act or otherwise
(other than reports to be filed pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act")), will furnish you with copies of any
such amendment or supplement or other documents proposed to be filed a
reasonable time in advance of filing, and will not file any such amendment
or supplement or other documents in a form to which you or your counsel
shall object.
(d) The Company will notify you immediately, and confirm the notice
in writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the mailing or the delivery to the Commission for filing
of any supplement to the Prospectus or any document, other than reports to
be filed pursuant to the 1934 Act, (iii) of the receipt of any comments
from the Commission with respect to the Registration Statement or the
Prospectus, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or suspension of the qualification of the Certificates or the initiation of
any proceedings for that purpose. The Company will make every reasonable
effort to prevent the issuance of any such stop order and, if any such stop
order is issued, to obtain the lifting thereof at the earliest possible
moment.
(e) The Company will deliver to you as many signed and as many
conformed copies of the Registration Statement (as ordinarily filed) and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated by reference in the
Prospectus) as you may reasonably request.
(f) The Company will endeavor, in cooperation with you, to qualify
the Certificates for offering and sale under the applicable securities laws
of such states and other
8
<PAGE>
jurisdictions of the United States as you may designate, and will
maintain or cause to be maintained such qualifications in effect for as
long as may be required for the distribution of the Certificates. The
Company will file or cause the filing of such statements and reports as
may be required by the laws of each jurisdiction in which the
Certificates have been qualified as above provided.
SECTION 4. Conditions of Underwriter's Obligations. The obligations of
---------------------------------------
the Underwriters to purchase Certificates pursuant to the Terms Agreement are
subject to the accuracy of the representations and warranties on the part of the
Company herein contained, to the accuracy of the statements of the Company's
officers made pursuant hereto, to the performance by the Company of all of its
obligations hereunder and to the following further conditions:
(a) At the Closing Time (i) no stop order suspending the
effectiveness of the Registration Statement shall have been issued or
proceedings therefor initiated or threatened by the Commission, (ii) the
Certificates shall have received the rating specified in the Terms
Agreement, and (iii) there shall not have come to your attention any facts
that would cause you to believe that the Prospectus, at the time it was
required to be delivered to a purchaser of the Certificates, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at such time, not misleading.
(b) At or prior to the Closing Time you shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Dorsey & Whitney, special counsel and general counsel for the Company,
in form and substance satisfactory to such of you as may be named in
the Terms Agreement, to the effect that:
(i) Each of the Green Tree Parties has been duly organized and
is validly existing as a corporation in good standing under the laws
of the State of Minnesota or Delaware, as applicable;
(ii) Each of the Green Tree Parties has the corporate power and
corporate authority to carry on its business as described in the
Prospectus and to own and operate its properties in connection
therewith.
9
<PAGE>
(iii) Each of the Green Tree Parties is qualified to do business,
and is in good standing, as a foreign corporation in each U.S.
jurisdiction in which the character of the business owned or leased by
it makes such qualification necessary, except where the failure to
be so qualified would not have a material adverse effect on the
financial condition of any of the Green Tree Parties.
(iv) This Agreement and the Terms Agreement have been duly
authorized, executed and delivered by the Company, and each is a valid
and binding obligation of the Company enforceable against the Company
in accordance with its terms, except that (A) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, (B) such enforcement may be limited by
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law), and (C) the
enforceability as to rights to indemnity thereunder may be limited
under applicable law.
(v) Each of the Trust Documents have been duly authorized,
executed and delivered by, is a valid and binding obligation of, and
is enforceable against any of the Green Tree Parties which is a party
thereto, in accordance with its terms, except that (A) such
enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (B) such
enforcement may be limited by general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law).
(vi) The execution and delivery by the Company of this Agreement
and the Terms Agreement and the execution and delivery by any of the
Green Tree Parties of any of the Trust Documents and the signing of
the Registration Statement by the Company are within the corporate
power of the Company or the related Green Tree Party and have been
duly authorized by all necessary corporate action on the part of the
related Green Tree Party; and neither the issue and sale of the
Certificates, nor the consummation of the transactions contemplated
herein nor the fulfillment of the terms hereof will, to the best of
such counsel's knowledge, conflict with or constitute a breach of, or
default
10
<PAGE>
under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the related Green Tree
Party pursuant to any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which any Green Tree Party is a
party or by which it may be bound or to which the property or assets
of any Green Tree Party are subject (which contracts, indentures,
mortgages, loan agreements, notes, leases and other such instruments
have been identified by the related Green Tree Party to such
counsel), nor will such action result in any violation of the
provisions of the articles of incorporation or certificate of
incorporation, as applicable, or by-laws of any Green Tree Party or,
to the best of such counsel's knowledge, any law, administrative
regulation or administrative or court decree.
(vii) The Certificates have been duly authorized and, when
executed and authenticated as specified in the Trust Agreement and
delivered and paid for pursuant to this Agreement and the Terms
Agreement, will be duly issued and entitled to the benefits of the
Trust Agreement.
(viii) The Security Agreement and the Assignment Agreements
create a valid security interest in favor of the Trustee in the Trust
Property on the date hereof, which security interest of the Trustee in
the Trust Property will be perfected and will constitute a first
perfected security interest upon the filing of Uniform Commercial Code
("UCC") financing statements in the offices of the Secretary of State
of Minnesota; provided, however, that (1) such counsel need express no
opinion, (a) as to the continuation of a security interest in the
Contracts if the Trustee does not file continuation statements as
required by the Pooling and Servicing Agreement or (b) as to the
priority of any security interest in the Contracts against any liens,
claims or other interests that arise by operation of law and do not
require any filing or similar action in order to take priority over
perfected security interests.
(ix) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or
order of any Minnesota or Delaware or federal court or governmental
authority or agency is required for the consummation by any Green Tree
Party of the transactions contemplated by this
11
<PAGE>
Agreement or the Terms Agreement, except such as may be required
under the 1933 Act or the Regulations, or state securities or Blue
Sky laws.
(x) As of the Closing Date, the Registration Statement is
effective under the 1933 Act and, to the best of such counsel's
knowledge and information, no stop order suspending the effectiveness
of the Registration Statement has been issued under the 1933 Act or
proceedings there for initiated or threatened by the Commission.
(xi) The Trust Agreement is not required to be qualified under the
Trust Indenture Act of 1939, as amended.
(xii) The conditions to the use by the Company of a registration
statement on Form S-3 under the 1933 Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus.
(xiii) As of the Closing Date, to the best of such counsel's
knowledge, there are no contracts or documents of any Green Tree Party
which are required to be filed as exhibits to the Registration
Statement pursuant to the 1933 Act or the Regulations thereunder which
have not been so filed or incorporated by reference.
(xiv) As of the Closing Date, the statements in the Prospectus
under the heading "Certain Federal Income Tax Consequences," to the
extent that they constitute matters of law or legal conclusions with
respect thereto, have been prepared or reviewed by such counsel and
are correct in all material respects.
(xv) The Trust created by the Trust Agreement is not, and will not
as a result of the offer and sale of the Certificates as contemplated
in the Prospectus and in this Agreement become, an "investment
company" or "under the control of an investment company" as such terms
are defined in the 1940 Act.
(xvi) As of the Closing Date, the statements in the Prospectus
under the captions "Description of the Certificates" and "Description
of the Trust Documents," insofar as such statements purport to
summarize certain terms of the Certificates and the
12
<PAGE>
Trust Documents, constitute a fair summary of such documents.
(xvii) The Registration Statement and the Prospectus (other than
the financial statements and other financial, statistical and
numerical information included therein, as to which no opinion need
be rendered) as of their respective effective or issue dates,
complied as to form in all material respects with the requirements
of the 1933 Act and the Regulations thereunder.
(xviii) The execution, delivery and performance by each of the
Green Tree Parties of any of the Trust Documents do not require the
consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of any federal,
state or other governmental agency or authority which has not
previously been effected.
Such counsel shall state that it has participated in the conferences with
officers and other representatives of the Company, your counsel, representatives
of the independent accountants for the Company and you at which the contents of
the Registration Statement and the Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for, the factual
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (except as stated in paragraphs (xv)
and (xvii) above) and has made no independent check or verification thereof for
the purpose of rendering this opinion, on the basis of the foregoing (relying as
to materiality to a large extent upon the certificates of officers and other
representatives of the Company), nothing has come to their attention that leads
such counsel to believe that the Registration Statement, when it became
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Registration Statement and the
Prospectus on the date of the Terms Agreement contained, and the Prospectus on
the date hereof contains, any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel need express no view with respect to the
financial statements, schedules and other financial, statistical and numerical
data included in or
13
<PAGE>
incorporated by reference into the Registration Statement or the Prospectus.
Said counsel may state that they are admitted to practice only in the State
of Minnesota, that they are not admitted to the Bar in any other State and are
not experts in the law of any other State and to the extent that the foregoing
opinions concern the laws of any other State such counsel may rely upon the
opinion of counsel satisfactory to you and admitted to practice in such
jurisdiction. Any opinions relied upon by such counsel as aforesaid shall be
addressed to you and shall be delivered together with the opinion of such
counsel, which shall state that such counsel believes that their reliance
thereon is justified.
(2) The favorable opinion of counsel to the Trustee, dated as of the
Closing Time, addressed to you and in form and scope satisfactory to your
counsel, to the effect that:
(i) The Trust Agreement has been duly authorized, executed and
delivered by the Trustee and is enforceable against the Trustee in
accordance with its terms, subject to customary and usual exceptions.
(ii) The Trustee has full power and authority to execute and
deliver the Trust Agreement and to perform its obligations thereunder.
(iii) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending or threatened against
or affecting the Trustee before or by any court, arbitrator,
administrative agency or other governmental authority which, if
adversely decided, would materially and adversely affect the ability
of the Trustee to carry out the transactions contemplated in the Trust
Agreement.
(iv) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body
of the jurisdiction of incorporation of the Trustee is required for
the execution, delivery or performance by the Trustee of the Trust
Agreement.
In rendering such opinion, such counsel may rely, as to
matters of fact, to the extent deemed proper and stated therein, on certificates
of responsible officers of the Trustee or public officials.
(3) The favorable opinion or opinions, dated as of the Closing Time,
of counsel for the Underwriters with respect
14
<PAGE>
to the issue and sale of the Certificates, the Registration Statement,
this Agreement, the Prospectus and other related matters as you may
require.
(c) At the Closing Time you shall have received a certificate of the
President or a Vice President of each of the Green Tree Parties, dated as of
such Closing Time, to the effect that the representations and warranties of each
of the Green Tree Parties contained in Section 1 are true and correct with the
same force and effect as though such Closing Time were the Representation Date.
(d) You shall have received from KPMG Peat Marwick, or other independent
certified public accountants acceptable to you, a letter, dated as of the Terms
Agreement, or as soon thereafter as is practicable, and as of the Closing Time,
delivered at such times, in the form heretofore agreed to.
(e) At the Closing Time you shall have received, addressed to you, any
additional opinions delivered by counsel pursuant to the request of the Rating
Agencies rating the Certificates.
(f) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they reasonably may require for
the purpose of enabling them to pass upon the issuance and sale of the
Certificates as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
the Certificates as herein contemplated shall be satisfactory in form and
substance to you and counsel for the Underwriters.
(g) As of the Closing Time, each of the Trust Documents will have been
duly authorized, executed and delivered by, and will constitute a legal, valid
and binding obligation of, and will be enforceable against each of the Green
Tree Parties which is a party thereto, in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally and as to enforceability, to general
principles of equity (regardless whether enforcement is sought in a proceeding
in equity or at law).
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, the Terms Agreement may be terminated by
you by notice to the Company at any time at or prior to the Closing Time, and
such termination
15
<PAGE>
shall be without liability of any party to any other party except as provided
in Section 5.
SECTION 5. Payment of Expenses. The Company will pay all expenses
-------------------
incident to the performance of its obligations under this Agreement, including
without limitation those related to (i) the filing of the Registration Statement
and all amendments thereto, (ii) the printing and delivery to the Underwriters,
in such quantities as you may reasonably request, of copies of this Agreement,
each Terms Agreement, any agreements among underwriters and selling agreements
and the Underwriters' questionnaires and powers of attorney, (iii) the
preparation, issuance and delivery of the Certificates to the Underwriters,
(iv) the fees and disbursements of the Company's counsel and accountants, (v)
the qualification of the Certificates under securities and Blue Sky laws and
the determination of the eligibility of the Certificates for investment in
accordance with the provisions of Section 3(g), including filing fees, and the
fees and disbursements of your counsel in connection therewith and in
connection with the preparation of any Blue Sky Survey and Legal Investment
Survey, (vi) the printing and delivery to the Underwriters, in such quantities
as you may reasonably request, hereinafter stated, of copies of the
Registration Statement and Prospectus and all amendments and supplements
thereto, and of any Blue Sky Survey and Legal Investment Survey, (vii) the
printing and delivery to the Underwriters, in such quantities as you may
reasonably request, of copies of the Pooling and Servicing Agreement, (viii)
the fees charged by investment rating agencies for rating the Certificates,
(ix) the fees and expenses incurred in connection with the listing of the
Certificates on any national securities exchange, (x) the fees and expenses,
if any, incurred with respect to the National Association of Securities
Dealers, Inc., including the fees and disbursements of counsel for you in
connection therewith and (xi) the fees and expenses of the Trustee and its
counsel.
If the Terms Agreement is terminated by you in accordance with the
provisions of Section 4 or Section 9(i) hereof, the Company shall reimburse you
for all reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriter.
SECTION 6. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless you and each person, if any, who controls you within the meaning of
Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement of a
material fact contained in the
16
<PAGE>
Registration Statement (or any amendment thereto), or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact contained in
the Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, unless such untrue statement or omission or alleged untrue
statement or omission.was made in reliance upon and in conformity with written
information furnished to the Company by the Underwriters expressly for use in
the Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such untrue
statement or omission, (A) if such settlement is effected with the written
consent of the Company or (B) if such settlement is effected without the written
consent of the Company more than 30 days after receipt by the Company of a
notice from the Underwriters, substantially reflecting the proposed terms of
such settlement, to which the Company has not responded prior to the date such
settlement is effected; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by you), reasonably incurred in investigating,
preparing to defend or defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above, which expenses shall
be reimbursed as they are incurred.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have. Insofar as this indemnity may permit
indemnification for liabilities under the 1933 Act of any person who is a
partner of the Underwriters entitled to indemnity hereby or who controls the
Underwriters within the meaning of Section 15 of the 1933 Act and who, at the
date of this Agreement is a director, officer or controlling person of the
company, such indemnity agreement is subject to the undertaking of the Company
in the Registration Statement.
17
<PAGE>
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of the Company's directors, each of the Company's officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, but only with respect to untrue statements or
omissions or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability that such Underwriter may otherwise have.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it with respect to which indemnity may be
sought hereunder but failure to so notify an indemnifying party shall not
relieve it from any liability that it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to local
counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company on the one
hand, and the Underwriters, on the other, shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company and one or more of the
Underwriters (i) in such proportion as shall be appropriate to reflect the
relative benefit received by the Underwriters, as represented by the percentage
that the Underwriting discount or discounts on the cover of such Prospectus
bears to the initial public offering price or prices as set forth thereon, and
the Company shall be responsible for the balance; or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the benefit referred to in
clause (i) above but also the relative fault of the Company on the one hand and
the Underwriters on the other with respect to statements or omissions which
resulted in such
18
<PAGE>
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section,
each person, if any, who controls the Underwriters within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as the
Underwriters and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of Officers of any of the Green Tree Parties submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any termination of this Agreement, or any investigation made by or on behalf
of the Underwriters or controlling person thereof, or by or on behalf of any of
the Green Tree Parties and shall survive delivery of any Certificates to the
Underwriters.
SECTION 9. Termination of Agreement. This Agreement may be terminated for
------------------------
any reason at any time by either the Company or you upon the giving of thirty
days' written notice of such termination to the other party hereto. You, as
Representative of the Underwriters named in the Terms Agreement, may also
terminate the Terms Agreement, immediately upon notice to the Company, at any
time at or prior to the Closing Time (i) if there has been, since the date of
such Terms Agreement or since the respective dates as of which information is
given in the Registration Statement or Prospectus any change, or any development
involving a prospective change in, or affecting, the condition, financial or
otherwise, earnings, affairs or business of the Company whether or not arising
in the ordinary course of business, which in your judgment would materially
impair the market for, or the investment quality of, the Certificates, or (ii)
if there has occurred any outbreak of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in your judgment, impracticable to market the Certificates or enforce
contracts for the sale of the Certificates, or (iii) if trading generally on
either the New York Stock Exchange or the American Stock Exchange has been
suspended, or minimum or maximum prices for securities have been required, by
either of said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal,
Minnesota or New
19
<PAGE>
York authorities. In the event of any such termination, (A) the covenants set
forth in Section 3 with respect to any offering of Class B Certificates shall
remain in effect so long as the Underwriters own any such Certificates purchased
from the Company pursuant to the Terms Agreement and (B) the covenant set forth
in Section 3(c), the provisions of Section 5, the indemnity agreement set forth
in Section 6, and the contribution provisions set forth in Section 7, and the
provisions of Sections 8 and 13 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters participating in an offering of Certificates shall fail at the
Closing Time to purchase the Certificates which it or they are obligated to
purchase hereunder and under the Terms Agreement (the "Defaulted Certificates"),
then such of you as are named therein shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Certificates in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, you have not completed such arrangements
within such 24-hour period, then:
(1) if the aggregate principal amount of Defaulted Certificates does
not exceed 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to such Terms Agreement, the non-defaulting Underwriters
named in such Terms Agreement shall be obligated to purchase the full
amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all such non-
defaulting Underwriters, or
(2) if the aggregate principal amount of Defaulted Certificates
exceeds 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to such Terms Agreement, the Terms Agreement shall
terminate, without any liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriters from liability with respect to any default of such Underwriters
under this Agreement and the Terms Agreement.
In the event of a default by any Underwriters as set forth in this Section,
either you or the Company shall have the right to postpone the Closing Time for
a period of time not exceeding seven days in order that any required changes in
the Registration Statement or Prospectus or in any other documents or
arrangements may be effected.
20
<PAGE>
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to you at the address set forth on the first page
hereof, attention of the Syndicate Department. Notices to the Company shall be
directed to Green Tree Financial Corporation, 1100 Landmark Towers, 345 St.
Peter Street, Saint Paul, Minnesota 55102-1639, attention of the Secretary, with
a copy to the Treasurer.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon you and the Company and any Terms Agreement shall inure to the
benefit of and be binding upon the Company and any Underwriter who becomes a
party to a Terms Agreement, and their respective successors. Nothing expressed
or mentioned in this Agreement or a Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties hereto
or thereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives any legal or equitable right, remedy or claim under or with
respect to this Agreement or the Terms Agreement or any provision herein or
therein contained. This Agreement and the Terms Agreement and all conditions
and provisions hereof or thereof are intended to be for the sole and exclusive
benefit of the parties and their respective successors and said controlling
persons and officers and directors and their heirs and legal representatives (to
the extent of their rights as specified herein and therein) and for the benefit
of no other person, firm or corporation. No purchaser of Certificates from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement and each Terms
----------------------
Agreement shall be governed by the laws of the State of New York. Specified
times of day refer to New York City time.
SECTION 14. Counterparts. This Agreement and the Terms Agreement may be
------------
executed in counterparts, each of which shall constitute an original of any
party whose signature appears on it, and all of which shall together constitute
a single instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and the
Company in accordance with its terms.
Very truly yours,
GREEN TREE FINANCIAL CORPORATION
By
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
LEHMAN BROTHERS INC.
By
----------------------------
Name:
Title:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
----------------------------
Name:
Title:
22
<PAGE>
EXHIBIT A
GREEN TREE SECURITIZED NET INTEREST MARGIN
CERTIFICATES
FORM OF TERMS AGREEMENT
-----------------------
[To Be Provided]
A-1
<PAGE>
Exhibit 4.1
TRUST AGREEMENT
Dated as of January 1, 1994
among
GREEN TREE MANUFACTURED HOUSING
NET INTEREST MARGIN FINANCE CORP. I,
GREEN TREE MANUFACTURED HOUSING
NET INTEREST MARGIN FINANCE CORP. II,
and
WILMINGTON TRUST COMPANY
Trustee
GREEN TREE SECURITIZED NET INTEREST MARGIN TRUST 1994-A
<PAGE>
THIS TRUST AGREEMENT, dated as of January 1, 1994, is made among Green
Tree Manufactured Housing Net Interest Margin Finance Corp. I, a Delaware
corporation ("Finance I"), Green Tree Manufactured Housing Net Interest Margin
Finance Corp. II, a Delaware corporation ("Finance II") and Wilmington Trust
Company, a Delaware banking corporation, as Trustee (in such capacity, the
"Trustee").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All terms defined in the Assignment Agreements,
-----------
the Finance I Note, the Security Agreement, the Servicing Agreement or the
Transfer Agreement (each as defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following words
and phrases, unless otherwise specified, shall have the following meanings:
Administration Agreement: The Administration Agreement dated as of January
------------------------
1, 1994, among the Administrator, the Trust and the Trustee, as the same may be
amended and supplemented from time to time.
Administrator: First Trust National Association, or any successor
-------------
Administrator under the Administration Agreement.
Agreement or "this Agreement": This Trust Agreement, all amendments and
-----------------------------
supplements thereto and all exhibits and schedules to any of the foregoing.
Amount Available: With respect to any Distribution Date, the sum of the
----------------
amounts contained in the Certificate Account on such Distribution Date.
Assignment Agreements: Each of the Assignment Agreements, dated as of
---------------------
January 1, 1994, (i) between Green Tree and Finance I; and (ii) among Green
Tree, Finance I and Finance II.
Authentication Agent: First Trust National Association, or its successor
--------------------
in interest, and any successor authentication agent appointed as provided in
this Agreement.
Book-Entry Certificate: Any Senior Certificate registered in the name of
----------------------
the Depository or its nominee, ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
<PAGE>
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
Business Day: Any day other than (a) a Saturday or a Sunday, or (b)
------------
another day on which banking institutions in the city in which a person is
taking action hereunder are authorized or obligated by law, executive order, or
governmental decree to be closed.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
----------------------
Del. Code (S) 3801 et seq., as the same may be amended from time to time.
Certificate: A Senior Certificate or a Subordinated Certificate, as
-----------
applicable.
Certificate Account: The account designated as the Certificate Account in,
-------------------
and which is established and maintained pursuant to, Section 5.1.
Certificate Majority: With respect to any date of determination, (i) with
--------------------
respect to the Senior Certificates, Certificate Owners owning not less than a
majority of the aggregate outstanding principal amount of the Senior
Certificates, or (ii) with respect to the Subordinated Certificates, the Holders
of not less than a majority of the aggregate outstanding principal amount of the
Subordinated Certificates.
Certificate Owner: With respect to any Book-Entry Certificate, each Person
-----------------
who is the beneficial owner of a Book-Entry Certificate as reflected in the
records of the Depository or if a Depository Participant is not the Certificate
Owner, then as reflected in the records of a Person maintaining an account with
the Depository (directly or indirectly, in accordance with the rules of the
Depository); and with respect to any Definitive Certificate, the
Certificateholder.
Certificate Register and Certificate Registrar: The register maintained
----------------------------------------------
and the registrar appointed pursuant to Section 3.6.
Certificate of Trust: The Certificate of Trust in the form of Exhibit A
--------------------
hereto filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
Certificateholder or Holder: A Person in whose name a Certificate is
---------------------------
registered in the Certificate Register.
Closing Date: March __, 1994.
------------
Code: The Internal Revenue Code of 1986, as amended.
----
Corporate Trust Office: The principal office of the Trustee at which at
----------------------
any particular time its corporate trust business shall be administered, which
office at the Closing Date is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration; the
-2-
<PAGE>
telecopy number for the Corporate Trust Office on the date of the execution of
this Agreement is (302) 651-8882.
Cut-Off Date: January 1, 1994.
------------
Definitive Certificate: The meaning specified in Section 3.6(h).
----------------------
Demand Note: The Demand Note, dated March __, 1994, issued by Green Tree
-----------
to Finance II.
Depositor: Finance I in its capacity as depositor hereunder.
---------
Depository: The initial Depository, The Depository Trust Company, the
----------
nominee of which is Cede & Co., as the registered Holder of $____________ in
aggregate principal amount of the Senior Certificates as of the Closing Date,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the Uniform Commercial
Code of the State of New York.
Depository Agreement: The agreement among the Trust, the Administrator and
--------------------
The Depository Trust Company, as the initial Depository, dated as of the Closing
Date, relating to the Senior Certificates, substantially in the form attached as
Exhibit D.
Depository Participant: A broker, dealer, bank or other financial
----------------------
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Dissolution Event: With respect to any Subordinated Certificateholder, a
-----------------
Dissolution Event means the withdrawal or expulsion of such Person as General
Partner of the Trust or the termination or dissolution of such Person, or the
occurrence of an Insolvency Event with respect to such Person.
Distribution Date: The fifteenth day of each calendar month during the
-----------------
term of this Agreement, or if such day is not a Business Day, the next
succeeding business day, commencing March 15, 1994.
Eligible Account: A trust account created and maintained in the name of
----------------
the Trust in an Eligible Institution pursuant to Section 5.1.
Eligible Institution: Any depository institution (which may be the Trustee
---------------------
or an Affiliate of the Trustee) organized under the laws of the United States or
any State, the deposits of which are insured to the full extent permitted by law
by the Bank Insurance Fund (currently administered by the Federal Deposit
Insurance Corporation), which is subject to supervision and examination by
federal or state authorities and whose short-term securities or unsecured long-
term debt has been
-3-
<PAGE>
rated P-1 or higher by Moody's in the case of short-term securities, or in one
of the two highest rating categories by Moody's in the case of unsecured long-
term debt.
Eligible Investments: "Eligible Investments" means any of the following:
--------------------
(i) direct obligations of, and obligations fully guaranteed by, the United
States of America, the Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America and which are noncallable;
(ii) (A) demand and time deposits in, certificates of deposit of, bankers'
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Trustee or any Affiliate of the Trustee, acting in
its commercial capacity) incorporated under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, the commercial paper or
other short-term debt obligations of such depository institution or trust
company are rated at least P-1 by Moody's and (B) any other demand or time
deposit or certificate of deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act of
1933 and have the highest credit rating then available from Moody's, and whose
only investments are in securities described in clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any security described in
clause (i) above or (B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case entered into
with any institution whose debt is rated by Moody's in one of its two highest
long-term debt rating categories or whose commercial paper is rated P-1 by
Moody's;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
State thereof which have a credit rating of at least Aa from Moody's at the time
of such investment; provided, however, that securities issued by any particular
-------- -------
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the corpus of the Trust to exceed 10% of
amounts held in the Certificate Account; and
-4-
<PAGE>
(vi) commercial paper having a rating of P-1 from Moody's at the time of
such investment.
The Trustee may trade with itself or an Affiliate in the purchase or sale
of such Eligible Investments.
ERISA: The meaning assigned to such term in Section 3.5(j).
-----
Event of Default: The meaning assigned to such term in Section 9.1.
----------------
Expenses: The meaning assigned to such term in Section 8.2.
--------
Finance I Note: The limited recourse note dated March __, 1994, issued by
-------------- --
Finance I to the Trust pursuant to the Transfer Agreement.
GNMA: Government National Mortgage Association.
----
Green Tree: Green Tree Financial Corporation, a Minnesota corporation, and
----------
its successors in interest.
Insolvency Event: With respect to each of the Subordinated
----------------
Certificateholders, (a) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of such Person or any substantial
part of its property in an involuntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
Interest Rate: ___% per annum, payable monthly at one-twelfth of the
-------------
annual rate (calculated on the basis of a 360-day year of 30-day months).
Minimum Net Worth: At any time of determination, $________.
-----------------
Paying Agent: Any paying agent or co-paying agent appointed pursuant to
------------
Section 3.10, which initially shall be First Trust National Association.
-5-
<PAGE>
Percentage Interest: With respect to any Subordinated Certificate, the
-------------------
percentage evidenced on such Subordinated Certificate. The aggregate Percentage
Interest of all of the Subordinated Certificates shall equal 100%.
Rating Agency: Each of Moody's Investors Service, Inc. ("Moody's") and
-------------
Fitch Investors Service, Inc. ("Fitch"), so long as such rating agencies
maintain a rating on the Senior Certificates; and if either Moody's or Fitch no
longer maintains a rating on the Senior Certificates, such other nationally
recognized statistical rating organization selected by Finance I.
Record Date: With respect to any date, the close of business on the last
-----------
Business Day of the calendar month immediately preceding the month in which such
date occurs.
Related Documents: The Certificates, the Assignment Agreements, the
-----------------
Transfer Agreement, the Finance I Note, the Administration Agreement, the
Security Agreement, the Servicing Agreement, the Depository Agreement, and the
Underwriting Agreement between Green Tree, Finance I and the underwriters of the
Senior Certificates. The Related Documents executed by any party are referred
to herein as "such party's Related Documents," "its Related Documents" or by a
similar expression.
Remaining Amount Available: With respect to any Distribution Date, the
--------------------------
amount remaining in the Certificate Account after payment of the Senior
Certificateholders' Interest Distributable Amount to the holders of the Senior
Certificates and (to the extent not paid by Green Tree or the Subordinated
Certificateholders) payment to the Trustee of any accrued and unpaid trustee
fees, pursuant to Section 5.2.
Responsible Officer: With respect to the Trustee, any officer of the
-------------------
Trustee assigned by the Trustee to administer its corporate trust affairs
relating to the Trust.
Secretary of State: The Secretary of State of the State of Delaware.
------------------
Security Agreement: The Security Agreement, dated as of March __, 1994,
------------------
between Finance I and the Trust.
Senior Certificate: A Securitized Net Interest Margin Certificate executed
------------------
by the Trustee and authenticated by or on behalf of the Trustee, substantially
in the form attached hereto as Exhibit B.
Senior Certificateholder: A Person in whose name a Senior Certificate is
------------------------
registered.
-6-
<PAGE>
Senior Certificateholders' Interest Distributable Amount: With respect to
--------------------------------------------------------
any Distribution Date, other than the Distribution Date occurring in March
1994, one month's interest at the Interest Rate on the outstanding principal
amount of the Senior Certificates (computed on the basis of a 360-day year of
twelve 30-day months), plus any accrued and unpaid interest with respect to a
prior Distribution Date together (to the extent legally permissible) with
interest thereon at the Interest Rate. With respect to the Distribution Date
occurring in March 1994, interest shall accrue from the Closing Date.
Senior Certificateholders' Principal Distributable Amount: With respect to
---------------------------------------------------------
any Distribution Date, the Remaining Amount Available for such Distribution
Date; provided, however, that the Senior Certificateholders' Principal
-------- -------
Distributable Amount shall not exceed the outstanding principal amount of the
Senior Certificates.
Servicer: Green Tree Financial Corporation, in its capacity as Servicer
--------
pursuant to the Servicing Agreement and any successor Servicer appointed
pursuant to such agreement.
Servicing Agreement: The Servicing Agreement, dated as of January 1, 1994,
-------------------
between the Trust and Green Tree, as Servicer, as the same may be amended and
supplemented from time to time.
Subordinated Certificate: A certificate executed by the Trustee [and
------------------------
authenticated by or on behalf of the Trustee] evidencing a fractional undivided
interest in the Trust, substantially in the form attached hereto as Exhibit C.
Subordinated Certificateholder: A Person in whose name a Subordinated
------------------------------
Certificate is registered.
Transfer Agreement: The Transfer Agreement, dated as of January 1, 1994,
------------------
among Finance I, Finance II and the Trust.
Trust: The trust created by this Agreement, the estate of which consists
-----
of the Trust Property.
Trust Property: The property and proceeds of every description conveyed
--------------
pursuant to Section 2.5 hereof and Section 1.01 of the Transfer Agreement,
together with the Certificate Account (including all Eligible Investments
therein and all proceeds therefrom).
Trustee: Wilmington Trust Company, or its successor in interest, acting
-------
not individually but solely as trustee, and any successor trustee appointed as
provided in this Agreement.
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Section 1.2. Usage of Terms. With respect to all terms used in this
--------------
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation." To the extent that definitions are contained in this Agreement, or
in any such certificate or other document, such definitions shall control.
Section 1.3. Calculations. All calculations of the amount of interest
------------
accrued on the Senior Certificates shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
Section 1.4. Section References. All references to Articles, Sections,
------------------
paragraphs, subsections, exhibits and schedules shall be to such portions of
this Agreement unless otherwise specified.
Section 1.5. Action by or Consent of Certificateholders.
------------------------------------------
(a) Except as expressly provided herein, any action that may be taken by
the Certificateholders under this Agreement may be taken by a Certificate
Majority of each of the Senior Certificateholders and the Subordinated
Certificateholders voting separately as a class, unless the action proposed
affects only one class or unless this Agreement provides that the vote with
respect to the matter may be taken by only one class, in which case only the
vote of the affected class shall be required. Except as expressly provided
herein, any written notice or consent by the Senior Certificateholders or of the
Subordinated Certificateholders delivered pursuant to this Agreement shall be
effective for such class if signed by Holders of Senior Certificates or
Subordinated Certificates, as the case may be, evidencing not less than a
Certificate Majority with respect to such class, at the time of the delivery of
such notice.
(b) Whenever any provision of this Agreement refers to action to be taken,
or consented to, by Certificateholders, such provision shall be deemed to refer
to Certificateholders or Certificate Owners (as applicable) of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Certificateholders. Solely for the purposes of any action
to be taken, or consented to, by Senior Certificateholders, any Senior
Certificate registered in the name of Green Tree, Finance I and Finance II or
any Affiliate thereof shall be deemed not to be outstanding and the aggregate
principal balance of such Senior Certificates represented thereby shall not be
taken into account in determining whether the requisite aggregate principal
balance of such Senior Certificates necessary to effect any such action or
consent has been obtained; provided, however,
--------- --------
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<PAGE>
that, solely for the purpose of determining whether the Trustee is entitled to
rely upon any such action or consent, only Senior Certificates which the
Trustee knows to be so owned shall be so disregarded.
ARTICLE II
CREATION OF TRUST
Section 2.1. Creation of Trust. There is hereby formed a trust to be
-----------------
known as "Green Tree Securitized Net Interest Margin Trust, 1994-A," in which
name the Trust may conduct business, make and execute contracts and other
instruments and sue and be sued.
Section 2.2. Office. The office of the Trust shall be in care of the
------
Trustee at the Corporate Trust Office or at such other address in Delaware as
the Trustee may designate by written notice to the Certificateholders and the
Depositor.
Section 2.3. Purposes and Powers. The purpose of the Trust is, and the
-------------------
Trust shall have the power and authority, to engage in the following activities:
(i) to issue the Certificates pursuant to this Agreement and to sell the
Certificates;
(ii) with the proceeds of the sale of the Certificates, to pay the
organizational, start-up and transactional expenses of the Trust, to the extent
not paid by the Depositor or Green Tree, and to pay the balance of such proceeds
to Finance I and Finance II;
(iii) to enter into and perform its obligations under the Related
Documents to which it is to be a party;
(iv) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(v) subject to compliance with the Related Documents, to engage in such
other activities as may be required in connection with conservation of the Trust
Property and the making of distributions to the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or expressly authorized by the terms of this Agreement or
the Related Documents. The Trustee shall not take any action which would vary
the investment of the Certificateholders within the meaning of Treasury
Regulations (S) 301.7701-4(c).
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<PAGE>
Section 2.4. Appointment of Trustee. The Depositor hereby appoints the
----------------------
Trustee as trustee of the Trust effective as of the date hereof, to have all the
rights, powers and duties set forth herein, and the Trustee hereby accepts such
appointment.
Section 2.5. Initial Capital Contribution of Trust Estate. The Depositor
--------------------------------------------
hereby sells, assigns, transfers, conveys and sets over to the Trustee, as of
the date hereof, the sum of $10. The Trustee hereby acknowledges receipt in
trust from the Depositor, as of the date hereof, of the foregoing contribution,
which shall constitute the initial Trust Property and shall be deposited in the
Certificate Account. The Depositor shall pay organizational expenses of the
Trust as they may arise or shall, upon the request of the Trustee, promptly
reimburse the Trustee for any such expenses paid by the Trustee.
Section 2.6. Declaration of Trust. The Trustee hereby declares that it
--------------------
will hold the Trust Property in trust upon and subject to the conditions set
forth herein for the use and benefit of the Certificateholders. It is the
intention and agreement of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is the intention
and agreement of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a partnership, with the Subordinated
Certificateholders as the sole partners thereof. The parties agree that, unless
otherwise required by appropriate tax authorities, the Trust will file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. Effective as of the date hereof, the Trustee shall have all rights,
powers and duties set forth herein and in the Business Trust Statute with
respect to accomplishing the purposes of the Trust.
Section 2.7. Liability of the Certificateholders.
-----------------------------------
(a) Each of Finance I and Finance II shall be liable directly to indemnify
each injured party for all losses, claims, damages, liabilities and expenses of
the Trust, to the extent not paid out of the Trust Property, to the extent that
such Person would be liable if the Trust were a partnership under the Delaware
Uniform Partnership Act and such Person were a general partner; provided,
--------
however, that neither Finance I nor Finance II shall be liable for any losses
- -------
incurred by a Certificate Owner in the capacity of an investor in the Senior
Certificates. In addition, any third party creditors of the Trust (other than
in connection with the obligations described in the proviso to the preceding
sentence for which neither Finance I nor Finance II shall be liable) shall be
deemed third party beneficiaries of this paragraph. The obligations of Finance
I and Finance II under this paragraph shall be evidenced by Subordinated
Certificates as described in Section 3.5(j), which for purposes of the Business
Trust Statute shall be deemed to be a separate class of certificates from the
Senior Certificates.
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<PAGE>
(b) No Certificate Owner, other than to the extent set forth in paragraph
(a), shall have any personal liability for any liability or obligation of the
Trust or by reason of any action taken by the parties to this Agreement pursuant
to any provisions of this Agreement or any Related Document.
Section 2.8. Title to Trust Property.
-----------------------
(a) Legal title to all the Trust Property shall be vested at all times in
the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any part of the
Trust Property. The Certificateholders shall be entitled to receive
distributions only in accordance with Articles V, IX and X. No transfer, by
operation of law or otherwise, of any right, title or interest by any
Certificateholders of its ownership interest in any Certificate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Property.
Section 2.9. Situs of Trust. The Trust will be located and administered
--------------
in the State of Delaware. The Trust shall not have any employees in any state
other than Delaware; provided, however, that nothing herein shall restrict or
-------- -------
prohibit the Trustee, the Depositor or any agent of the Trust from having
employees within or without the State of Delaware.
Section 2.10. Representations and Warranties of Finance I and Finance II.
----------------------------------------------------------
By execution of this Agreement, each of Finance I and Finance II makes the
following representations and warranties with respect to itself on which the
Trustee relies in accepting the Trust Property in trust and issuing the
Certificates.
(a) Organization and Good Standing. It has been duly organized and is
------------------------------
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to conduct its
business as such properties are currently owned and as such business is
currently conducted and is proposed to be conducted pursuant to this Agreement
and the Related Documents.
(b) Due Qualification. It is duly qualified to do business as a foreign
-----------------
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property,
the conduct of its business and the performance of its obligations under this
Agreement and the Related Documents requires such qualification.
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<PAGE>
(c) Power and Authority. It has the power and authority to execute and
-------------------
deliver this Agreement and its Related Documents and to perform its obligations
pursuant thereto; and the execution, delivery and performance of this
Agreement and its Related Documents have been duly authorized by all necessary
corporate action.
(d) No Consent Required. No consent, license, approval or authorization
-------------------
or registration or declaration with, any Person or with any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement and the Related Documents, except for
such as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated by
------------
this Agreement and its Related Documents and the fulfillment of its obligations
under this Agreement and its Related Documents shall not conflict with, result
in any breach of any of the terms and provisions of or constitute (with or
without notice, lapse of time or both) a default under, its Certificate of
Incorporation or By-Laws, or any indenture, agreement, mortgage, deed of trust
or other instrument to which it is a party or by which it is bound, or result in
the creation or imposition of any lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or violate any law, order, rule or regulation applicable to it of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over it or any of its
properties.
(f) No Proceedings. There are no proceedings or investigations pending
--------------
or, to its knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Related Documents, (B) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions contemplated
by this Agreement or any of the Related Documents, (C) seeking any determination
or ruling that might materially and adversely affect its performance of its
obligations under, or the validity or enforceability of, this Agreement or any
of the Related Documents, or (D) seeking to adversely affect the federal income
tax or other federal, state or local tax attributes of the Certificates.
Section 2.11. Federal Income Tax Allocations. Net income of the Trust for
------------------------------
any month as determined for federal income tax purposes (and each item of
income, gain, loss, deduction and credit, if any, entering into the computation
thereof) shall be allocated:
(a) to the Subordinated Certificateholders in equal proportions; and
(b) in the event the Senior Certificateholders are deemed to be partners
of the partnership created hereby, among such Senior Certificateholders as
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<PAGE>
of the first Record Date following the end of such month in proportion to their
ownership of the principal amount of Senior Certificates on such date, in an
amount of such income up to the sum of the Senior Certificateholders' Interest
Distributable Amount for such month, and the balance thereof shall be allocated
to the Subordinated Certificateholders in accordance with clause (a) above. If
the net income in succeeding months of the Trust for any month is insufficient
for the allocations to Senior Certificateholders described in this clause (b),
if applicable, net income shall first be allocated to such Senior
Certificateholders to make up such shortfall before being allocated to
Subordinated Certificateholders as provided above.
Net losses of the Trust, if any, for any month as determined for federal income
tax purposes (and each item of income, gain, loss and deduction entering into
the computation thereof) shall be allocated to the Subordinated
Certificateholders to the extent the Subordinated Certificateholders are
reasonably expected to bear the economic burden of such net losses, then net
losses shall be allocated among the Senior Certificateholders as of the first
Record Date following the end of such month in proportion to their ownership of
principal amount of Senior Certificates on such Record Date. Notwithstanding
anything in this Agreement to the contrary, the Subordinated Certificateholders
shall be allocated an aggregate of at least 1% of each item of income, profit,
gain or loss of the Trust. The Subordinated Certificateholders are authorized
to modify the allocations in this paragraph if necessary or appropriate, in
their sole discretion, for the allocations to fairly reflect the economic
income, gain or loss to the Subordinated Certificateholders or the Senior
Certificateholders, or to comply with the provisions of the Code and the
accompanying Treasury Regulations.
Section 2.12. Covenants of the Subordinated Certificateholders. Each
------------------------------------------------
Subordinated Certificateholder agrees and covenants for the benefit of each
Certificate Owner and the Trustee, during the term of this Agreement, and to the
fullest extent permitted by applicable law, that:
(a) it shall not (i) assign, sell, convey, pledge, transfer, reconvey,
cancel, forgive, compromise or otherwise dispose of any Demand Note held by it,
in whole or in part, (ii) make any distribution other than to the Trust or
unless the aggregate net worth of the Subordinated Certificateholders following
such distribution shall be at least equal to the Minimum Net Worth (for the
purpose of the determination of net worth: (A) any Demand Note held by it shall
be valued at par, (B) the value of the Fee Assets shall be valued as shown on
the most recent servicing report, minus the unpaid balance of the Finance I
Note, (C) the Subordinated Certificates shall be valued at zero and (D)
investments shall be valued at their respective purchase prices plus accrued
interest) or (iii) except as specifically permitted by this Agreement, sell,
transfer, assign, give or encumber by operation of law or otherwise any of its
assets;
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<PAGE>
(b) it shall not sell, assign, transfer, give or encumber, by operation of
law or otherwise, in whole or in part, at least fifty-one percent (51%) of the
interest evidenced by the Subordinated Certificates;
(c) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its Certificate of
Incorporation and the Related Documents;
(d) it shall not, for any reason, institute proceedings for the Trust to
be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(e) it shall obtain from each counterparty to each Related Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
10.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States;
(f) it shall not for any reason, withdraw or attempt to withdraw from this
Agreement, dissolve, institute proceedings for it to be adjudicated a bankrupt
or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
Section 2.13. Covenants of the Certificate Owners. Each Certificate Owner
-----------------------------------
by becoming a beneficial owner of a Book-Entry Certificate agrees:
(a) to be bound by the terms and conditions of the Senior Certificates of
which such Certificate Owner is the beneficial owner and of this Agreement,
including any supplements or amendments hereto and to perform the obligations of
a Certificate Owner as set forth therein or herein, in all respects as if it
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<PAGE>
were a signatory hereto. This undertaking is made for the benefit of the Trust,
the Trustee and all other Certificate Owners present and future.
(b) to treat the Senior Certificates as debt of the Trust for all tax
purposes and to not take any position inconsistent with such treatment in any
tax returns filed by such Certificate Owner.
(c) until the completion of the events specified in Section 10.1(c), not
to, for any reason, institute proceedings for the Trust or a Subordinated
Certificateholder to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part of its property, or cause or permit
the Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
ARTICLE III
THE CERTIFICATES
Section 3.1. Initial Ownership. Upon the formation of the Trust by the
-----------------
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Certificates, the Depositor shall be the sole beneficiary of the Trust.
Section 3.2 Conditions to Issuance of the Certificates. On the
------------------------------------------
Closing Date, Finance I and/or Finance II shall deliver or cause to be delivered
the following documents to the Trustee:
a. An executed copy of the Transfer Agreement, dated as of January 1,
1994, among Finance I, Finance II and the Trust (substantially in the
form attached hereto as Exhibit E).
b. The executed copy of the Finance I Note, dated as of March __, 1994,
issued by Finance I to the Trust (substantially in the form attached
hereto as Exhibit F).
c. An executed copy of the Security Agreement, dated as of March __, 1994,
between Finance I and the Trust (substantially in the form attached
hereto as Exhibit G).
d. An executed copy of the Servicing Agreement, dated as of January 1,
1994, between Green Tree and the Trust (substantially in the form
attached hereto as Exhibit H).
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<PAGE>
Section 3.3. The Certificates. Senior Certificates, in an aggregate
----------------
principal amount of $[ ], shall be issued in denominations of
$1,000 initial principal amount and integral multiples thereof. One
Subordinated Certificate shall be issued to each of Finance I and Finance II
in denominations equal to a Percentage Interest of 50%, with an aggregate
Percentage Interest of 100%. The Certificates shall be executed on behalf of
the Trustee by manual or facsimile signature of any authorized signatory of
the Trustee having such authority under the Trustee's seal imprinted or
otherwise affixed thereon and attested on behalf of the Trustee by the manual
or facsimile signature of any authorized signatory of the Trustee.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trustee shall be valid and binding obligations of the Trust,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates.
Section 3.4. Unconditional Rights of Senior Certificateholders to Receive
------------------------------------------------------------
Principal and Interest. Notwithstanding any other provisions in this Agreement,
- ----------------------
the holder of any Senior Certificate shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such
Senior Certificate on or before the Distribution Date occurring in February
2004; provided, however, that no provisions contained herein shall restrict the
-------- -------
right of the Trust to pay the Senior Certificates in full, prior to their
Maturity Date.
Section 3.5. Authentication of Certificates. Simultaneously with the
------------------------------
sale, assignment and transfer to the Trust of the Residual Assets and the
delivery to the Trustee of the Finance I Note and the other Trust Property
pursuant to the Transfer Agreement, the Trustee shall cause to be executed on
behalf of the Trust, authenticated and delivered to or upon the order of the
Depositor, Senior Certificates in authorized denominations equaling in the
aggregate (approximate) $[ ] and Subordinated Certificates with
an aggregate Percentage Interest of 100%. No Certificate shall entitle its
holder to any benefit under this Agreement, or shall be valid for any purpose,
unless there shall appear on such Certificate a certificate of authentication
substantially in the form set forth in (i) Exhibit B in the case of a Senior
Certificate or (ii) Exhibit C in the case of a Subordinated Certificate,
executed by the Trustee or the Authentication Agent, by manual or facsimile
signature; such authentication shall constitute conclusive evidence that such
Certificate shall have been duly authenticated and delivered hereunder. First
Trust National Association is hereby initially appointed Authentication Agent.
All Certificates shall be dated the date of their authentication.
Section 3.6. Registration of Transfer and Exchange of Senior Certificates.
------------------------------------------------------------
(a) The Certificate Registrar shall maintain, or cause to be maintained,
at the office or agency maintained pursuant to Section 3.10, a Certificate
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<PAGE>
Register in which, subject to such reasonable regulations as it may prescribe,
the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as provided in this Agreement. First Trust
National Association is hereby initially appointed Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of
Certificates as provided in this Agreement.
(b) Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.10, the Trustee shall execute,
authenticate and deliver (or shall cause the Authentication Agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
class and aggregate principal amount, or Percentage Interest, with respect to
the Subordinated Certificates, dated the date of authentication by the Trustee
or any authenticating agent. At the option of a Holder, Certificates may be
exchanged for other Certificates of the same class in authorized denominations
of a like aggregate principal amount upon surrender of the Certificates to be
exchanged at the office or agency maintained pursuant to Section 3.10.
(c) All Certificates issued upon any registration of transfer or exchange
of Certificates shall be the valid obligations of the Trust, entitled to the
same benefits under this Agreement, as the Certificates surrendered upon such
registration of transfer or exchange.
(d) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Certificate Registrar duly executed by
the Holder or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by the Trustee in accordance with its customary
practice.
(e) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(f) Except as provided in paragraph (g) and (i) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Book-Entry
Certificates may not be transferred by the Trustee except to a successor
depository designated pursuant to paragraph (g) below; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Senior Certificates; (iii) ownership
and transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the
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<PAGE>
Trustee shall deal with the Depository, Depository Participants and indirect
participating firms as representatives of the Certificate Owners for purposes
of exercising the rights of Holders under this Agreement (and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners);
and (vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
(g) If the Depository advises the Trustee in writing that the Depository
is no longer willing or able properly to discharge its duties as Depository, the
Trustee shall so notify the Depository and demand the return of all Senior
Certificates held by the Depository. The Certificate Registrar shall thereupon
register the transfer of such Senior Certificates to a successor Depository
named by the Depositor and acceptable to the Depositor and the Trustee.
(h) If,
(x) (i) the Administrator, the Depositor or the Depository advises the
Trustee in writing that the Depository is no longer willing or able properly to
discharge its responsibilities as Depository, and (ii) the Administrator or the
Depositor is unable to locate a qualified successor,
(y) the Depositor at its sole option advises the Trustee in writing that
it elects to terminate the book-entry system through the Depository, or
(z) an Event of Default shall have occurred and be continuing, Senior
Certificate Owners having a beneficial interest in the Senior Certificates at
least equal to a Certificate Majority advise the Trustee through the Depository
that the continuation of a book-entry system is no longer in the best interests
of the Certificate Owners,
the Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of definitive, fully
registered Senior Certificates (the "Definitive Certificates") to Senior
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Senior Certificates by the Depository, accompanied by registration instructions
from the Depository for registration or transfer, the Trustee shall issue the
Definitive Certificates in accordance with such instructions. Neither the
Certificate Registrar nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Finance I shall pay all expenses incurred in
connection with the notification of Senior Certificate Owners and the issuance
of Definitive Certificates hereunder. Upon the issuance of Definitive
Certificates the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
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<PAGE>
(i) On or prior to the Closing Date, there shall be delivered by or on
behalf of the Trust to the Depository four typewritten Senior Certificates
registered in the name of the Depository's nominee, Cede & Co., three such
Senior Certificates evidencing $150,000,000 of principal amount each, and the
fourth such Senior Certificate evidencing $[ ] of original principal
amount. The total face amount of such Senior Certificates shall represent 100%
of the aggregate principal amount of the Senior Certificates as of the Cut-off
Date. Each such Senior Certificate registered in the name of the Depository's
nominee shall bear the following legend:
"Unless this Senior Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the Trustee or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede &
Co. or in such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein."
(j) On the Closing Date, Finance I and Finance II shall receive for
adequate consideration and thereafter shall retain beneficial and record
ownership of the Subordinated Certificates, which Subordinated Certificates
shall be issued in definitive form.
(k) The Certificates may not be acquired by a "disqualified organization"
(as defined below). By acceptance of a Certificate, the Holder thereof shall be
deemed to have represented and warranted that it is not a disqualified
organization. Any attempted or purported transfer in violation of these
transfer restrictions will be null and void and will vest no rights in any
purported transferee. A "disqualified organization" means (i) the United
States, any State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of the foregoing
(not including instrumentalities described in Section 168(h)(2)(D) of the Code
or the Federal Home Loan Mortgage Corporation), (ii) any organization (other
than a cooperative described in Section 521 of the Code) that is exempt from
federal income tax, unless it is subject to the tax imposed by Section 511 of
the Code or (iii) any organization described in Section 1381(a)(2)(C) of the
Code.
Section 3.7. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
-------------------------------------------------
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (b) there is delivered to the Certificate
Registrar and the Trustee such security or indemnity as may be required by them
to save each of them harmless,
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then, in the absence of notice to the Certificate Registrar or the Trustee
that such Certificate has been acquired by a bona fide purchaser, the Trustee
on behalf of the Trust shall execute, authenticate and deliver (or the
Authentication Agent shall authenticate and deliver), in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and portion of the aggregate principal balance of
the Certificates. In connection with the issuance of any new Certificate under
this Section 3.7, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and the Certificate Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section 3.7 shall constitute conclusive evidence of
ownership, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 3.8. Persons Deemed Certificate Owners. Prior to due presentation
---------------------------------
of a Certificate for registration of transfer, the Trustee or the Certificate
Registrar and any agent of the Trustee or the Certificate Registrar may treat
the person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 5.2
and for all other purposes whatsoever, and neither the Trustee nor the
Certificate Registrar nor any agent of the Trustee nor the Certificate Registrar
shall be affected by any notice to the contrary.
Section 3.9. Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
The Trustee shall furnish or cause to be furnished to the Depositor within 15
days after receipt by the Trustee of a written request therefor from such party,
a list, in such form as such party may reasonably require, of the names and
addresses of the Senior Certificateholders as of the most recent Record Date for
payment of distributions to Senior Certificateholders. If Definitive
Certificates have been issued and three or more Senior Certificateholders, or
one or more Senior Certificateholders evidencing not less than 25% of the
aggregate principal balance of the Senior Certificates (hereinafter referred to
as "Applicants"), apply in writing to the Trustee, and such application states
that the Applicants desire to communicate with other Senior Certificateholders
with respect to their rights under this Agreement or under the Senior
Certificates and is accompanied by a copy of the communication that such
Applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such Applicants access,
during normal business hours, to the current list of Senior Certificateholders.
Every Senior Certificateholder, by receiving and holding a Senior Certificate,
agrees that neither the Depositor nor the Trustee, nor any agent thereof, shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Senior Certificateholders under this Agreement,
regardless of the source from which such information was derived.
Section 3.10. Maintenance of Office or Agency. The Trustee shall maintain
-------------------------------
in Wilmington, Delaware or Minneapolis or St. Paul, Minnesota an office
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or offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Trustee in respect of the Certificates and the Related Documents may be
served. The Trustee initially designates First Trust National Association, 180
East Fifth Street, St. Paul, Minnesota 55101, as its principal agency for such
purposes. The Trustee shall give prompt written notice to the Depositor and to
the Certificateholders of any change in the location of the Certificate
Register or any such office of agency.
Section 3.11. Appointment of Paying Agent. The Paying Agent shall make
---------------------------
distributions to Certificateholders from the Certificate Account pursuant to
Section 5.2 and shall report the amounts of such distributions to the Trustee.
Any Paying Agent shall have the revocable power to withdraw funds from the
Certificate Account for the purpose of making the distributions referred to
above. The Trustee may revoke such power and remove the Paying Agent if the
Trustee determines in its sole discretion that the Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Paying Agent shall initially be First Trust National Association, with an
office at 180 East 5th Street, Second Floor, St. Paul, Minnesota 55101,
Attention: Corporate Trust Operations. First Trust National Association shall
be permitted to resign as Paying Agent upon 30 days' written notice to the
Trustee. In the event that First Trust National Association shall no longer be
the Paying Agent, the Trustee shall appoint a successor to act as Paying Agent
(which shall be a bank or trust company). The Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Trustee
to execute and deliver to the Trustee an instrument in which such successor
Paying Agent or additional Paying Agent shall agree with the Trustee that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Certificateholders in trust for
the benefit of the Certificateholders entitled thereto until such sums shall be
paid to such Certificateholders. The Paying Agent shall return all unclaimed
funds to the Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Trustee. The provisions of
Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Trustee also in its role as
Paying Agent, for so long as the Trustee shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
ARTICLE IV
ACTIONS BY TRUSTEE
Section 4.1. Restriction on Power of Certificate Owners. No Certificate
------------------------------------------
Owner shall have any right to vote or in any manner otherwise control the
operation and management of the Trust except as expressly provided in this
Agreement.
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Section 4.2. Action by Subordinated Certificateholders with Respect to
---------------------------------------------------------
Bankruptcy. The Trustee shall not have the power to commence a voluntary
- ----------
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Subordinated Certificateholders and the delivery to the
Trustee by each such Subordinated Certificateholder of a certificate
certifying that such Subordinated Certificateholder reasonably believes that
the Trust is insolvent.
Section 4.3. Restrictions on Certificate Owners' Power. No Certificate
-----------------------------------------
Owner shall have any right by virtue or by availing itself of any provisions of
this Agreement to institute any suit, action, or proceeding in equity or at law
upon or under or with respect to this Agreement or any Related Document, unless
a Certificate Owner previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as provided in this Agreement and
unless also Certificate Owners beneficially owning not less than 25% of the
aggregate principal balance of the Senior Certificates shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee under this Agreement and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 30 days
after its receipt of such notice, request, and offer of indemnity, shall have
neglected or refused to institute any such action, suit, or proceeding and
during such 30-day period, no request or waiver inconsistent with such written
request has been given to the Trustee pursuant to and in compliance with this
Section or Section 6.2; it being understood and intended, and being expressly
covenanted by each Certificate Owner with every other Certificate Owner and the
Trustee, that no one or more Certificate Owner shall have any right in any
manner whatever by virtue or by availing itself or themselves of any provisions
of this Agreement to affect, disturb, or prejudice the rights of any other
Certificate Owner, or to obtain or seek to obtain priority over or preference to
any other such Certificate Owner, or to enforce any right under this Agreement,
except in the manner provided in this Agreement and for the equal, ratable, and
common benefit of all Certificate Owners. For the protection and enforcement of
the provisions of this Section 4.3, each and every other Certificate Owner and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1. Certificate Account.
-------------------
(a) The Trustee, for the benefit of the Certificateholders, shall
establish and maintain the Certificate Account in the name of the Trust for the
benefit of the Certificateholders. The Certificate Account shall be an Eligible
Account and initially shall be a segregated Certificate Account established with
the Administrator. Provided, however, that the Trustee and the Administrator
-------- -------
hereby agree to establish the Certificate Account at the same Eligible
Institution where the
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certificate accounts with respect to the Securitized Pools and the custodial
account with respect to the GNMA Pools are currently established. Provided,
--------
further, if the certificate accounts with respect to the Securitized Pools are
- -------
transferred to new certificate accounts at another Eligible Institution, the
Trustee and the Administrator hereby agree to transfer the Certificate Account
to the same Eligible Institution.
(b) The Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Certificate Account and in all proceeds
thereof. If, at any time, the Certificate Account ceases to be an Eligible
Account, the Trustee shall within five Business Days (or such longer period, not
to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Certificate Account as an Eligible Account and shall transfer
any cash and/or any investments to such new Certificate Account.
(c) All amounts held in the Certificate Account shall, to the extent
permitted by applicable laws, rules and regulations, be invested, by the
Trustee, in Eligible Investments that mature not later than one Business Day
prior to the Distribution Date to which such amounts relate. Investments in
Eligible Investments shall be made in the name of the Trust, and such
investments shall not be sold or disposed of prior to their maturity. Any
investment of funds in the Certificate Account shall be made in Eligible
Investments held by a financial institution with respect to which (a) such
institution has noted the Trustee's interest therein by book entry or otherwise
and (b) a confirmation of the Trustee's interest has been sent to the Trustee by
such institution, provided that such Eligible Investments are (i) specific
certificated securities, and (ii) either (A) in the possession of such
institution or (B) in the possession of a clearing corporation in New York or
Delaware, registered in the name of such clearing corporation, not endorsed for
collection or surrender or any other purpose not involving transfer, not
containing any evidence of a right or interest inconsistent with the Trustee's
security interest therein, and held by such clearing corporation in an account
of such institution. Subject to the other provisions hereof, the Trustee shall
have sole control over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment, if any, shall be
delivered directly to the Trustee or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to the Trustee
in a manner which complies with this Section 5.1. All interest, dividends,
gains upon sale and other income from, or earnings on investment of funds in the
Certificate Account shall be distributed on the next Distribution Date pursuant
to Section 5.2. The Subordinated Certificateholders shall deposit in the
Certificate Account an amount equal to any net loss on such investments
immediately as realized.
Section 5.2. Distribution of Funds in Certificate Account.
--------------------------------------------
(a) On each Distribution Date, other the Distribution Date occurring in
March 1994, the Trustee will, based on the information contained in the Monthly
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Report delivered on the related Determination Date pursuant to Section 1.01 of
the Servicing Agreement, cause to be distributed all funds in the Certificate
Account to Certificateholders, to the extent of the Amount Available, in the
following order of priority; provided, however, that with respect to the
-------- -------
Distribution Date occurring in March 1994, the Trustee will cause to be
distributed to the Subordinated Certificateholders, after payments made
pursuant to Section 5.2(a)(i) and (ii) below, an amount equal to the amount of
interest that would have accrued on the original principal amount of the
Certificates at the Interest Rate from January 15 to the Closing Date;
provided, further, that after the Distribution Date occurring in March 1994,
- -------- -------
no amounts deposited in the Certificate Account shall be allocable or paid to
the Subordinated Certificateholders until the Senior Certificates have been
paid in full:
(i) first, from the Amount Available, to the Senior Certificateholders, on
a pro rata basis, an amount equal to the Senior Certificateholders' Interest
Distributable Amount; provided, however, that if the Amount Available is
-------- -------
insufficient to pay the full amount of the Senior Certificateholders' Interest
Distributable Amount, any amounts so distributed on such Distribution Date will
be deemed applied first to any accrued but unpaid interest from prior
Distribution Dates, and next to the interest accrued for such Distribution Date;
(ii) second, to the Trustee, an amount equal to the expenses and fees of
the Trustee for such period (to the extent not paid by Green Tree or the
Subordinated Certificateholders);
(iii) third, to the Senior Certificateholders, on a pro rata basis, an
amount equal to the Senior Certificateholders' Principal Distributable Amount;
and
(iv) fourth, following payment in full of the Senior Certificates to the
Subordinated Certificateholders according to their Percentage Interests.
(b) On the Distribution Date following the date on which the Subordinated
Certificateholders have exercised their option to cause the Trust to prepay the
Senior Certificates pursuant to Section 5.6 hereof, the Trustee will distribute
all amounts on deposit in the Certificate Account as follows, taking into
account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to the Senior Certificateholders, on a pro rata basis, an
amount equal to the Senior Certificateholders' Interest Distributable Amount;
(ii) second, to the Trustee, an amount equal to the expenses and fees of
the Trustee for such period (to the extent not paid by Green Tree or the
Subordinated Certificateholders);
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(iii) third, to the Senior Certificateholders, on a pro rata basis, the
outstanding principal balance on the Senior Certificates; and
(iv) fourth, to the Subordinated Certificateholders, according to their
Percentage Interests.
(c) On the Distribution Date on which Insolvency Proceeds (as defined
herein) are deposited in the Certificate Account pursuant to Section 10.2 (or on
the Distribution Date immediately following such deposit if such proceeds are
not deposited in the Certificate Account on a Distribution Date), the Trustee
will distribute the Insolvency Proceeds so deposited in the Certificate Account,
taking into account any concurrent distribution made pursuant to Section 5.2(a)
or 5.2(b):
(i) first, to the Senior Certificateholders, on a pro rata basis, an
amount equal to the Senior Certificateholders' Interest Distributable Amount;
(ii) second, to the Trustee, an amount equal to the expenses and fees of
the Trustee for such period (to the extent not paid by Green Tree or the
Subordinated Certificateholders,
(iii) third, to the Senior Certificateholders, on a pro rata basis, the
outstanding principal balance on the Senior Certificates; and
(iv) fourth, to the Subordinated Certificateholders, according to their
Percentage Interests.
(d) On each Distribution Date, the Trustee shall forward or cause to be
forwarded by mail to each holder of a Senior Certificate and (if Green Tree is
not the Servicer) Green Tree, the Monthly Report prepared by the Servicer
pursuant to the Servicing Agreement, attached hereto as Exhibit H.
The Trustee and the Servicer shall inform any Certificateholder, Lehman
Brothers, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated inquiring
by telephone of the information contained in the most recent Monthly Report.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Senior Certificate a statement
containing the information with respect to interest accrued and principal paid
on such Holder's Certificates during such calendar year. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in force.
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(e) Copies of all reports provided to the Trustee and the Administrator
for the Certificateholders shall also be provided to each Rating Agency and to
the Subordinated Certificateholders.
(f) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificate Owner, such tax shall reduce
the amount otherwise distributable to the Certificate Owner in accordance with
this Section. The Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the Certificate Owners sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to a Certificate Owner shall be treated as cash distributed to such
Certificate Owner at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificate Owner), the Trustee may in its sole discretion withhold such amounts
in accordance with this paragraph (e). In the event that a Certificate Owner
wishes to apply for a refund of any such withholding tax, the Trustee shall
reasonably cooperate with such Certificate Owner in making such claim so long as
such Certificate Owner agrees to reimburse the Trustee for any out-of-pocket
expenses incurred.
Section 5.3. Method of Payment. Distributions required to be made to
-----------------
Certificateholders on any Distribution Date shall be made to each
Certificateholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Distribution Date
and such Holder's Certificates in the aggregate evidence a denomination of not
less than $1,000,000 (or if such Certificateholder is a Depositor or an
Affiliate thereof), or, if not, by check mailed to such Certificateholder at the
address of such holder appearing in the Certificate Register.
Section 5.4. No Segregation of Monies; No Interest. Subject to Sections
-------------------------------------
5.1 and 5.2, monies received by the Trustee hereunder need not be segregated in
any manner except to the extent required by law and may be deposited under such
general conditions as may be prescribed by law, and the Trustee shall not be
liable for any interest thereon.
Section 5.5. Accounting; Reports; Tax Returns.
--------------------------------
(a) The Administrator has agreed pursuant to the Administration Agreement
that the Administrator shall (i) maintain (or cause to be maintained) the books
of the Trust on a calendar year basis on the accrual method of accounting, (ii)
deliver to each Certificateholder, as may be required by the Code and applicable
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Treasury Regulations, such information as may be required, including Schedule K-
1 with respect to each Subordinated Certificateholder, or Form 1099, with
respect to each Senior Certificateholder, to enable each Certificate Holder to
prepare its federal and state income tax returns, (iii) file or cause to be
filed such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Trustee to make such elections
as may from time to time be required or appropriate under any applicable state
or federal statute or rule or regulation thereunder so as to maintain the
Trust's characterization as a partnership for federal income tax purposes,
(iv) collect or cause to be collected any withholding tax as described in and
in accordance with Section 5.2(e) with respect to income or distributions to
Certificate Owners and (v) file or cause to be filed all documents required to
be filed by the Trust with the Commission and otherwise take or cause to be
taken all such actions as are notified by the Servicer to the Administrator as
being required for the Trust's compliance with all applicable provisions of
state and federal securities laws.
(b) The Trustee shall make all elections pursuant to this Section 5.5 as
directed in writing by the Subordinated Certificateholders. Finance I shall be
the "tax matters partner" of the Trust pursuant to the Code.
(c) The Trustee shall sign on behalf of the Trust the tax returns of the
Trust presented to it in final execution form by the Administrator, unless
applicable law requires a Certificateholder to sign such documents, in which
case such documents shall be signed by Finance I. In signing any tax return of
the Trust, the Trustee shall rely entirely upon, and shall have no liability
for, information or calculations provided by Finance I.
Section 5.6. Prepayment of Senior Certificates; Final Payment on Senior
----------------------------------------------------------
Certificates.
- ------------
(a) On any Distribution Date when the aggregate outstanding principal
amount of the Certificates is less than $[ ], the Subordinated
Certificateholders may cause the Trust to prepay the Senior Certificates in
whole and not in part, by depositing cash in the Certificate Account, no later
than ___ Business Days prior to such Distribution Date, in an amount equal to
the aggregate outstanding principal amount of the Senior Certificates plus all
accrued and unpaid interest thereon.
(b) The Subordinated Certificateholders must notify the Trustee and the
Administrator at least 30 days but no more than 60 days prior to such redemption
date of their intention to cause redemption of the Senior Certificates.
(c) Within five Business Days of receipt of notice of final payment on the
Senior Certificates from the Administrator (whether pursuant to the exercise by
the Subordinated Certificateholders of their option contained in this Section
5.6, or pursuant to payment of the Senior Certificateholders Principal
Distributable Amount), the Trustee shall mail written notice to the Senior
Certificateholders
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specifying (i) the Distribution Date upon which final payment of the Senior
Certificates shall be made upon presentation and surrender of the Senior
Certificates at the office of the Paying Agent therein specified, (ii) the
amount of any such final payment, and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Senior Certificates at the office
of the Paying Agent therein specified. The Trustee shall give such notice to
the Certificate Registrar at the time such notice is given to Senior
Certificateholders. Upon presentation and surrender of the Senior
Certificates, the Paying Agent shall cause to be distributed to Senior
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.2.
(d) In the event that all of the Senior Certificateholders shall not
surrender their Senior Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Senior Certificateholders to surrender
their Senior Certificates for cancellation and receive the final distribution
with respect thereto. If within one year after the second notice all the Senior
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Senior Certificateholders concerning surrender of their
Senior Certificates, and the cost thereof shall be paid out of the funds and
other assets that remain subject to this Agreement. Any funds which are payable
to Senior Certificateholders remaining in the Trust after exhaustion of such
remedies shall be distributed by the Trustee to The United Way (but only upon
termination of this Agreement) and the Senior Certificateholders, by acceptance
of their Senior Certificates, hereby waive any rights with respect to such
funds.
ARTICLE VI
AUTHORITY AND DUTIES OF TRUSTEE
Section 6.1. General Authority. The Trustee is authorized and directed to
-----------------
execute and deliver the Related Documents to which the Trust is to be a party
and each certificate or other document attached as an exhibit to or contemplated
by the Related Documents to which the Trust is to be a party and any amendment
thereto. In addition to the foregoing, the Trustee is authorized, but shall not
be obligated, to take all actions required of the Trust pursuant to the Related
Documents. The Trustee is further authorized to enter into the Administration
Agreement, to appoint, with the consent of Finance I and Finance II, a successor
Administrator and to take from time to time such action as Finance I and Finance
II recommend with respect to the Related Documents so long as such actions are
consistent with the terms of the Related Documents.
Section 6.2. General Duties. It shall be the duty of the Trustee to
--------------
discharge (or cause to be discharged through the Administrator or such agents as
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shall be appointed with the consent of Finance I and Finance II) all of its
responsibilities pursuant to the terms of this Agreement and to administer the
Trust in the interest of the Certificateholders, subject to the Related
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Trustee shall be deemed to have discharged
its duties and responsibilities hereunder to the extent the Administrator has
agreed in the Administration Agreement to perform any act or to discharge any
duty of the Trustee hereunder or under any Related Document, and the Trustee
shall not be liable for the default or failure of the Administrator to carry
out its obligations under the Administration Agreement. No implied covenants
or obligations shall be read into this Agreement against the Trustee.
Section 6.3. Action upon Instruction.
-----------------------
(a) Subject to Article IV, Finance I and Finance II shall have the
exclusive right to direct the actions of the Trustee in the management of the
Trust, so long as such instructions are not inconsistent with the express terms
set forth herein or in any Related Document. The Subordinated
Certificateholders shall not instruct the Trustee in a manner inconsistent with
this Agreement or the Related Documents.
(b) The Trustee shall not be required to take any action hereunder or
under any Related Document if the Trustee shall have reasonably determined, or
shall have been advised by counsel, that such action is contrary to the terms
hereof or of any Related Document or is otherwise contrary to law.
(c) Whenever the Trustee is unable to decide between alternative courses
of action permitted or required by the terms of this Agreement or any Related
Document, the Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Subordinated Certificateholders
requesting instruction as to the course of action to be adopted, and to the
extent the Trustee acts in good faith in accordance with any written instruction
received from the Subordinated Certificateholders, the Trustee shall not be
liable on account of such action to any Person. If the Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
Related Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Trustee is unsure as to the application of any
provision of this Agreement or any Related Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Trustee or is silent or is incomplete as to the course of
action
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that the Trustee is required to take with respect to a particular set of
facts, the Trustee may give notice (in such form as shall be appropriate under
the circumstances) to the Subordinated Certificateholders requesting instruction
and, to the extent that the Trustee acts or refrains from acting in good faith
in accordance with any such instruction received, the Trustee shall not be
liable, on account of such action or inaction, to any Person. If the Trustee
shall not have received appropriate instruction within 10 days of such notice
(or within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be under
no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Related Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
Section 6.4. No Duties Except as Specified in this Agreement or in
-----------------------------------------------------
Instructions. The Trustee shall not have any duty or obligation to manage, make
- ------------
any payment with respect to, register, record, sell, dispose of, or otherwise
deal with the Trust Property, or to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated hereby to which
the Trustee is a party, except as expressly provided by the terms of this
Agreement (including as provided in Section 6.2) or in any written instruction
received by the Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Related Document against
the Trustee.
Section 6.5. No Action Except under Specified Documents or Instructions.
----------------------------------------------------------
The Trustee shall not manage, control, use, sell, dispose of or otherwise deal
with any part of, the Trust Property except (i) in accordance with the powers
granted to and the authority conferred upon the Trustee pursuant to this
Agreement, (ii) in accordance with the Related Documents and (iii) in accordance
with any document or instruction delivered to the Trustee pursuant to Section
6.3.
Section 6.6. Restrictions. The Trustee shall not take any action (a) that
------------
is inconsistent with the purposes of the Trust set forth in Section 2.3 or (b)
that, to the actual knowledge of the Trustee, would result in the Trust's
becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Trustee to take action that would
violate the provisions of this Section.
Section 6.7 Administration Agreement.
------------------------
(a) The Administrator is authorized to execute on behalf of the Trust all
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust to prepare, file or deliver pursuant to the Related
Documents. Upon written request, the Trustee shall execute and deliver to the
Administrator a power of attorney appointing the Administrator its agent and
attorney-in-fact to execute all such documents, reports, filings, instruments,
certificates and opinions.
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(b) If the Administrator shall resign or be removed pursuant to the terms
of the Administration Agreement, the Trustee may, and is hereby authorized and
empowered to, subject to obtaining the prior written consent of Finance I and
Finance II, appoint or consent to the appointment of a successor Administrator
pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Trustee may, and is
hereby authorized and empowered to, subject to obtaining the prior written
consent of Finance I and Finance II, appoint or consent to the appointment of a
Person to perform substantially the same duties as are assigned to the
Administrator in the Administration Agreement pursuant to an agreement
containing substantially the same provisions as are contained in the
Administration Agreement.
(d) The Trustee shall promptly notify each Subordinated Certificateholder
of any default by or misconduct of the Administrator under the Administration
Agreement of which the Trustee has received written notice or of which a
Responsible Officer has actual knowledge.
ARTICLE VII
CONCERNING THE TRUSTEE
Section 7.1. Acceptance of Trust and Duties. The Trustee accepts the
------------------------------
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Trustee also agrees
to disburse all moneys actually received by it constituting part of the Trust
Property upon the terms of the Related Documents and this Agreement. The
Trustee shall not be answerable or accountable hereunder or under any Related
Document under any circumstances, except (i) for its own willful misconduct or
gross negligence, (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3, (iii) for any investments made by the Trustee
with any branch or affiliate thereof in its commercial capacity or (iv) for
taxes, fees or other charges on, based on or measured by, any fees, commissions
or compensation received by the Trustee in connection with any of the
transactions contemplated by this Agreement or any Related Document. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Trustee;
(b) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the instructions of
the Subordinated Certificateholders;
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(c) no provision of this Agreement or any Related Document shall require
the Trustee to expend or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any Related
Document if the Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Trustee be liable for indebtedness
evidenced by or arising under any of the Related Documents;
(e) the Trustee shall not be responsible for or in respect of the validity
or sufficiency of this Agreement or for the due execution hereof by the
Depositor or the Subordinated Certificateholders or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Property or for
or in respect of the validity or sufficiency of the Related Documents, other
than the certificate of authentication on the Certificates, and the Trustee
shall in no event assume or incur any liability, duty, or obligation to Finance
I, Finance II or to any Certificate Owner, other than as expressly provided for
herein and in the Related Documents;
(f) the Trustee shall not be liable for the default or misconduct of the
Administrator, Finance I, Finance II, Green Tree or the Servicer under any of
the Related Documents or otherwise and the Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Agreement or the
Related Documents that are required to be performed by the Administrator under
the Administration Agreement, by Finance I and Finance II under the Transfer
Agreements or by the Servicer under the Servicing Agreement; and
(g) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement, or to institute, conduct or defend any
litigation under this Agreement or otherwise or in relation to this Agreement or
any Related Document, at the request, order or direction of the Subordinated
Certificateholders, unless the Subordinated Certificateholders have offered to
the Trustee security or indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Trustee therein or thereby. The
right of the Trustee to perform any discretionary act enumerated in this
Agreement or in any Related Document shall not be construed as a duty, and the
Trustee shall not be answerable for other than its gross negligence or willful
misconduct in the performance of any such act.
Section 7.2. Furnishing of Documents. The Trustee shall furnish to the
-----------------------
Certificate Owners promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Trustee under
the Related Documents, unless the Senior Certificate Owners have previously
received such items.
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Section 7.3. Representations and Warranties. The Trustee hereby
------------------------------
represents and warrants to the Depositor, Finance I, Finance II and the
Certificate Owners that:
(a) It is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware. It has all requisite
corporate power and authority and all franchises, grants, authorizations,
consents, orders and approvals from all governmental authorities necessary to
execute, deliver and perform its obligations under this Agreement and each
Related Document to which the Trustee is a party.
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Agreement and each Related Document to which the
Trustee is a party, and this Agreement and each Related Document will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby nor compliance by
it with any of the terms or provisions hereof will contravene any Federal or
Delaware law, governmental rule or regulation governing the banking or trust
powers of the Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture, mortgage,
contract, agreement or instrument to which it is a party or by which any of its
properties may be bound or result in the creation or imposition of any lien,
charge or encumbrance on the Trust Property resulting from actions by or claims
against the Trustee individually which are unrelated to this Agreement or the
Related Documents.
Section 7.4. Reliance; Advice of Counsel.
---------------------------
(a) The Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Trustee may
accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which
is not specifically prescribed herein, the Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Related
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Documents, the Trustee (i) may act directly or through its agents or attorneys
pursuant to agreements entered into with any of them, and the Trustee shall not
be liable for the conduct or misconduct of such agents or attorneys if such
agents or attorneys shall have been selected by the Trustee with reasonable
care, and (ii) may consult with counsel, accountants and other skilled persons
to be selected with reasonable care and employed by it. The Trustee shall not
be liable for anything done, suffered or omitted in good faith by it in
accordance with the written opinion or advice of any such counsel, accountants
or other such persons and not contrary to this Agreement or any Related
Document.
Section 7.5. Not Acting in Individual Capacity. Except as provided in
---------------------------------
this Article VII, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Trustee by reason of the transactions
contemplated by this Agreement or any Related Document shall look only to the
Trust Property for payment or satisfaction thereof.
Section 7.6. Trustee Not Liable for Certificates or Related Documents.
--------------------------------------------------------
The recitals contained herein and in the Certificates (other than the signature
and counter-signature of the Trustee on the Certificates) shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representations as to the validity or
sufficiency of this Agreement, of any Related Document or of the Certificates
(other than the signature and counter-signature of the Trustee on the
Certificates), or of the Fee Assets or the Residual Assets or any related
documents with respect to the Fee Assets or the Residual Assets and the Trustee
shall in no event assume or incur any liability, duty or obligation to any
person other than as expressly provided for herein. The Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of the Fee Assets, the Residual Assets or other
Trust Property or for or with respect to the sufficiency of the Trust Property
or its ability to generate the payments to be distributed to Certificateholders
under this Agreement, including, without limitation: the validity of the
assignment of the Fee Assets and the Residual Assets to Finance I and Finance II
or the issuance of the Finance I Note to the Trust and the assignment of the
Residual Assets to the Trust, or of any intervening assignment, or the accuracy
of any such warranty or representation or any action of Finance I or Finance II
taken in the name of the Trustee.
Section 7.7. Trustee May Own Senior Certificates. The Trustee in its
-----------------------------------
individual or any other capacity may become the owner or pledgee of Senior
Certificates and may deal with the Depositor, Finance I, Finance II and the
Servicer in banking or other transactions with the same rights as it would have
if it were not Trustee.
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ARTICLE VIII
COMPENSATION OF TRUSTEE
Section 8.1. Trustee's Fees and Expenses. The Trustee shall receive as
---------------------------
compensation for its services hereunder such fees as have been separately agreed
upon before the date hereof between Green Tree and the Trustee, and the Trustee
shall be entitled to be reimbursed by Green Tree for its other reasonable
expenses hereunder, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the
Trustee may employ in connection with the exercise and performance of its rights
and its duties hereunder, provided, however, that the Trustee shall only be
-------- -------
entitled to reimbursement for expenses hereunder to the extent such expenses (i)
are fees of outside counsel engaged by the Trustee in respect of the performance
of its obligations hereunder or (ii) relate to the performance of its
obligations pursuant to Section 5.5 hereof.
Section 8.2. Non-recourse Obligations. Notwithstanding anything in this
------------------------
Agreement or any Related Document, the Trustee agrees in its individual capacity
and in its capacity as Trustee for the Trust that all obligations of the Trust
to the Trustee individually or as Trustee for the Trust shall be recourse to the
Trust Property only and specifically shall not be recourse to the assets of any
Certificate Owner.
ARTICLE IX
DEFAULT
Section 9.1. Events of Default. "Event of Default," whenever used herein,
-----------------
means any one of the following events:
(a) default in the payment of interest due on any Distribution Date, and
continuance of such default for a period of six months (allocated in accordance
with Section 5.2(a)(i); or
(b) failure to pay the entire unpaid principal amount of the Senior
Certificates on or before the Distribution Date occurring in February 2004.
Section 9.2. Rights upon an Event of Default.
-------------------------------
(a) If an Event of Default shall have occurred and be continuing, the
Trustee or Certificate Owners beneficially owning at least 25% in aggregate
outstanding principal amount of the Senior Certificates (subject to rescission
as described below) may declare by written notice to the Subordinated
Certificateholders (and the Trustee, if declared by the Certificate Owners), the
entire principal amount of the Senior Certificates immediately due and payable,
together with accrued interest thereon.
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At any time after such a declaration of acceleration with respect to the
Senior Certificates has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee, the holders of a majority in
aggregate principal amount of the Senior Certificates, by written notice to the
Subordinated Certificateholders and the Trustee, may rescind and annul such
declaration and its consequences if
(i) the Subordinated Certificateholders have paid or deposited with the
Trustee an amount sufficient to pay
(A) all accrued but unpaid interest on the Senior Certificates, and
(B) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents.
(b) If the Senior Certificates have been declared due and payable
following an Event of Default, the Trustee may liquidate all or any portion of
the Trust Property, or may elect to maintain possession of the Trust Property
and continue to apply collections from the Trust Property as if there had been
no declaration of acceleration; provided, however, the Trustee will be
-------- -------
prohibited from selling the Trust Property following an Event of Default, unless
(i) the holders of all the outstanding Senior Certificates consent to such
sale; or
(ii) the proceeds of such sale are sufficient to pay in full the principal
of and the accrued interest on the outstanding Senior Certificates at the time
of such sale; or
(iii) the Trustee determines that the collections on the Trust Property
will not be sufficient on an ongoing basis to make all payments of interest on
the Senior Certificates as such payments become due and to pay the outstanding
principal amount of the Senior Certificates at maturity, and the Trustee obtains
the consent of Certificate Owners beneficially owning 66 2/3% of the aggregate
outstanding amount of the Senior Certificates.
Section 9.3. Distributions. If the Trustee collects any money or property
-------------
pursuant to this Article IX, the Trustee shall pay out the money or property in
the following order:
(i) first, amounts due and owing and required to be distributed to the
Trustee pursuant to this Agreement;
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(ii) second, to the Senior Certificateholders, on a pro rata basis, an
amount equal to the Senior Certificateholders' Interest Distributable Amount;
(iii) third, to the Senior Certificateholders, on a pro rata basis, the
unpaid principal amount of the Senior Certificates; and
(iv) fourth, any remaining money or property shall be distributed to the
Subordinated Certificateholders, according to their Percentage Interests.
The Trustee may fix a record date and payment date for any payment to the
Certificateholders pursuant to this Article IX. At least 15 days prior to such
record date, the Trustee shall mail to each Certificateholder a notice that
states the record date, the payment date and the amount to be paid.
ARTICLE X
TERMINATION
Section 10.1. Termination of the Trust.
------------------------
(a) The respective obligations and responsibilities of the Subordinated
Certificateholders and the Trustee created by this Agreement and the Trust
created by this Agreement shall terminate upon the latest of (i) the
Distribution Date immediately following the maturity of the Finance I Note, the
retirement of the last Residual Asset or other liquidation of the last item of
Trust Property or (ii) the payment to the Certificateholders of all amounts
required to be paid to them pursuant to this Agreement, or (iii) following the
payment in full of all principal and accrued interest on the Senior
Certificates, by vote of all the Subordinated Certificateholders, or (iv) at the
time provided in Section 10.2. In any case, there shall be delivered to the
Trustee and the Rating Agencies an opinion of counsel that all applicable
preference periods under federal, state and local bankruptcy, insolvency and
similar laws have expired with respect to the payments pursuant to clause (ii);
provided, however, that in no event shall the trust created by this Agreement
- -------- -------
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living on the date of this Agreement of Rose Kennedy of the
Commonwealth of Massachusetts. The Administrator shall promptly notify the
Trustee of any prospective termination pursuant to this Section 10.1. Except as
provided in Section 10.2, the bankruptcy, liquidation, dissolution, termination,
resignation, expulsion, withdrawal, death or incapacity of any Certificateholder
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Senior Certificate Owner's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
winding up of all or any part of the Trust or Trust Property nor (z) otherwise
affect the rights, obligations and liabilities of the parties hereto.
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(b) Except as provided in Section 10.1(a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Upon the winding up of the Trust and its termination, the Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Business Trust Statute.
Section 10.2. Dissolution Events with respect to the Subordinated
---------------------------------------------------
Certificateholders. In the event that a Dissolution Event shall occur with
- ------------------
respect to one but not both Subordinated Certificateholders, the remaining
Subordinated Certificateholder shall, within 90 days of such Dissolution Event,
(i) select a successor Subordinated Certificateholder (a "Successor Subordinated
Certificateholder") (that shall have a net worth at least equal to the Minimum
Net Worth and shall acquire the existing assets and liabilities of the
Subordinated Certificateholder that has suffered the Dissolution Event and
succeed to such Subordinated Certificateholders rights and obligations
hereunder), and (ii) deliver to the Trustee an opinion of counsel to the effect
that the Trust will not be an association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes. In the event that (i)
the remaining Subordinated Certificateholder is unable to locate a Successor
Subordinated Certificateholder or to obtain such an opinion or (ii) a
Dissolution Event occurs with respect to both Subordinated Certificateholders,
the Trust will terminate. Promptly after the occurrence of either of the events
referred to in clause (i) or clause (ii) of the preceding sentence (each a
"Liquidation Event"), (i) each Subordinated Certificateholder shall give the
Trustee written notice of the occurrence of such Liquidation Event, (ii) the
Trustee shall, upon the receipt of such written notice, give prompt written
notice to the Certificateholders of the occurrence of such Liquidation Event;
provided, however, that any failure to give a notice required by this sentence
- -------- -------
shall not prevent or delay, in any manner, a termination of the Trust pursuant
to the first sentence of this Section 10.2. Upon a termination pursuant to this
Section, the Trustee shall sell the assets of the Trust (other than the
Certificate Account) at one or more private or public sales conducted in any
manner permitted by law. The proceeds of such a sale of the assets of the Trust
(the "Insolvency Proceeds") shall be distributed as provided in Section 9.3.
ARTICLE XI
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
Section 11.1. Eligibility Requirements for Trustee. The Trustee shall at
------------------------------------
all times be a corporation (i) satisfying the provisions of Section 3807(a) of
the Business Trust Statute; (ii) authorized to exercise corporate trust powers;
(iii) having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal or State authorities; (iv) having (or
having a parent which has) a rating of at least Baa3 by Moody's or shall
otherwise be satisfactory to Moody's.
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If such corporation shall publish reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 11.2.
Section 11.2. Resignation or Removal of Trustee. The Trustee may at any
---------------------------------
time resign and be discharged from the trusts hereby created by giving written
notice thereof to the Subordinated Certificateholders at least 30 days before
the date specified in such instrument. Upon receiving such notice of
resignation, the Subordinated Certificateholders shall promptly appoint a
successor Trustee meeting the qualifications set forth in Section 11.1 by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If no
successor Trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.1 and shall fail to resign after written request
therefor by the Subordinated Certificateholders or if at any time the Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Subordinated Certificateholders may remove the Trustee. If the Subordinated
Certificateholders shall remove the Trustee under the authority of the
immediately preceding sentence, the Subordinated Certificateholders shall
promptly appoint a successor Trustee meeting the qualification requirements of
Section 11.1 by written instrument, in triplicate, one copy of which instrument
shall be delivered to the outgoing Trustee so removed, one copy to the Servicer
and one copy to the successor Trustee and payment of all fees owed to the
outgoing Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 11.3. The Subordinated Certificateholders shall provide notice of such
resignation or removal of the Trustee to each of the Rating Agencies.
Section 11.3. Successor Trustee. Any successor Trustee appointed pursuant
-----------------
to Section 11.2 shall execute, acknowledge and deliver to the Subordinated
Certificateholders and to its predecessor Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Trustee shall become effective and such successor Trustee,
without
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any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties, and obligations of its predecessor under this Agreement,
with like effect as if originally named as Trustee. The predecessor Trustee
shall deliver to the successor Trustee all documents and statements and monies
held by it under this Agreement; and the Subordinated Certificateholders and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee all such rights, powers, duties, and
obligations.
No successor Trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor Trustee shall be eligible
pursuant to Section 11.1.
Upon acceptance of appointment by a successor Trustee pursuant to this
Section, Finance I shall mail notice of the successor of such Trustee to all
Certificateholders and the Rating Agencies. If Finance I shall fail to mail
such notice within 10 days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of Finance I.
Section 11.4. Merger or Consolidation of Trustee. Any corporation into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 11.1, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided further that
the Trustee shall mail notice of such merger or consolidation to the Rating
Agencies.
Section 11.5. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property may at the time be located, the Administrator and the
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Trustee and Finance I
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Property, and to vest in such Person,
in such capacity, such title to the Trust, or any part thereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Administrator and the Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, the Trustee,
subject to the approval of Finance I, shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section
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10.1 and no notice of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 11.1.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or imposed upon
the Trustee shall be conferred upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed, the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust Property or any portion thereof
in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no trustee under this Agreement shall be personally liable by reason
of any act or omission of any other trustee under this Agreement; and
(iii) the Administrator and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Each
such instrument shall be filed with the Trustee and a copy thereof given to the
Administrator and Finance I.
Any separate trustee or co-trustee may at any time appoint the Trustee, its
agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.1. Amendment.
---------
(a) This Agreement may be amended by the Subordinated Certificateholders
and the Trustee, but without the consent of any of the Senior
Certificateholders, (i) to cure any ambiguity, or (ii) to correct, supplement or
modify any provisions in this Agreement; provided, however, that such action
-------- -------
shall not, as evidenced by an opinion of counsel (which may be internal counsel
to the Subordinated Certificateholders), adversely affect in any material
respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Subordinated Certificateholders and the Trustee with the consent of a
Certificate Majority of the Senior Certificates (which consent of any Holder of
a Certificate given pursuant to this Section or pursuant to any other provision
of this Agreement shall be conclusive and binding on such Holder and on all
future Holders of such Certificate and of any Certificate issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement, or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (a) increase or
-------- -------
reduce in any manner the amount of, or accelerate or delay the timing of
distributions that shall be required to be made on any Certificate or the
Interest Rate or (b) reduce the aforesaid percentage required to consent to any
such amendment or any waiver hereunder, without the consent of the Holders of
all Certificates then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Subordinated Certificateholders shall furnish written notification of the
substance of such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder unless such parties have previously received
such notification.
(e) It shall not be necessary for the consent of Certificateholders
pursuant to Section 12.1(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe, including
the establishment of record dates.
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(f) Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an opinion of counsel (which may be
internal counsel to the Subordinated Certificateholders) stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery of such amendment
have been satisfied. The Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement or otherwise.
Section 12.2. No Recourse. Each Senior Certificateholder by accepting a
-----------
Senior Certificate acknowledges that such Certificateholder's Certificates
represent obligations of the Trust only and do not represent interests in or
obligations of the Depositor, Finance I, Finance II, Green Tree, the Servicer,
the Trustee, or any Affiliate of any of the foregoing and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Senior Certificates or the Related
Documents.
Section 12.3. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware without regard to
the principles of conflicts of laws thereof and the obligations, rights and
remedies of the parties under this Agreement shall be determined in accordance
with such laws.
Section 12.4. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.5. Third-Party Beneficiaries. This Agreement shall inure to
-------------------------
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder.
Section 12.6. Counterparts. For the purpose of facilitating its execution
------------
and for other purposes, this Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.
Section 12.7. Notices. All demands, notices and communications under this
-------
Agreement shall be in writing, personally delivered or mailed by certified mail-
return receipt requested, and shall be deemed to have been duly given upon
-43-
<PAGE>
receipt (a) in the case of Finance I, Finance II or the Depositor, at the
following address: Registered Agent, The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, with copies to:
Green Tree Financial Corporation, Attention: Chief Financial Officer, (b) in
the case of the Trustee, at the Corporate Trust Office, (c) in the case of each
Rating Agency, 99 Church Street, New York, New York 10007 (for Moody's) and One
State Street Plaza, New York, New York 10007 (for Fitch Investors Service,
Inc.), or at such other address as shall be designated by any such party in a
written notice to the other parties. Notwithstanding the foregoing, any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register, and any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
-44-
<PAGE>
IN WITNESS WHEREOF, the Depositor, Finance I, Finance II and the Trustee
have caused this Trust Agreement to be duly executed by their respective
officers as of the day and year first above written.
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I, AS DEPOSITOR
By
-----------------------------
Name:
Title:
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I
By
-----------------------------
Name:
Title:
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. II
By
-----------------------------
Name:
Title:
WILMINGTON TRUST COMPANY
By
-----------------------------
Name:
Title:
-45-
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST OF
GREEN TREE NET SECURITIZED INTEREST MARGIN TRUST, 1994-A
--------------------------------------------------------
THIS Certificate of Trust of GREEN TREE NET SECURITIZED INTEREST
MARGIN TRUST, 1994-A (the "Trust"), dated as of February ____, 1994, is being
duly executed and filed by Wilmington Trust Company, a Delaware corporation, as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
---
Code, (S) 3801 et seq.).
- ---- -- ----
1. Name. The name of the business trust formed hereby is GREEN TREE
----
NET SECURITIZED INTEREST MARGIN TRUST, 1994-A.
2. Delaware Trustee. The name and business address of the trustee
----------------
of the Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.
3. This Certificate of Trust will be effective March ___, 1994.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
Wilmington Trust Company, not in its
individual capacity but solely as
Trustee under a Trust Agreement dated
as of January 1, 1994.
By
------------------------------------
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF SENIOR CERTIFICATE
GREEN TREE SECURITIZED NET INTEREST MARGIN TRUST, 1994-A
SECURITIZED NET INTEREST MARGIN
(This Securitized Net Interest Margin Certificate does not
represent an obligation of, or an interest in, Green Tree
Financial Corporation ("Green Tree") or any of its
affiliates, except to the extent set forth in the Trust
Agreement referred to herein.)
Certificate No. Denomination: $
------ ------------------
Cut-off Date: Aggregate Denomination of all
Certificates: $
-------------
First Distribution Date: Interest Rate: %
--
Maturity Date:
Servicer: February 15, 2004
Green Tree Financial Corporation
CUSIP:
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company, a New York Corporation ("DTC") to the Trustee or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
B-1
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securitized Net Interest Margin Certificates
referred to in the within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY, WILMINGTON TRUST COMPANY,
not in its individual capacity but not in its individual capacity but
solely as Trustee solely as Trustee
By FIRST TRUST NATIONAL
ASSOCIATION,
Authenticating Agent
by
------------------------------
by
--------------------------------
THIS CERTIFIES THAT _____________________________________ is the
registered owner of a Securitized Net Interest Margin Certificate (herein called
a "Certificate") issued by the Green Tree Securitized Net Interest Margin Trust,
1994-A (the "Trust"). The Trust was created pursuant to a Trust Agreement,
dated as of January 1, 1994 (the "Trust Agreement"), among Green Tree
Manufactured Housing Net Interest Margin Finance Corp. I ("Finance I"), Green
Tree Manufactured Housing Net Interest Margin Finance Corp. II ("Finance II")
and Wilmington Trust Company, not in its individual capacity but solely as
Trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement, each of the Assignment Agreements, dated as of January 1, 1994 (the
"Assignment Agreements") among (i) Green Tree and Finance I and (ii) Green Tree,
Finance I and Finance II, or the Transfer Agreement dated as of January 1, 1994
(the "Transfer Agreement), among Finance I, Finance II and the Trust or the
Servicing Agreement dated as of January 1, 1994 (the "Servicing Agreement"),
between the Trust and Green Tree, as servicer ("Green Tree" or the "Servicer").
The Trust, for value received, hereby promises to pay to [
], or registered assigns, the principal sum of [$ ], payable on
or before February 15, 2004 (the "Maturity Date"). The Trust will pay interest
on this Certificate at the rate per annum shown above on each Distribution Date
until the principal of this Certificate is paid or made available for payment,
on the principal amount outstanding on the preceding Distribution Date (after
giving effect to all payments of principal on the preceding Distribution Date).
This Certificate is one of the duly authorized Certificates designated
in the Trust Agreement as "Senior Certificates". The Trust is also issuing
Subordinated Certificates (the "Subordinated Certificates"). This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Trust
B-2
<PAGE>
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The
Certificates are payable from the assets of the Trust, which include (as more
fully described in the Trust Agreement) (i) a limited recourse note (the
"Finance I Note") issued by Finance I, and (ii) the residual interests in
certain trusts (the "Residual Assets"). The Finance I Note will be payable
solely from certain assets of Finance I (the "Fee Assets") acquired by Finance I
from Green Tree.
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on March 15, 1994, to the
person in whose name this Certificate is registered at the close of business the
last day of the preceding calendar month (the "Record Date"), such
Certificateholder's Fractional Undivided Interest in the sum of (a) the Senior
Certificateholders' Interest Distributable Amount and (b) the Senior
Certificateholders' Principal Distributable Amount to the extent of the funds
available therefor.
The Trust shall pay interest on overdue installments of interest at
the Interest Rate to the extent lawful.
As described above, the entire unpaid principal amount of this
Certificate shall be due and payable on or before the Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Certificates shall be due and payable on the date on which an Event of Default
shall have occurred and be continuing and the Trustee or the Holders of the
Certificates representing 25% of the Certificates have declared the Certificates
to be immediately due and payable in the manner provided in Section 9.2 of the
Trust Agreement. All principal payments on the Certificates shall be made pro
rata to the Certificateholders entitled thereto.
It is the intent and agreement of the Depositor, the Subordinated
Certificateholders and the Certificateholders that, for purposes of federal
income, state and local income and franchise and any other income taxes, the
Certificates will be treated as debt of the Trust. Each Certificateholder, by
acceptance of a Certificate, covenants and agrees to treat, and to take no
action inconsistent with the treatment of, the Certificates as debt for such tax
purposes.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
either Subordinated Certificateholder or join in any institution against either
Subordinated Certificateholder of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Trust Agreement or any of the
Related Documents.
B-3
<PAGE>
Except as provided in the Trust Agreement, distributions on this
Certificate will be made by the Trustee by check or money order mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon, or by
wire transfer, in immediately available funds, to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior to
such Distribution Date and such Certificateholder's Certificates in the
aggregate evidence a denomination of not less than $1,000,000 (or if such
Certificateholder is a Depositor or an Affiliate thereof). Except as otherwise
provided in the Trust Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency maintained for that purpose by the
Trustee. The Record Date otherwise applicable to distributions shall not be
applicable to such final distribution.
The Certificates do not represent an obligation of, or an interest in,
Green Tree, the Trustee or any Affiliate of any of them. The Certificates are
limited in right of payment to certain collections and recoveries respecting the
Finance I Note and the Residual Assets, all as more specifically set forth in
the Trust Agreement. None of the Trustee, the Administrator or the Subordinated
Certificateholders shall incur any personal liability in connection herewith. A
copy of the Trust Agreement may, upon request, be examined by any
Certificateholder during normal business hours at the principal office of
Finance I and at such other places, if any, designated by Finance I.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Trust
Agreement at any time by the Subordinated Certificateholders and the Trustee.
In certain limited circumstances, the Trust Agreement may only be amended with
the consent of the Holders of Senior Certificates evidencing not less than a
majority of the aggregate outstanding principal amount of the Senior
Certificates and, in certain circumstances, 100% of the aggregate outstanding
principal amount of the Certificates. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and on all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.
As provided in the Trust Agreement and subject to certain limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Registrar upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the First Trust National Association on behalf of the Trustee in St. Paul,
Minnesota, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate
B-4
<PAGE>
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate fractional undivided interest in the
Trust of the same class shall be issued to the designated transferee.
This Certificate may not be acquired by a "disqualified organization"
(as defined below). By accepting and holding this Certificate, the Holder
hereof shall be deemed to have represented and warranted that it is not a
disqualified organization. Any attempted or purported transfer in violation of
these transfer restrictions will be null and void and will vest no rights in any
purported transferee. A "disqualified organization" means (i) the United
States, any State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of the foregoing
(not including instrumentalities described in Section 168(h)(2)(D) of the Code
or the Federal Home Loan Mortgage Corporation), (ii) any organization (other
than a cooperative described in Section 521 of the Code) that is exempt from
federal income tax, unless it is subject to the tax imposed by Section 511 of
the Code or (iii) any organization described in Section 1381(a)(2)(C) of the
Code.
The Senior Certificates are issuable only as registered Certificates
without coupons in denominations of $1,000 and integral multiples thereof. As
provided in the Trust Agreement and subject to certain limitations therein set
forth, Senior Certificates are exchangeable for new Senior Certificates of
authorized denominations of a like aggregate fractional undivided interest, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for the purpose of receiving distributions and
for all other purposes, and neither the Trustee, the Certificate Registrar nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the disposition of all property held as part of the Trust.
Finance I and Finance II may at their option cause the Trust to prepay the
Senior Certificates in whole but not in part by contributing cash to the Trust
in an amount equal to the unpaid principal amount of the Senior Certificates
plus any accrued and unpaid interest, and such prepayment will effect early
retirement of the Senior Certificates; provided, however, such right of purchase
-------- -------
is exercisable only as of a Distribution Date as of which the outstanding
principal amount of the Senior Certificates is less than 10% of the original
principal amount of the Senior Certificates.
B-5
<PAGE>
The recitals contained herein shall be taken as the statements of the
Depositor or the Subordinated Certificateholders, as the case may be, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representations as to the validity or sufficiency of this Certificate
or of the assignment of the Fee Assets or the Residual Assets or any related
document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or be valid for any purpose.
B-6
<PAGE>
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Certificate to be duly executed.
Dated: , 1994 GREEN TREE SECURITIZED NET
--------- INTEREST MARGIN TRUST, 1994-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Trustee
By:
-------------------------------------
Name:
Title:
Attest:
- --------------------------
Name:
Title:
B-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- ------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
- ------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- ------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*
---------------------------
Signature Guaranteed:
*
---------------------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of The New York Stock Exchange, Inc. or a commercial
bank or trust company.
B-8
<PAGE>
EXHIBIT C
FORM OF SUBORDINATED CERTIFICATE
GREEN TREE SECURITIZED NET INTEREST MARGIN TRUST, 1994-A
SUBORDINATED CERTIFICATE
(This Subordinated Certificate does not represent an
obligation of, or an interest in, Green Tree Financial
Corporation ("Green Tree"), or any of its affiliates,
except to the extent set forth in the Trust Agreement
referred to herein.)
Certificate No. Percentage Interest: %
----- -----
Cut-off Date:
First Distribution Date:
Servicer:
Green Tree Financial Corporation
CUSIP:
C-1
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Certificates referred to in the
within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY WILMINGTON TRUST COMPANY
as Trustee or as Trustee
By WILMINGTON TRUST COMPANY,
Authenticating Agent
by
------------------------
by
---------------------------
THIS CERTIFIES THAT _____________________________________ is the
registered owner of a nonassessable, fully-paid, fractional undivided interest
in the Green Tree Securitized Net Interest Margin Trust, 1994-A (the "Trust").
The Trust was created pursuant to a Trust Agreement, dated as of January 1, 1994
(the "Trust Agreement"), among Green Tree Manufactured Housing Net Interest
Margin Finance Corp. I ("Finance I"), Green Tree Manufactured Housing Net
Interest Margin Finance Corp. II ("Finance II") and Wilmington Trust Company, as
Trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth below. To the extent not otherwise defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement, each of the Assignment Agreements, dated as of January 1, 1994 (the
"Assignment Agreements"), between (i) Green Tree and Finance I and (ii) Green
Tree, Finance I and Finance II, or the Transfer Agreement, dated as of January
1, 1994 (the "Transfer Agreement"), among Finance I, Finance II and the Trust,
or the Servicing Agreement dated as of January 1, 1994 (the "Servicing
Agreement"), between the Trust and Green Tree, as servicer ("Green Tree" or the
"Servicer").
This Certificate is one of the duly authorized Certificates designated
in the Trust Agreement as "Subordinated Certificates" (herein called the
"Certificates"). The Trust is also issuing Senior Certificates (the "Senior
Certificates"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
holder of this Certificate by virtue of the acceptance hereof assents and by
which such holder is bound. The Certificates are payable from the assets of the
Trust, which include (as more fully described in the Trust Agreement) (i) a
limited recourse note (the "Finance I Note") issued by Finance I, and (ii) the
residual interests in certain trusts (the "Residual Assets"). The Finance I
Note will be payable solely from certain assets of Finance I (the "Fee Assets")
acquired by Finance I from Green Tree.
Under the Trust Agreement, no distributions of principal or interest
will be paid on the Subordinated Certificates until principal and interest on
the Senior Certificates have been paid in full (the "Senior Certificates Final
Payment").
C-2
<PAGE>
On the Distribution Date following the Senior Certificates Final Payment, there
will be distributed on the 15th day of each month or, if such 15th day is not a
Business Day, the next succeeding Business Day (the "Distribution Date"),
commencing on such Distribution Date, to the person in whose name this
Certificate is registered at the close of business the last day of the preceding
Monthly Period (the "Record Date"), such Certificateholder's Fractional
Undivided Interest in the amount in the Certificate Account.
It is the intent and agreement of the Depositor, the Subordinated
Certificateholders and the Senior Certificateholders that, for purposes of
federal income, state and local income and franchise and any other income taxes,
the Trust will be treated as a partnership and the Subordinated
Certificateholders will be treated as partners in that partnership and the
Senior Certificates will be treated as debt of the Trust. The Subordinated
Certificateholders, by acceptance of a Certificate, agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Except as provided in the Agreement, distributions on this Certificate
will be made by the Trustee by check or money order mailed to the
Certificateholder of record in the Certificate Register without the presentation
or surrender of this Certificate or the making of any notation hereon. Except
as otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency maintained for that
purpose by the Trustee. The Record Date otherwise applicable to distributions
shall not be applicable to such final distribution.
The Certificates do not represent an obligation of, or an interest in,
Green Tree, the Trustee or any Affiliate of any of them. The Certificates are
limited in right of payment to certain collections and recoveries respecting the
Finance I Note and the Residual Assets, all as more specifically set forth in
the Trust Agreement. None of the Trustee, the Administrator or the Subordinated
Certificateholders shall incur any personal liability in connection herewith. A
copy of the Trust Agreement may, upon request, be examined by any
Certificateholder during normal business hours at the principal office of
Finance I and at such other places, if any, designated by Finance I.
The Subordinated Certificates may not be acquired by (a) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title 1 of ERISA, (b) a plan described in Section 4975(e)(1) of
the Code or (c) any entity whose underlying assets include plan assets by reason
of a plan's investment in the entity (each, a "Benefit Plan"). By accepting and
holding this Certificate, the Holder hereof shall be deemed to have represented
and warranted that it is not a Benefit Plan.
C-3
<PAGE>
The Trustee, the Certificate Registrar and any agent of the Trustee or
the Certificate Registrar may treat the person in whose name this Certificate is
registered as the owner hereof for the purpose of receiving distributions and
for all other purposes, and neither the Trustee, the Certificate Registrar nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement
and Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust.
The recitals contained herein shall be taken as the statements of the
Depositor or the Subordinated Certificateholders, as the case may be, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representations as to the validity or sufficiency of this Certificate
or of the assignment of the Fee Assets or the Residual Assets or any related
document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Certificate to be duly executed.
Dated: , 1994 GREEN TREE SECURITIZED NET
--------- INTEREST MARGIN TRUST, 1994-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Trustee
By:
-------------------------------
Name:
Title:
Attest:
- --------------------------
Name:
Title:
C-4
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
- -------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- -------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*
---------------------------
Signature Guaranteed:
*
---------------------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of The New York Stock Exchange, Inc. or a commercial
bank or trust company.
C-5
<PAGE>
EXHIBIT D
FORM OF DEPOSITORY AGREEMENT
----------------------------
D-1
<PAGE>
EXHIBIT E
FORM OF TRANSFER AGREEMENT
--------------------------
E-1
<PAGE>
EXHIBIT F
FORM OF FINANCE I NOTE
----------------------
F-1
<PAGE>
EXHIBIT G
FORM OF SECURITY AGREEMENT
--------------------------
G-1
<PAGE>
EXHIBIT H
FORM OF SERVICING AGREEMENT
---------------------------
G-2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
INTRODUCTION............................................................... 1
ARTICLE I DEFINITIONS.............................................. 1
Section 1.1. Definitions.............................................. 1
Section 1.2. Usage of Terms........................................... 8
Section 1.3. Calculations............................................. 8
Section 1.4. Section References....................................... 8
Section 1.5. Action by or Consent of Certificateholders............... 8
ARTICLE II CREATION OF TRUST........................................ 9
Section 2.1. Creation of Trust........................................ 9
Section 2.2. Office................................................... 9
Section 2.3. Purposes and Powers...................................... 9
Section 2.4. Appointment of Trustee................................... 10
Section 2.5. Initial Capital Contribution of Trust Estate............. 10
Section 2.6. Declaration of Trust..................................... 10
Section 2.7. Liability of the Certificateholders...................... 10
Section 2.8. Title to Trust Property.................................. 11
Section 2.9. Situs of Trust........................................... 11
Section 2.10. Representations and Warranties of Finance I
and Finance II........................................... 11
Section 2.11. Federal Income Tax Allocations........................... 12
Section 2.12. Covenants of the Subordinated Certificateholders......... 13
Section 2.13. Covenants of the Certificate Owners...................... 14
ARTICLE III THE CERTIFICATES......................................... 15
Section 3.1. Initial Ownership........................................ 15
Section 3.2 Conditions to Issuance of the Certificate................ 15
Section 3.3. The Certificates......................................... 16
Section 3.4. Unconditional Rights of Senior Certificateholders
to Receive Principal and Interest........................ 16
Section 3.5. Authentication of Certificates........................... 16
Section 3.6. Registration of Transfer and Exchange of
Senior Certificates...................................... 16
Section 3.7. Mutilated, Destroyed, Lost or Stolen Certificates........ 19
Section 3.8. Persons Deemed Certificate Owners........................ 20
Section 3.9. Access to List of Certificateholders' Names and Addresses 20
Section 3.10. Maintenance of Office or Agency.......................... 20
Section 3.11. Appointment of Paying Agent.............................. 21
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE IV ACTIONS BY TRUSTEE........................................ 21
Section 4.1. Restriction on Power of Certificate Owners................ 21
Section 4.2. Action by Subordinated Certificateholders
with Respect to Bankruptcy................................ 22
Section 4.3. Restrictions on Certificate Owners' Power................. 22
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES................ 22
Section 5.1. Certificate Account....................................... 22
Section 5.2. Distribution of Funds in Certificate Account.............. 23
Section 5.3. Method of Payment......................................... 26
Section 5.4. No Segregation of Monies; No Interest..................... 26
Section 5.5. Accounting; Reports; Tax Returns.......................... 26
Section 5.6. Prepayment of Senior Certificates; Final Payment
on Senior Certificates.................................... 27
ARTICLE VI AUTHORITY AND DUTIES OF TRUSTEE........................... 28
Section 6.1. General Authority......................................... 28
Section 6.2. General Duties............................................ 28
Section 6.3. Action upon Instruction................................... 29
Section 6.4. No Duties Except as Specified in this Agreement
or in Instructions........................................ 30
Section 6.5. No Action Except under Specified Documents
or Instructions........................................... 30
Section 6.6. Restrictions.............................................. 30
Section 6.7 Administration Agreement.................................. 30
ARTICLE VII CONCERNING THE TRUSTEE.................................... 31
Section 7.1. Acceptance of Trustee and Duties.......................... 31
Section 7.2. Furnishing of Documents................................... 32
Section 7.3. Representations and Warranties............................ 33
Section 7.4. Reliance; Advice of Counsel............................... 33
Section 7.5. Not Acting in Individual Capacity......................... 34
Section 7.6. Trustee Not Liable for Certificates....................... 34
Section 7.7. Trustee May Own Senior Certificates....................... 34
ARTICLE VIII COMPENSATION OF TRUSTEE................................... 35
Section 8.1. Trustee's Fees and Expenses............................... 35
Section 8.2. Non-recourse Obligations.................................. 35
ARTICLE IX DEFAULT................................................... 35
Section 9.1. Events of Default......................................... 35
Section 9.2. Rights upon an Event of Default........................... 35
Section 9.3. Distributions............................................. 36
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE X TERMINATION.............................................. 37
Section 10.1. Termination of the Trust................................. 37
Section 10.2. Dissolution Events with respect to the
Subordinated Certificateholders.......................... 38
ARTICLE XI SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES............... 38
Section 11.1. Eligibility Requirements for Trustee..................... 38
Section 11.2. Resignation or Removal of Trustee........................ 39
Section 11.3. Successor Trustee........................................ 39
Section 11.4. Merger or Consolidation of Trustee....................... 40
Section 11.5. Appointment of Co-Trustee or Separate Trustee............ 40
ARTICLE XII MISCELLANEOUS PROVISIONS................................. 42
Section 12.1. Amendment................................................ 42
Section 12.2. No Recourse.............................................. 43
Section 12.3. Governing Law............................................ 43
Section 12.4. Severability of Provisions............................... 43
Section 12.5. Third-Party Beneficiaries................................ 43
Section 12.6. Counterparts............................................. 43
Section 12.7. Notices.................................................. 43
</TABLE>
EXHIBITS
FORM OF CERTIFICATE OF TRUST EXHIBIT A
FORM OF SENIOR CERTIFICATE EXHIBIT B
FORM OF SUBORDINATED CERTIFICATE EXHIBIT C
FORM OF DEPOSITORY AGREEMENT EXHIBIT D
FORM OF TRANSFER AGREEMENT EXHIBIT E
FORM OF FINANCE I NOTE EXHIBIT F
FORM OF SECURITY AGREEMENT EXHIBIT G
FORM OF SERVICING AGREEMENT EXHIBIT H
<PAGE>
Exhibit 4.2
FEE ASSETS ASSIGNMENT
THIS ASSIGNMENT (the "Assignment"), dated as of January 1, 1994, is made by
Green Tree Financial Corporation, a Minnesota corporation ("Green Tree") in
favor of Green Tree Manufactured Housing Net Interest Margin Finance Corp. I,
a Delaware corporation ("Finance I") and a wholly owned subsidiary of Green
Tree.
WHEREAS, pursuant to certain Pooling and Servicing Agreements or related
agreements identified in Appendix I attached hereto, Green Tree or a
subsidiary of Green Tree (which has assigned the rights to receive such fees
to Green Tree) is entitled to receive certain guarantee fees, as specified in
Appendix I hereto, (the "Guarantee Fees"), for providing credit enhancement
against delinquencies, defaults and net liquidation losses on the related
pools of manufactured housing contracts issued by or on behalf of Green Tree
(the "Contracts").
WHEREAS, pursuant to certain Pooling and Servicing Agreements identified in
Appendix II attached hereto (the "Pooling and Servicing Agreements"), Green Tree
is entitled to receive certain fees as specified in Appendix II hereto (the
"Servicing Fees") for servicing the Contracts.
WHEREAS, pursuant to regulations promulgated by the Government National
Mortgage Association ("GNMA"), Green Tree has originated and sold pools of FHA-
insured and VA-guaranteed manufactured housing contracts in the form of GNMA
Certificates, as identified in Appendix III attached hereto (the "GNMA Pools").
Pursuant to such GNMA regulations, Green Tree is entitled to receive certain
servicing fees (the "GNMA Servicing Fees") for servicing the GNMA Pools.
WHEREAS, pursuant to the terms and conditions set forth herein, Green Tree
desires to assign to Finance I its right to receive the Guarantee Fees, its
right to receive a portion of the Servicing Fees and its right to receive a
portion of the GNMA Servicing Fees.
ARTICLE I
ASSIGNMENT OF FEE ASSETS
1.01 Guarantee Fees. Subject to and upon the terms and conditions set
--------------
forth in this Assignment, Green Tree, as a contribution of capital, hereby
transfers, assigns and delivers to Finance I all of its right to receive the
Guarantee Fees identified in Appendix I hereto, payable on or after February 15,
1994. In order to effect such transfer, Green Tree shall deliver to the Trustee
of each Securitized Pool a written notification in substantially the form
attached hereto as Exhibit A.
<PAGE>
1.02 Excess Servicing Fees. Subject to and upon the terms and conditions
---------------------
set forth in this Assignment, Green Tree, as a contribution of capital, hereby
transfers, assigns and delivers to Finance I its right to receive the portion of
the Servicing Fees payable after payment of the Normal Servicing Fee to Green
Tree, as further specified in Appendix II hereto (the "Excess Servicing Fees"),
payable on or after February 15, 1994. Green Tree shall retain all rights to
receive late fees and extension fees paid by Obligors (as defined in the Pooling
and Servicing Agreements) as part of the Normal Servicing Fee. In order to
effect such transfer, Green Tree shall deliver to the Trustee of each
Securitized Pool a written notification in substantially the form attached
hereto as Exhibit A.
1.03 GNMA Excess Spread. Subject to and upon the terms and conditions set
------------------
forth in this Agreement, Green Tree, as a contribution of capital, hereby
transfers, assigns and delivers to Finance I its right to receive the GNMA
Excess Spread as defined herein, payable on or after February 15, 1994. The
"GNMA Excess Spread" payable each month shall be that portion of the GNMA
Servicing Fee payable to Green Tree with respect to each GNMA Pool, after
payment to Green Tree of (i) the FHA insurance premiums paid by Green Tree with
respect to FHA-insured Contracts, (ii) an amount equal to .50% per annum,
payable monthly, of the outstanding balance of such GNMA Pool, (iii) the amount
of prepayment shortfalls paid by Green Tree with respect to the prior month, and
(iv) all liquidation losses paid by Green Tree upon payment of a FHA or VA claim
during the prior month. In order to effect such transfer, Green Tree shall
deliver to the Custodian holding the Custodial Account on behalf of GNMA with
respect to the GNMA Pools a written notification in substantially the form
attached hereto as Exhibit B.
1.04 Security Interest in the Fee Assets. Although the parties intend
-----------------------------------
that the assignment of Green Tree's right to receive the Guarantee Fees, Excess
Servicing Fees and GNMA Excess Spread pursuant to this Agreement shall
constitute an absolute assignment and not a loan, if such assignments are deemed
to be a loan, the parties intend that the rights and obligations of the parties
to such loan shall be established pursuant to the terms of this Agreement. The
parties also intend and agree that Green Tree shall be deemed to have granted to
the Trustee, and Green Tree does hereby grant to the Trustee, a perfected first-
priority security interest in the items designated in Sections 1.01 through 1.03
above, and that this Agreement shall constitute a security agreement under
applicable law. If the trust created by the Trust Agreement terminates prior to
the satisfaction of the claims of any person under any Senior Certificates (as
defined in the Trust Agreement), the security interest created hereby shall
continue in full force and effect and the Trustee shall be deemed to be the
collateral agent for the benefit of such person.
-2-
<PAGE>
ARTICLE II
INSIDE REFINANCING PAYMENTS AND REPURCHASE PAYMENTS;
SERVICING OBLIGATIONS
2.01 Inside Refinancing Payments. As part of the foregoing transfer, with
---------------------------
respect to each Contract which is refinanced by an Obligor (as defined in the
Pooling and Servicing Agreements) through Green Tree, Green Tree agrees to pay
to or upon the order of Finance I an amount (an "inside refinancing payment")
equal to the unpaid balance of such Contract multiplied by the factor
applicable to such Contract, based on the month in which such refinancing
occurs and the Securitized Pool or GNMA Pool in which such Contract was
included, as specified in Exhibit C attached hereto; provided, however, that
------------------
if an inside refinancing payment with respect to the same Contract is paid by
Green Tree in connection with the assignment by Green Tree of the Residual
Assets pursuant to the Residual Assets Assignment, such inside refinancing
payment shall not be paid in connection with the assignment of the Fee Assets
hereunder.
2.02 Repurchase Payments. As part of the foregoing transfer, with respect
-------------------
to each Contract in a Securitized Pool which is repurchased by Green Tree
pursuant to its right as Servicer to repurchase such Contract in a Securitized
Pool when the outstanding balance of such Securitized Pool has declined to 10%
or less of its initial principal balance, or which is repurchased by Green Tree
because of a breach of certain representations and warranties contained in the
applicable Pooling and Servicing Agreement or GNMA Guaranty Agreement, Green
Tree agrees to pay to or upon the order of Finance I an amount (a "repurchase
payment") equal to the unpaid balance of such Contract multiplied by the factor
applicable to such Contract, based on the month in which such repurchase occurs
and the Securitized Pool in which such Contract was included, as specified in
Exhibit C attached hereto; provided, however, that if a repurchase payment with
------------------
respect to the same Contract is paid by Green Tree in connection with the
assignment by Green Tree of the Residual Assets pursuant to the Residual Assets
Assignment, such repurchase payment shall not be paid in connection with the
assignment of the Fee Assets hereunder.
2.03 Servicing Obligations. Green Tree agrees to continue to act as
---------------------
servicer of the Contracts, to provide such reports with respect to the Fee
Assets as Finance I may reasonably request, and to enter into such further
agreements with Finance I or its assignee relating to such servicing obligations
as Finance I may reasonably request.
-3-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GREEN TREE
Green Tree hereby represents and warrants to Finance I that:
3.01 Green Tree. Green Tree is a corporation duly organized, validly
----------
existing and in good standing under the laws of Minnesota, with the requisite
corporate power and authority to enter into this Assignment and to perform the
obligations required of it hereunder. The execution and performance of this
Assignment by Green Tree and the consummation of the transactions contemplated
hereby will not violate any provision of law applicable to Green Tree, and do
not and will not conflict with any of the terms of its Articles of Incorporation
or By-Laws. The execution and performance of this Assignment will not violate
any Pooling and Servicing Agreements or GNMA guaranty agreements; nor will the
execution and performance of this Assignment conflict with any other material
agreements of Green Tree which would result in a material adverse effect on
Green Tree.
3.02 Compliance with Contracts and Regulations. Green Tree has complied
-----------------------------------------
with all its obligations under the Contracts and the Pooling Servicing
Agreements and all applicable laws and regulations of the Federal Housing
Administration ("FHA"), the Veterans Administration ("VA") and GNMA and any
other government authority, which might affect the validity or enforceability of
the Contracts, the Pooling and Servicing Agreements or the GNMA guaranty
agreements and the consummation of the transactions contemplated hereby will not
violate any such obligations, laws or regulations.
3.03 Title to the Fee Assets . Green Tree is the sole owner of the Fee
------------------------
Assets, free and clear of all liens and encumbrances.
ARTICLE IV
MISCELLANEOUS
4.01 Survival of Representations and Warranties. Green Tree covenants and
------------------------------------------
agrees that its representations and warranties in this Assignment, and in any
document delivered or to be delivered pursuant hereto, shall survive the date
hereof.
4.02 Governing Law. The internal law, without regard to conflicts of laws
-------------
principles, of the State of Minnesota will govern all questions concerning the
construction, validity and interpretation of this Assignment and the performance
of the obligations imposed by this Assignment.
-4-
<PAGE>
IN WITNESS WHEREOF, Green Tree has executed this Assignment as of the day
and year first above written.
GREEN TREE FINANCIAL CORPORATION
By
------------------------------
Its
---------------------------
Acknowledged by: GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I
By
-----------------------------
Its
--------------------------
-5-
<PAGE>
APPENDIX I
GUARANTEE FEES
<TABLE>
<CAPTION>
Designation of
Pooling and Servicing Asset in Pooling
Transaction Agreement and Servicing
Name (or other Agreement) Agreement Stated Payee
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
GTFC 1993-3 September 1, 1993 Guarantee Fee Green Tree
GTFC 1993-2 June 1, 1993 Guarantee Fee Green Tree
GTFC 1993-1 March 1, 1993 Guarantee Fee Green Tree
GTFC 1992-2 December 1, 1992 Guarantee Fee Green Tree
GTFC 1992-1 September 1, 1992 Guarantee Fee Green Tree
MLMI 1990G September 1, 1990 Guarantee Fee Green Tree
MLMI 1990D June 1, 1990 Collateral Guarantee Green Tree
Fee
MLMI 1990B March 1, 1990 Collateral Guarantee Green Tree
Fee
MLMI 1989H December 1, 1989; Limited Guarantee MaHCS
amended January 29, Fee
1990; June 20, 1990;
February 13, 1992
MLMI 1989F October 1, 1989; Limited Guarantee Green Tree
amended Fee
February __, 1994
MLMI 1988E March 1, 1988; amended Limited Guarantee Green Tree
February __, 1994 Fee
MLMI 1987C December 1, 1987; Limited Guarantee Green Tree
amended May 6, 1991; Fee
February 13, 1992
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
MLMI 1987B October 1, 1987; Limited Guarantee Green Tree
amended May 6, 1991; Fee
February 13, 1992;
February __, 1994
GT Trust 1987-B June 1, 1987; amended Limited Guarantee Green Tree
July 22, 1987; July 30, Fee
1987; May 6, 1991;
February 13, 1992;
February __, 1994
GT Trust 1987-A March 1, 1987; Limited Guarantee Green Tree
amended May 6, 1991; Fee
February 13, 1992;
February __, 1994
</TABLE>
I-2
<PAGE>
APPENDIX II
SERVICING FEES
<TABLE>
<CAPTION>
Pooling and
Transaction Servicing Servicing Excess
Name Agreement Fee Servicing Fee
- -----------------------------------------------------------------------
<S> <C> <C> <C>
GTFC 1993-4 December 1, 1993 1.00% 0.50%
GTFC 1993-3 September 1, 1993 1.00% 0.50%
GTFC 1993-2 June 1, 1993 1.00% 0.50%
GTFC 1993-1 March 1, 1993 1.00% 0.50%
GTFC 1992-2 December 1, 1992 1.00% 0.50%
GTFC 1992-1 September 1, 1992 1.00% 0.50%
MLMI 1992D June 1, 1992 1.00% 0.50%
MLMI 1992B March 1, 1992 1.00% 0.50%
MLMI 1991I December 1, 1991 1.00% 0.50%
MLMI 1991G September 1, 1991 1.00% 0.50%
MLMI 1991D June 1, 1991, amended 1.00% 0.50%
February 13, 1992
MLMI 1991B March 1, 1991 1.00% 0.50%
MLMI 1990I December 1, 1990 1.00% 0.50%
MLMI 1990G September 1, 1990 1.00% 0.50%
MLMI 1990D June 1, 1990 1.00% 0.50%
MLMI 1990B March 1, 1990 1.00% 0.50%
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
MLMI 1989H December 1, 1989; 1.00% 0.50%
amended January 29,
1990; June 20, 1990;
February 13, 1992
MLMI 1989F October 1, 1989; amended 1.00% 0.50%
February __, 1994
MLMI 1989D June 1, 1989 1.00% 0.50%
MLMI 1989B March 1, 1989 1.00% 0.50%
MLMI 1988X December 1, 1988 1.00% 0.50%
MLMI 1988Q September 1, 1988 1.00% 0.50%
MLMI 1988H June 1, 1988 1.00% 0.50%
MLMI 1988E March 1, 1988; amended 1.00% 0.50%
February __, 1994
MLMI 1987C December 1, 1987; 1.00% 0.50%
amended May 6, 1991;
February 13, 1992;
February __, 1994
MLMI 1987B October 1, 1987; 1.00% 0.50%
amended May 6, 1991;
February 13, 1992;
February __, 1994
GT Trust 1987-B June 1, 1987; amended 1.50% 1.00%
July 22, 1987; July 30,
1987; May 6, 1991;
February 13, 1992;
February __, 1994
GT Trust 1987-A March 1, 1987; 1.50% 1.00%
amended May 6, 1991;
February 13, 1992;
February __, 1994
</TABLE>
II-2
<PAGE>
APPENDIX III
GNMA POOLS
[Listing of each GNMA Pool]
III-1
<PAGE>
EXHIBIT A
FORM OF TRUSTEE NOTIFICATION
<PAGE>
EXHIBIT B
FORM OF GNMA CUSTODIAN NOTIFICATION
<PAGE>
EXHIBIT C
INSIDE REFINANCING AND REPURCHASE PAYMENT FACTORS
(See Attached)
<PAGE>
Exhibit 4.3
RESIDUAL ASSETS ASSIGNMENT
THIS ASSIGNMENT (the "Assignment"), dated as of January 1, 1994, is made
by Green Tree Financial Corporation, a Minnesota corporation ("Green Tree") in
favor of Green Tree Manufactured Housing Net Interest Margin Finance Corp. I,
a Delaware corporation ("Finance I") and a wholly owned subsidiary of Green
Tree, and Green Tree Manufactured Housing Net Interest Margin Finance Corp. II,
a Delaware corporation ("Finance II") and a wholly owned subsidiary of Green
Tree.
WHEREAS, Green Tree is the owner of certain residual interests (the
"Residual Assets") in the "real estate mortgage investment conduits" ("REMICs")
issued pursuant to the Pooling and Servicing Agreements identified in Appendix
I attached hereto ("the Pooling and Servicing Agreements").
WHEREAS, pursuant to the terms and conditions set forth herein, Green Tree
desires to assign to each of Finance I and Finance II its right, title and
interest in fifty percent (50%) of each of the Residual Assets.
ARTICLE I
ASSIGNMENT OF RESIDUAL ASSETS
1.01 Residual Assets. Subject to and upon the terms and conditions set
---------------
forth in this Agreement, Green Tree, as a contribution of capital, hereby
transfers, assigns and delivers to each of Finance I and Finance II its right,
title and interest in fifty percent (50%) of each of the Residual Assets,
effective February 15, 1994. In order to effect such transfer, Green Tree shall
(i) with respect to all Residual Assets evidenced by a certificate, deliver to
or upon the order of Finance I and Finance II such certificates, duly endorsed
by Green Tree; and (ii) with respect to all Residual Assets not evidenced by a
certificate, deliver to the Trustee of the related Securitized Pool a written
notification substantially in the form attached hereto as Exhibit A.
1.02 Security Interest in Residual Assets. Although the parties
------------------------------------
intend that the assignment of the Residual Assets pursuant to this Agreement
shall constitute an absolute assignment and not a loan, if such assignments are
deemed to be a loan, the parties intend that the rights and obligations of the
parties to such loan shall be established pursuant to the terms of this
Agreement. The parties also intend and agree that Green Tree shall be deemed to
have granted to the Trustee, and Green Tree does hereby grant to the Trustee, a
perfected first-priority security interest in the items designated in Section
1.01 above, and that this Agreement shall constitute a security agreement under
applicable law. If the trust created by the Trust Agreement terminates prior to
the satisfaction of the claims of any person under any Senior Certificates (as
defined in the Trust Agreement), the security interest created hereby shall
continue in full force and effect and the Trustee shall be deemed to be the
collateral agent for the benefit of such person.
<PAGE>
ARTICLE II
INSIDE REFINANCING PAYMENTS AND REPURCHASE PAYMENTS;
SERVICING OBLIGATIONS
2.01 Inside Refinancing Payments. As part of the foregoing transfer,
---------------------------
with respect to each Contract which is refinanced by an Obligor (as defined in
the Pooling and Servicing Agreements) through Green Tree, Green Tree agrees to
pay to or upon the order of Finance I and Finance II an amount equal to the
unpaid balance of such Contract, multiplied by the factor applicable to such
Contract, based on the month in which such refinancing occurs and the
Securitized Pool in which such Contract was included, as specified in Exhibit B
attached hereto; provided, however, that if an inside refinancing payment with
------------------
respect to the same Contract is paid by Green Tree in connection with the
assignment by Green Tree of the Fee Assets pursuant to the Fee Assets
Assignment, such inside refinancing payment shall not be paid in connection with
the assignment of the Residual Assets hereunder.
2.02 Repurchase Payments. As part of the foregoing transfer, with respect
-------------------
to each Contract in a Securitized Pool which is repurchased by Green Tree
pursuant to its right as Servicer to repurchase such Contract in such
Securitized Pool when the outstanding balance of such Securitized Pool has
declined to 10% or less of its initial principal balance, or which is
repurchased by Green Tree because of a breach of certain representations and
warranties contained in the applicable Pooling and Servicing Agreement, Green
Tree agrees to pay to or upon the order of Finance I and Finance II an amount (a
"repurchase payment') equal to the unpaid balance of such Contract, multiplied
by the factor applicable to such Contract, based on the month in which such
repurchase occurs and the Securitized Pool in which such Contract was included,
as specified in Exhibit B attached hereto; provided, however, that if a
------------------
repurchase payment with respect to the same Contract is paid by Green Tree in
connection with the assignment by Green Tree of the Fee Assets pursuant to the
Fee Assets Assignment, such repurchase payment shall not be paid in connection
with the assignment of the Residual Assets hereunder.
2.03 Servicing Obligations. Green Tree agrees to continue to act as
---------------------
servicer of the Contracts, to provide such reports with respect to the Residual
Assets as Finance I and Finance II may reasonably request, and to enter into
such further agreements with Finance I and Finance II or their assignee relating
to such servicing obligations as Finance I and Finance II may reasonably
request.
-2-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GREEN TREE
Green Tree hereby represents and warrants to each of Finance I and Finance
II that:
3.01 Green Tree. Green Tree is a corporation duly organized, validly
----------
existing and in good standing under the laws of Minnesota, with the requisite
corporate power and authority to enter into this Assignment and to perform the
obligations required of it hereunder. The execution and performance of this
Assignment by Green Tree and the consummation of the transactions contemplated
hereby, will not violate any provision of law applicable to Green Tree, and do
not and will not conflict with any of the terms of its Articles of Incorporation
or By-Laws. The execution and performance of this Assignment will not violate
any Pooling and Servicing Agreements; nor will the execution and performance of
this Assignment conflict with any other material agreements of Green Tree which
would result in a material adverse effect on Green Tree.
3.02 Compliance with Contracts and Regulations. Green Tree has complied
-----------------------------------------
with all its obligations under the Contracts and the Pooling and Servicing
Agreements which might affect the validity or enforceability of the Contracts or
the Pooling and Servicing Agreements and the consummation of the transactions
contemplated hereby will not violate any such obligations, laws or regulations.
3.03 Title to the Residual Assets. Green Tree is the sole owner of the
----------------------------
Residual Assets, free and clear of all liens and encumbrances.
ARTICLE IV
MISCELLANEOUS
4.01 Survival of Representations and Warranties. Green Tree covenants and
------------------------------------------
agrees that its representations and warranties in this Assignment, and in any
document delivered or to be delivered pursuant hereto, shall survive the date
hereof.
4.02 Governing Law. The internal law, without regard to conflicts of laws
-------------
principles, of the State of Minnesota will govern all questions concerning the
construction, validity and interpretation of this Assignment and the performance
of the obligations imposed by this Assignment.
-3-
<PAGE>
IN WITNESS WHEREOF, Green Tree has executed this Assignment as of the day
and year first above written.
GREEN TREE FINANCIAL CORPORATION
By
------------------------------
Its
---------------------------
Acknowledged by: GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I
By
------------------------------
Its
---------------------------
Acknowledged by: GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. II
By
------------------------------
Its
---------------------------
-4-
<PAGE>
APPENDIX I
RESIDUAL ASSETS
<TABLE>
<CAPTION>
Transaction Registered
Pooling and Servicing Owner
Name Agreement Residual Asset or Holder
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
GTFC 1993-4 December 1, 1993 Class C
Certificate
GTFC 1993-3 September 1, 1993 Class C GTFC-Two
Certificate
GTFC 1993-2 June 1, 1993 Class C GTFC-Two
Certificate
GTFC 1993-1 March 1, 1993 Class C GTFC-Two
Certificate
GTFC 1992-2 December 1, 1992 Class C GTFC-Two
Certificate
GTFC 1992-1 September 1, 1992 Class C GTFC-Two
Certificate
MLMI 1992D June 1, 1992 Class C GTFC-Two
Certificate
MLMI 1992B March 1, 1992 Class C GTFC-Two
Certificate
MLMI 1991I December 1, 1991 Class C Home Owners
Certificate Pool
MLMI 1991G September 1, 1991 Class C GTFC-Two, as
Certificate agent for
GTFC-Two and
Home Owners
Pool
MLMI 1991D June 1, 1991; Class C MaHCS
amended Certificate
February 13, 1992
MLMI 1991B March 1, 1991 Class C GTFC-Two
Certificate
MLMI 1990I December 1, 1990 Class C GTFC-Two
Certificate
MLMI 1990G September 1, 1990 Class C GTFC-Two
Certificate
MLMI 1990D June 1, 1990 Class C GTFC-Two
Certificate
MLMI 1990B March 1, 1990 Class C GTFC-Two
Certificate
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
MLMI 1989H December 1, 1989; Class C MaHCS
amended January Certificate
29,
1990; June 20,
1990;
February 13, 1992
MLMI 1989F October 1, 1989; Class C GTFC-Two
amended Certificate
February __, 1994
MLMI 1989D June 1, 1989 Class C GTFC-Two
Certificate
MLMI 1989B March 1, 1989 Class D GTFC-Two
Certificate
MLMI 1988X December 1, 1988 Class C Green Tree
Certificate
MLMI 1988Q September 1, 1988 Class C Green Tree
Certificate Acceptance,
Inc.
MLMI 1988H June 1, 1988 Class C Green Tree
Certificate
MLMI 1988E March 1, 1988; Limited Green Tree
amended Guarantee
February __, 1994 Fee and amunts
remaining in
Certifi-
cate Account
upon
termination
MLMI 1987C December 1, 1987; Limited MaHCS
amended May 6, 1991; Guarantee
February 13, Fee and amounts
1992; remaining in
February __, 1994 Certifi-
cate Account
upon
termination
MLMI 1987B October 1, 1987; Limited MaHCS
amended May 6, 1991; Guarantee
February 13, 1992; Fee and amounts
February __, 1994 remaining in
Certi-
cate Account
upon
termination
</TABLE>
I-2
<PAGE>
EXHIBIT A
FORM OF TRUSTEE NOTIFICATION
<PAGE>
EXHIBIT B
INSIDE REFINANCING AND REPURCHASE PAYMENT FACTORS
(See attached)
<PAGE>
Exhibit 4.4
TRANSFER AGREEMENT
THIS TRANSFER AGREEMENT (the "Agreement"), dated as of January 1, 1994,
is made and entered into between Green Tree Manufactured Housing Net Interest
Margin Finance Corp. I, a Delaware corporation ("Finance I"), Green Tree
Manufactured Housing Net Interest Margin Finance Corp. II, a Delaware
corporation ("Finance II"), and Green Tree Securitized Net Interest Margin
Trust, 1994-A, a Delaware business trust (the "Trust") created pursuant to a
Trust Agreement dated as of January 1, 1994, among Finance I, Finance II and
Wilmington Trust Company, a Delaware banking corporation, as Trustee (the
"Trustee").
WHEREAS, pursuant to a Residual Assets Assignment, dated as of January 1,
1994, made by Green Tree Financial Corporation, a Minnesota corporation
("Green Tree") in favor of Finance I, and Finance II (the "Residual Assets
Assignment"), Finance I and Finance II are the owners of certain residual
interests (the "Residual Assets") in the "real estate mortgage investment
conduits" ("REMICs") identified in Appendix I attached hereto. (All
capitalized terms used herein and not otherwise defined have the meanings
assigned to them in the Residual Assets Assignment.)
WHEREAS, pursuant to the terms and conditions set forth herein, Finance I
and Finance II desire to transfer the Residual Assets to the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
ASSIGNMENT OF RESIDUAL ASSETS
1.01 Residual Assets. Subject to and upon the terms and conditions set
---------------
forth in this Agreement, Finance I and Finance II, as a contribution of capital,
hereby transfer, assign and deliver to the Trust their right, title and interest
in each of the Residual Assets, effective February 15, 1994. In order to effect
such transfer, Finance I and Finance II shall (i) with respect to all Residual
Assets evidenced by certificates, deliver to or upon the order of the Trust such
certificates, duly endorsed by Finance I and Finance II; and (ii) with respect
to all Residual Assets not evidenced by certificates, deliver to the Trustee of
the related Securitized Pool a written notification substantially in the form
attached hereto as Exhibit A.
1.02 Rights Under Residual Assets Assignment. Subject to and upon the
---------------------------------------
terms and conditions set forth in this Agreement, as part of the foregoing
transfer, Finance I and Finance II hereby assign to the Trust all their rights
under the
<PAGE>
Residual Assets Assignment, including but not limited to the obligation of
Green Tree to make Inside Refinancing Payments and Repurchase Payments and the
obligation of Green Tree to continue to act as servicer of the Contracts.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FINANCE I AND FINANCE II
Finance I and Finance II hereby represent and warrant to the Trust that:
2.01 Finance I and Finance II. Finance I and Finance II are corporations
------------------------
duly organized, validly existing and in good standing under the laws of
Delaware, with the requisite corporate power and authority to enter into this
Agreement and to perform the obligations required of them hereunder. The
execution and performance of this Agreement by Finance I and Finance II and the
consummation of the transactions contemplated hereby, will not violate any
provision of law applicable to Finance I and Finance II, and do not and will not
conflict with any of the terms of their Certificate of Incorporation or By-Laws.
The execution and performance of this Agreement will not conflict with any
material agreements of Finance I and Finance II that would result in a material
adverse effect on Finance I and Finance II.
2.02 Title to the Residual Assets. Finance I and Finance II are the sole
----------------------------
owners of the Residual Assets, free and clear of all liens and encumbrances.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust hereby represents and warrants to Finance I and Finance II that:
3.01 Effective Agreement. The Trust is a business trust duly organized,
-------------------
validly existing and in good standing under the laws of the State of Delaware,
with the requisite power and authority to enter into this Agreement and to
perform the obligations required of it hereunder. The execution and performance
of this Agreement by the Trust and the consummation of the transactions
contemplated hereby will not violate any provision of law applicable to the
Trust, and do not and will not conflict with the terms of any governing
instrument relating to the conduct of its business, or of any other material
agreements to which the Trust is a party or by which it may be bound.
-2-
<PAGE>
ARTICLE IV
MISCELLANEOUS
4.01 Survival of Representations and Warranties. Each party hereto
------------------------------------------
covenants and agrees that its representations and warranties in this Agreement,
and in any document delivered or to be delivered pursuant hereto, shall survive
the date hereof.
4.02 Notices. All notices and other communications to be given or
-------
delivered under or by reason of the provisions of this Agreement shall be in
writing and delivered or mailed to the parties hereto at the appropriate
following address:
(a) If to Finance I, to:
Green Tree Manufactured Housing Net Interest Margin
Finance Corp. I
Registered Agent: The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Telephone Number:
Telecopier Number:
(b) If to Finance II, to:
Green Tree Manufactured Housing Net Interest Margin
Finance Corp. II
Registered Agent: The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Telephone Number:
Telecopier Number:
(c) If to the Trust, to:
Green Tree Securitized Net Interest Margin Trust, 1994-A
In care of Wilmington Trust Company
Attention: Corporate Trust Administration
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Telephone Number: (302) 651-8653
Telecopier Number: (302) 651-8862
-3-
<PAGE>
or to such other address as Finance I, Finance II or the Trust shall have
specified to the others in writing.
4.03 Amendment and Waiver. This Agreement may be amended or modified, and
--------------------
any of the terms, covenants, representations, warranties or conditions hereof
may be waived, only by a written instrument executed by the Trust and Finance I
or Finance II, as applicable, or in the case of a waiver, by the party waiving
compliance. Any waiver by any party of any condition, or of the breach of any
provision, term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall not be deemed or construed as
further or continuing waiver of any such condition, or of the breach of any
other provision, term, covenant, representation or warranty of this Agreement.
4.04 Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
4.05 Entire Agreement. This Agreement constitutes the entire Agreement
----------------
between the parties with respect to the subject matter hereof. The invalidity
of any provision hereof shall not affect the validity of any other provision.
4.06 Binding Effect. This Agreement and all the provisions hereof shall
--------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties hereto and
their respective successors and assigns, any rights, obligations, remedies or
liabilities.
4.07 Headings. The headings herein are for purposes of reference only and
--------
shall not otherwise affect the meaning or interpretation of any provision
hereof.
4.08 Governing Law. The internal law, without regard to conflicts of laws
-------------
principles, of the State of Minnesota will govern all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement.
4.09 Limitation of Trustee's Liability. Notwithstanding anything
---------------------------------
contained herein to the contrary, this instrument has been countersigned by
Wilmington Trust Company not in its individual capacity but solely in its
capacity as Trustee of the Trust and in no event shall Wilmington Trust Company
in its individual capacity, or any beneficial owner of the Trust, have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Trust
-4-
<PAGE>
hereunder, as to all of which recourse shall be had solely to the assets of the
Trust. For all purposes of this Agreement, in the performance of any duties or
obligations of the Trust hereunder, the Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I
By
-------------------------
Its
----------------------
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. II
By
-------------------------
Its
----------------------
GREEN TREE SECURITIZED NET
INTEREST MARGIN TRUST 1994-A
By Wilmington Trust Company,
not in its individual
capacity but solely as
Trustee
By
------------------------
Its
---------------------
-6-
<PAGE>
APPENDIX I
RESIDUAL ASSETS
<TABLE>
<CAPTION>
Registered
Transaction Pooling and Servicing Owner
Name Agreement Residual Asset or Holder
- ----------- --------------------- -------------- ------------
<S> <C> <C> <C>
GTFC 1993-4 December 1, 1993 Class C Certificate GTFC-Two
GTFC 1993-3 September 1, 1993 Class C Certificate GTFC-Two
GTFC 1993-2 June 1, 1993 Class C Certificate GTFC-Two
GTFC 1993-1 March 1, 1993 Class C Certificate GTFC-Two
GTFC 1992-2 December 1, 1992 Class C Certificate GTFC-Two
GTFC 1992-1 September 1, 1992 Class C Certificate GTFC-Two
MLMI 1992D June 1, 1992 Class C Certificate GTFC-Two
MLMI 1992B March 1, 1992 Class C Certificate GTFC-Two
MLMI 1991I December 1, 1991 Class C Certificate Home Owners
Pool
MLMI 1991G September 1, 1991 Class C Certificate GTFC-Two, as
agent for GTFC-
Two and Home
Owners Pool
MLMI 1991D June 1, 1991; amended Class C Certificate MaHCS
February 13, 1992
MLMI 1991B March 1, 1991 Class C Certificate GTFC-Two
MLMI 1990I December 1, 1990 Class C Certificate GTFC-Two
MLMI 1990G September 1, 1990 Class C Certificate GTFC-Two
MLMI 1990D June 1, 1990 Class C Certificate GTFC-Two
MLMI 1990B March 1, 1990 Class C Certificate GTFC-Two
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
MLMI 1989H December 1, 1989; Class C Certificate MaHCS
amended January 29,
1990; June 20, 1990;
February 13, 1992
MLMI 1989F October 1, 1989; Class C Certificate GTFC-Two
amended February __,
1994
MLMI 1989D June 1, 1989 Class C Certificate GTFC-Two
MLMI 1989B March 1, 1989 Class D Certificate GTFC-Two
MLMI 1988X December 1, 1988 Class C Certificate Green Tree
MLMI 1988Q September 1, 1988 Class C Certificate Green Tree
Acceptance, Inc.
MLMI 1988H June 1, 1988 Class C Certificate Green Tree
MLMI 1988E March 1, 1988; Limited Guarantee Green Tree
amended February __, Fee and amounts
1994 remaining in Certifi-
cate Account upon
termination
MLMI 1987C December 1, 1987; Limited Guarantee MaHCS
amended May 6, 1991; Fee and amounts
February 13, 1992; remaining in Certifi-
February __, 1994 cate Account upon
termination
MLMI 1987B October 1, 1987; Limited Guarantee MaHCS
amended May 6, 1991; Fee and amounts
February 13, 1992; remaining in Certifi-
February __, 1994 cate Account upon
termination
</TABLE>
I-2
<PAGE>
EXHIBIT A
FORM OF NOTIFICATION TO SECURITIZED POOL TRUSTEES
[To be added]
A-1
<PAGE>
Exhibit 4.5
LIMITED RECOURSE NOTE
$[Principal Amount] St. Paul, Minnesota
March__, 1994
FOR VALUE RECEIVED, Green Tree Manufactured Housing Net Interest Margin
Finance Corp. I ("Maker") hereby promises to pay to the order of Green Tree
Securitized Net Interest Margin Trust 1994-A or its successors or assigns, as
the case may be ("Payee"), at St. Paul, Minnesota, or such other place as the
Payee may from time to time designate in writing, the principal sum of _____
Dollars ($_____) (the "Principal Amount"), with interest (computed on the
basis of a 360-day year of twelve 30-day months) at the rate of _____ percent
(__%) per annum on the unpaid balance hereof until the Maturity Date (as
defined below). All payments from whatever source shall be first applied to
interest and then to principal.
Accrued interest shall be payable on the 15th day (or if such day is not a
business day, the next succeeding business day) of each month, commencing on
March 15, 1994, and continuing on the same day in each succeeding month. The
principal due and payable on the Note prior to the Maturity Date shall be equal
to all collections on the Fee Assets remitted to Maker on such Distribution
Date, minus the accrued interest payable on such installment date.
1. Definitions.
-----------
All terms defined in the Trust Agreement or the Fee Assets Assignment (each
as defined below) shall have the same meaning in this Note. Whenever
capitalized and used in this Note, the following words and phrases, unless
otherwise specified, shall have the following meanings:
Fee Assets. The Fee Assets shall have the meaning set forth in that
----------
certain Fee Assets Assignment, dated as of January 1, 1994, made by Green Tree
in favor of Maker.
Fee Assets Assignment. The Fee Assets Assignment, dated as of January 1,
---------------------
1994, made by Green Tree in favor of Maker, which transfers the Fee Assets to
Maker.
Green Tree. Green Tree Financial Corporation, a Minnesota corporation, in
----------
its individual capacity and as seller of the Fee Assets to Maker.
<PAGE>
Maturity Date. The earliest to occur of:
-------------
(i) A declaration by Payee pursuant to Section 3 of this Note that the
unpaid balance of the Principal Amount and any unpaid interest accrued thereon
is immediately due and payable;
(ii) A written declaration by Maker pursuant to the terms hereof
that it desires to prepay this Note; and
(iii) The Distribution Date occurring in February 2004.
Note. This Limited Recourse Note, as the same may from time to time be
----
amended.
Trust Agreement. The Trust Agreement, dated as of January 1, 1994, among
---------------
Maker, Green Tree Manufactured Housing Net Interest Margin Finance Corp. II and
Wilmington Trust Company, as Trustee.
2. Prepayment; Payment.
--------------------
2.1 Maker shall have the right to prepay this Note in whole but not in
part, including all accrued but unpaid interest thereon, without penalty or
premium, at any time after the unpaid principal amount hereof has been reduced
to 10% of the original principal amount hereof.
2.2 Maker shall pay the unpaid balance of the Principal Amount on the
Maturity Date.
3. Default.
-------
3.1 An Event of Default means one of the following events:
(a) default in the payment of interest due on any Distribution Date, and
continuance of such default for a period of six months (allocated as provided in
Section 3.2); or
(b) failure to pay the entire Principal Amount on or before the
Distribution Date occurring in February 2004.
3.2 All payments applied to interest on this Note shall be deemed
allocated first to interest unpaid with respect to all prior Distribution Dates
(with interest accrued on the earliest Distribution Date being deemed paid
first), and then to interest accrued with respect to the current Distribution
Date.
-2-
<PAGE>
3.3 If an Event of Default shall have occurred and be continuing, Payee
may, at Payee's option, declare the unpaid balance of the Principal Amount and
any unpaid interest accrued thereon immediately due and payable.
4. Covenants.
---------
Maker hereby covenants that all collections from the Fee Assets remitted to
Maker by Green Tree pursuant to the terms of the Fee Assets Assignment will be
used to make timely payments of principal and interest on the Note.
5. Nonrecourse.
-----------
Notwithstanding the provisions of this Note, the Trust Agreement or any
other document, this Note is a limited recourse obligation of Maker, and the
payment of principal of or interest on the indebtedness evidenced hereby is
payable solely from the Fee Assets, and Payee, by acceptance hereof, agrees to
look solely to the Fee Assets for payment of such principal and interest. The
foregoing shall not be deemed or construed to be a release of the indebtedness
evidenced hereby or to in any way impair, limit or otherwise affect this Note,
or any liens created on the Fee Assets as security for the payment of
indebtedness evidenced or secured hereby and for the performance of the
covenants in this Note, or prevent Payee from naming Maker, its successors or
assigns, as a defendant in any action to enforce any remedy for an Event of
Default, for payment of any such principal or interest, except as expressly
provided herein.
6. Grant of Security Interest. To secure payment of this Note, Maker has
--------------------------
granted to Payee a security interest in the Fee Assets pursuant to the terms of
the Security Agreement, dated as of March __, 1994, between Maker and Payee (the
"Security Agreement").
7. Miscellaneous.
-------------
7.1 Maker hereby waives presentment for payment, notice of dishonor,
protest and notice of protest and, in the Event of Default hereunder, Maker
agrees to pay all costs of collection, including reasonable attorneys' fees.
7.2 No failure or delay by Payee to exercise any right or remedy under
this Note shall waive such right or remedy.
7.3 This Note shall be governed by the laws of the State of Minnesota.
-3-
<PAGE>
IN WITNESS WHEREOF, Maker has executed this Note as of the date first above
written.
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I
By
-----------------------------
Title:
-4-
<PAGE>
Exhibit 4.6
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (the "Agreement"), dated as of January 1, 1994,
is made and entered into between Green Tree Financial Corporation, a Minnesota
corporation, as Servicer ("Green Tree" or the "Servicer") and Green Tree Net
Interest Margin Trust 1994-A (the "Trust"), created pursuant to the Trust
Agreement among Green Tree Manufactured Housing Net Interest Margin Finance
Corp. I ("Finance I"), Green Tree Net Interest Margin Finance Corp. II
("Finance II") and Wilmington Trust Company, a Delaware banking corporation,
as Trustee (the "Trustee"). All terms defined in the Fee Assets Assignment,
the Residual Assets Assignment, the Transfer Agreement or the Trust Agreement
(each as defined below) shall have the same meaning in this Agreement.
WHEREAS, pursuant to that certain Fee Assets Assignment dated as of January
1, 1994 (the "Fee Assets Assignment"), made by Green Tree in favor of Finance I,
Green Tree has transferred its right to receive the Fee Assets (as defined in
such Fee Assets Assignment) to Finance I.
WHEREAS, pursuant to that certain Residual Assets Assignment dated as of
January 1, 1994 (the "Residual Assets Assignment"), made by Green Tree in favor
of Finance I and Finance II, Green Tree has transferred the Residual Assets (as
defined in such Residual Assets Assignment) to Finance I and Finance II.
WHEREAS, pursuant to that certain Transfer Agreement dated as of January 1,
1994 (the "Transfer Agreement"), among Finance I, Finance II and the Trust,
Finance I and Finance II have transferred the Residual Assets to the Trust.
WHEREAS, Finance I has issued to the Trust that certain Limited Recourse
Note dated March __, 1994, payable solely from collections on the Fee Assets.
WHEREAS, pursuant to the Fee Assets Assignment and the Residual Assets
Assignment, Green Tree, in its capacity as Servicer of the Contracts, has agreed
to enter into this Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, Green Tree and the Trust agree as provided herein:
<PAGE>
ARTICLE I
REPORTS AND TAX MATTERS
1.01 Monthly Reports.
---------------
(a) No later than three business days prior to each Distribution Date, the
Servicer shall deliver to the Trustee, the Administrator, the Paying Agent (if
different from the Administrator) and to each Rating Agency, a "Monthly Report"
with respect to the Securitized Net Interest Margin Certificates substantially
in the form of Exhibit A attached hereto.
(b) No later than three business days prior to each Distribution Date, the
Servicer shall deliver to the Trustee and the Administrator copies of each
"Monthly Report" prepared by it with respect to each of the Securitized Pools
giving rise to the Fee Assets and the Residual Assets.
(c) [No later than three business days prior to each Distribution Date,
the Servicer shall deliver to the Trustee and the Administrator copies of any
monthly reports prepared by it with respect to the GNMA Pools giving rise to the
GNMA Excess Spread.]
1.02 Annual Report of Accountants. On or before May 1 of each year,
----------------------------
commencing May 1, 1995, the Servicer at its expense shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee to the effect
that such firm has examined certain documents and records relating to the
servicing of manufactured housing conditional sales contracts under pooling and
servicing agreements substantially similar one to another (such statement to
have attached thereto a schedule setting forth the pooling and servicing
agreements covered thereby including at least one of the Securitized Pools) and
that, on the basis of such examination, conducted substantially in compliance
with generally accepted auditing standards, such servicing has been conducted in
compliance with such pooling and servicing agreements, except for such
significant exceptions or errors in records that, in the opinion of such firm,
generally accepted auditing standards requires it to report.
ARTICLE II
MISCELLANEOUS
2.01 Survival of Representations and Warranties. Each party hereto
------------------------------------------
covenants and agrees that its representations and warranties in this Agreement,
and in any document delivered or to be delivered pursuant hereto, shall survive
the date hereof.
-2-
<PAGE>
2.02 Notices. All notices and other communications to be given or
-------
delivered under or by reason of the provisions of this Agreement shall be in
writing and delivered or mailed to the parties hereto at the appropriate
following address:
(a) If to Green Tree, to:
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (612) 293-5746
(b) If to the Trustee, to:
Wilmington Trust Company
Attention: Corporate Trust Administration
Rodney Square North
1100 North Market Square
Wilmington, Delaware 19890-0001
Telecopier Number: (302) 657-8882
(c) If to the Administrator/Paying Agent, to:
First Trust National Association
Attention: Corporate Trust Operations
180 East 5th Street, Second Floor
St. Paul, Minnesota 55101
Telecopier Number:
------------
or to such other address as Green Tree, the Trustee or the Administrator/Paying
Agent shall have specified to the others in writing.
2.03 Amendment and Waiver. This Agreement may be amended or modified, and
--------------------
any of the terms or conditions hereof may be waived, only by a written
instrument executed by Green Tree or the Trustee, as applicable, or in the case
of a waiver, by the party waiving compliance. Any waiver by any party of any
condition, or of the breach of any provision, term, covenant, representation or
warranty contained in this Agreement, in any one or more instances, shall not be
deemed or construed as further or continuing waiver or any such condition, or of
the breach of any other provision, term, covenant, representation or warranty of
this Agreement.
2.04 Assignment. This Agreement and all of the provisions hereof will be
----------
binding upon and inure to the benefit of the parties hereto and their
-3-
<PAGE>
respective successors and permitted assigns, except that neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned by any
party hereto without the prior written consent of the other parties hereto.
2.05 Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
2.06 Entire Agreement. This Agreement constitutes the entire Agreement
----------------
between the parties with respect to the subject matter hereof. The invalidity
of any provision hereof shall not affect the validity of any other provision.
2.07 Binding Effect. This Agreement and all the provisions hereof shall
--------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties hereto and
their respective successors and assigns, any rights, obligations, remedies or
liabilities.
2.08 Headings. The headings herein are for purposes of reference only and
--------
shall not otherwise affect the meaning or interpretation of any provision
hereof.
2.09 Governing Law. The internal law, without regard to conflicts of laws
-------------
principles, of the State of Minnesota will govern all questions concerning the
construction, validity and interpretation of this Agreement and the performance
of the obligations imposed by this Agreement.
2.10 Limitation of Trustee's Liability. Notwithstanding anything
---------------------------------
contained herein to the contrary, this instrument has been countersigned by
Wilmington Trust Company not in its individual capacity but solely in its
capacity as Trustee of the Trust and in no event shall Wilmington Trust Company
in its individual capacity, or any beneficial owner of the Trust, have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Trust hereunder, as to all of which recourse shall be had
solely to the assets of the Trust. For all purposes of this Agreement, in the
performance of any duties or obligations of the Trust hereunder, the Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Articles VI, VII and VIII of the Trust Agreement.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GREEN TREE FINANCIAL CORPORATION,
AS SERVICER
By
---------------------------------
Its
----------------------------
GREEN TREE NET INTEREST MARGIN
TRUST 1994-A
By Wilmington Trust Company,
not in its individual capacity but solely
as Trustee
By
---------------------------------
Its
----------------------------
-5-
<PAGE>
EXHIBIT A
FORM OF MONTHLY REPORT
----------------------
(See Attached)
-6-
<PAGE>
Exhibit 4.7
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement"), dated as of March __,
1994, is made and entered into between Green Tree Manufactured Housing Net
Interest Margin Finance Corp. I, a Delaware corporation ("Finance I") and
Green Tree Net Securitized Interest Margin Trust, 1994-A, a Delaware business
trust (the "Trust"), created pursuant to a Trust Agreement dated as of January
1, 1994 (the "Trust Agreement"), among Finance I, Green Tree Manufactured
Housing Net Interest Margin Finance Corp. Ii, a Delaware corporation ("Finance
II"), and Wilmington Trust Company, a Delaware banking corporation, as Trustee
(the "Trustee").
WHEREAS, pursuant to a Fee Assets Assignment made by Green Tree
Financial Corporation, a Minnesota corporation ("Green Tree") in favor of
Finance I, dated as of January 1, 1994 (the "Fee Assets Assignment"), Finance
I is the owner of the right to receive certain Guarantee Fees, certain
Excess Servicing Fees and certain GNMA Excess Spread (collectively, the "Fee
Assets"). (All terms defined in the Fee Assets Assignment or the Trust
Agreement shall have the same meaning in this Agreement.)
WHEREAS, Finance I has issued to the Trust a limited recourse note
dated as of March __, 1994, in the amount of $_____________ (the "Finance I
Note").
WHEREAS, the Finance I Note is payable solely from the Fee Assets, and
Finance I wishes to grant to the Trust a security interest in the Fee Assets and
to assign certain rights that Finance I holds under the Fee Assets Assignment to
secure the full and timely payment under the Finance I Note.
NOW, THEREFORE, in consideration of the mutual covenants and agree-
ments set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Finance I hereby agrees as follows for the benefit of the Trust:
ARTICLE I
SECURITY INTEREST
1.01 Grant of Security Interest. Finance I hereby grants to the
--------------------------
Trust a security interest in the collateral described in Section 1.02 (the
"Collateral") and the proceeds therefrom to secure payment to the Trust of all
of Finance I's liabilities and indebtedness to the Trust under the Finance I
Note, whether such liabilities or indebtedness are due or to become due,
absolute or contingent, joint or several, now existing or hereafter arising
(the "Secured Obligations").
<PAGE>
1.02 Description of Collateral. The collateral shall consist of (i)
-------------------------
the Guarantee Fees identified on Appendix I hereto; (ii) the Excess Servicing
Fees identified on Appendix II hereto; and (iii) the GNMA Excess Spread (as
defined in the Fee Assets Assignment) payable with respect to the GNMA Pools
identified on Appendix III hereto, and (iv) Finance I's right to receive
Inside Refinancing Payments and Repurchase Payments under the Fee Assets
Assignment.
1.03 Collections on Fee Assets. Finance I will instruct the
-------------------------
Trustee of each Securitized Pool to pay all Guarantee Fees and Excess
Servicing Fees directly to the Trust, by a written notification in the form of
Exhibit A hereto. Finance I will instruct the Custodian holding the Custodial
Account with respect to the GNMA Pools to pay all GNMA Excess Spread to the
Trust, by a written notification in the form of Exhibit B hereto.
1.04 Obligations of Finance I. During the term of this agreement,
------------------------
Finance I will comply with each of the following covenants and commitments:
(a) Records and Inspections. Finance I will keep accurate books,
-----------------------
records and accounts with respect to the Collateral, and will make the same
available to Trust at its request for examination during normal business
hours; and
(b) Maintenance of Security Interest. Finance I will at any time
--------------------------------
or times hereafter execute such financing statements and other instruments and
perform such acts as the Trust may request to establish and maintain a valid
security interest in the Collateral, and will pay all costs of filing and
recording.
1.05 No Trust Liability on Collateral. It is understood that the
--------------------------------
Trust does not in any way assume any of Finance I's obligations under any of
the Collateral. Finance I hereby agrees to indemnify the Trust against all
liability arising in connection with or on account of any of the Collateral,
except for any liabilities arising on account of the Trust's gross negligence
or willful misconduct.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FINANCE I
Finance I hereby represents and warrants to the Trust that:
2.01 Finance I. Finance I is a corporation duly organized, validly
---------
existing and in good standing under the laws of Delaware, with the requisite
corporate power and authority to enter into this Agreement and to perform the
obligations required of it hereunder. The execution and performance of this
Agreement by Finance I and the consummation of the transactions contemplated
hereby, will not violate any provision of law applicable to Finance I, and do
not and will not conflict with any of the terms of its Certificate of
Incorporation or By-Laws.
-2-
<PAGE>
The execution and performance of this Agreement will not conflict with any
material agreements of Finance I that would result in a material adverse
effect on Finance I.
2.02 Title to the Collateral. Finance I is the sole owner of the Fee
-----------------------
Assets pledged as collateral pursuant to Article I of this Agreement, free and
clear of all liens and encumbrances.
ARTICLE III
DEFAULT
3.01 Rights upon an Event of Default. If the Finance I Note has been
-------------------------------
declared due and payable following an Event of Default, the Trustee or
Certificate Owners beneficially owning at least 25% of the aggregate outstanding
principal amount of the Senior Certificates may liquidate all or any portion of
the Collateral, or may elect to maintain possession of the Collateral and
continue to apply collections from the Collateral as if there had been no
declaration of acceleration; provided, however, the Trustee will be prohibited
-------- -------
from selling the Collateral following an Event of Default, unless:
(a) the holders of all the outstanding Senior Certificates consent to such
sale; or
(b) the proceeds of such sale are sufficient to pay in full the principal
of and the accrued interest on the Finance I Note at the time of such sale; or
(c) the Trustee determines that the collections on the Collateral will not
be sufficient on an ongoing basis to make all payments of interest on the
Finance I Note as such payments become due and to pay the outstanding principal
amount of the Finance I Note at maturity, and the Trustee obtains the consent of
Certificate Owners beneficially owning 66 2/3% of the aggregate outstanding
amount of the Senior Certificates.
3.02 Distributions. If the Trustee collects any money or property
-------------
pursuant to this Article III, the Trustee shall pay out the money or property in
the following order:
(a) first, all accrued and unpaid interest on the Finance I Note;
(b) second, the outstanding principal amount of the Finance I Note; and
(c) third, any remaining money or property shall be distributed to Finance
I.
-3-
<PAGE>
ARTICLE IV
MISCELLANEOUS
4.01 Survival of Representations and Warranties. Each party hereto
------------------------------------------
covenants and agrees that its representations and warranties in this Agreement,
and in any document delivered or to be delivered pursuant hereto, shall survive
the date hereof.
4.02 Notices. All notices and other communications to be given or
-------
delivered under or by reason of the provisions of this Agreement shall be in
writing and delivered or mailed to the parties hereto at the appropriate
following address:
(a) If to Finance I, to:
Green Tree Manufactured Housing Net Interest Margin
Finance Corp. I
Registered Agent: The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Telephone Number:
Telecopier Number:
(b) If to the Trust, to:
Green Tree Securitized Net Interest Margin Trust, 1994-A
In care of Wilmington Trust Company
Attention: Corporate Trust Administration
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Telephone Number: (302) 651-8653
Telecopier Number: (302) 651-8882
or to such other address as Finance I or the Trust shall have specified to the
other in writing.
4.03 Amendment and Waiver. This Agreement may be amended or
--------------------
modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
Trust and Finance I, or in the case of a waiver, by the party waiving
compliance. Any waiver by any party of any condition, or of the breach of any
provision, term, covenant, representation or warranty contained in this
Agreement, in any one or more instances, shall not be deemed or construed as
further or continuing waiver of any
-4-
<PAGE>
such condition, or of the breach of any other provision, term, covenant,
representation or warranty of this Agreement.
4.04 Severability. Whenever possible, each provision of this Agree-
------------
ment will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
4.05 Entire Agreement. This Agreement constitutes the entire Agree-
----------------
ment between the parties with respect to the subject matter hereof. The
invalidity of any provision hereof shall not affect the validity of any other
provision.
4.06 Binding Effect. This Agreement and all the provisions hereof
--------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties hereto and
their respective successors and assigns, any rights, obligations, remedies or
liabilities.
4.07 Headings. The headings herein are for purposes of reference
--------
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
4.08 Governing Law. The internal law, without regard to conflicts
-------------
of laws principles, of the State of Minnesota will govern all questions
concerning the construction, validity and interpretation of this Agreement and
the performance of the obligations imposed by this Agreement.
4.09 Limitation of Trustee's Liability. Notwithstanding anything
---------------------------------
contained herein to the contrary, this instrument has been countersigned by
Wilmington Trust Company not in its individual capacity but solely in its
capacity as Trustee of the Trust and in no event shall Wilmington Trust Company
in its individual capacity, or any beneficial owner of the Trust, have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Trust hereunder, as to all of which recourse shall be had
solely to the assets of the Trust. For all purposes of this Agreement, in the
performance of any duties or obligations of the Trust hereunder, the Trustee
shall be subject to, and entitled to the benefits of, the terms and provisions
of Articles VI, VII and VIII of the Trust Agreement.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
GREEN TREE MANUFACTURED
HOUSING NET INTEREST MARGIN
FINANCE CORP. I
By
-------------------------
Its
----------------------
GREEN TREE SECURITIZED NET
INTEREST MARGIN TRUST 1994-A
By Wilmington Trust Company, not
in its individual capacity but
solely as Trustee
By
-------------------------
Its
----------------------
Acknowledged by: GREEN TREE FINANCIAL CORPORATION
By
-------------------------
Its
----------------------
-6-
<PAGE>
APPENDIX I
GUARANTEE FEES
<TABLE>
<CAPTION>
Designation of
Pooling and Servicing Asset in Pooling
Transaction Agreement and Servicing
Name (or other Agreement Agreement Stated Payee
- ----------- --------------------- ---------------- ------------
<S> <C> <C> <C>
GTFC 1993-3 September 1, 1993 Guarantee Fee Green Tree
GTFC 1993-2 June 1, 1993 Guarantee Fee Green Tree
GTFC 1993-1 March 1, 1993 Guarantee Fee Green Tree
GTFC 1992-2 December 1, 1992 Guarantee Fee Green Tree
GTFC 1992-1 September 1, 1992 Guarantee Fee Green Tree
MLMI 1990G September 1, 1990 Guarantee Fee Green Tree
MLMI 1990D June 1, 1990 Collateral Guarantee Green Tree
Fee
MLMI 1990B March 1, 1990 Collateral Guarantee Green Tree
Fee
MLMI 1989H December 1, 1989; Limited Guarantee MaHCS
amended January 29, Fee
1990; June 20, 1990;
February 13, 1992
MLMI 1989F October 1, 1989; Limited Guarantee Green Tree
amended Fee
February __, 1994
MLMI 1988E March 1, 1988; amended Limited Guarantee Green Tree
February __, 1994 Fee
MLMI 1987C December 1, 1987; Limited Guarantee Green Tree
amended May 6, 1991; Fee
February 13, 1992
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
MLMI 1987B October 1, 1987; Limited Guarantee Green Tree
amended May 6, 1991; Fee
February 13, 1992;
February __, 1994
GT Trust 1987-B June 1, 1987; amended Limited Guarantee Green Tree
July 22, 1987; July 30, Fee
1987; May 6, 1991;
February 13, 1992;
February __, 1994
GT Trust 1987-A March 1, 1987; Limited Guarantee Green Tree
amended May 6, 1991; Fee
February 13, 1992;
February __, 1994
</TABLE>
I-2
<PAGE>
APPENDIX II
SERVICING FEES
<TABLE>
<CAPTION>
Pooling and
Transaction Servicing Servicing Excess
Name Agreement Fee Servicing Fee
- ----------- ----------- --------- -------------
<S> <C> <C> <C>
GTFC 1993-4 December 1, 1993 1.00% 0.50%
GTFC 1993-3 September 1, 1993 1.00% 0.50%
GTFC 1993-2 June 1, 1993 1.00% 0.50%
GTFC 1993-1 March 1, 1993 1.00% 0.50%
GTFC 1992-2 December 1, 1992 1.00% 0.50%
GTFC 1992-1 September 1, 1992 1.00% 0.50%
MLMI 1992D June 1, 1992 1.00% 0.50%
MLMI 1992B March 1, 1992 1.00% 0.50%
MLMI 1991I December 1, 1991 1.00% 0.50%
MLMI 1991G September 1, 1991 1.00% 0.50%
MLMI 1991D June 1, 1991, amended 1.00% 0.50%
February 13, 1992
MLMI 1991B March 1, 1991 1.00% 0.50%
MLMI 1990I December 1, 1990 1.00% 0.50%
MLMI 1990G September 1, 1990 1.00% 0.50%
MLMI 1990D June 1, 1990 1.00% 0.50%
MLMI 1990B March 1, 1990 1.00% 0.50%
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
MLMI 1989H December 1, 1989; 1.00% 0.50%
amended January 29,
1990; June 20, 1990;
February 13, 1992
MLMI 1989F October 1, 1989; amended 1.00% 0.50%
February __, 1994
MLMI 1989D June 1, 1989 1.00% 0.50%
MLMI 1989B March 1, 1989 1.00% 0.50%
MLMI 1988X December 1, 1988 1.00% 0.50%
MLMI 1988Q September 1, 1988 1.00% 0.50%
MLMI 1988H June 1, 1988 1.00% 0.50%
MLMI 1988E March 1, 1988; amended 1.00% 0.50%
February __, 1994
MLMI 1987C December 1, 1987; 1.00% 0.50%
amended May 6, 1991;
February 13, 1992;
February __, 1994
MLMI 1987B October 1, 1987; 1.00% 0.50%
amended May 6, 1991;
February 13, 1992;
February __, 1994
GT Trust 1987-B June 1, 1987; amended 1.50% 1.00%
July 22, 1987; July 30,
1987; May 6, 1991;
February 13, 1992;
February __, 1994
GT Trust 1987-A March 1, 1987; 1.50% 1.00%
amended May 6, 1991;
February 13, 1992;
February __, 1994
</TABLE>
II-2
<PAGE>
APPENDIX III
GNMA POOLS
[Listing of each GNMA Pool]
III-1
<PAGE>
Exhibit 4.8
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated as of January 1, 1994, among GREEN TREE
SECURITIZED NET INTEREST MARGIN TRUST 1994-A, a Delaware business trust (the
"Trust"), FIRST TRUST NATIONAL ASSOCIATION (the "Administrator"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, not in its
individual capacity but solely as trustee (the "Trustee").
WITNESSETH:
WHEREAS, the Trust is issuing _% Securitized Net Interest Margin
Certificates (the "Senior Certificates") and Subordinated Certificates (the
"Subordinated Certificates") pursuant to a Trust Agreement, dated as of
January 1, 1994 (as amended and supplemented from time to time, the "Trust
Agreement"), among GREEN TREE MANUFACTURED HOUSING NET INTEREST MARGIN FINANCE
CORP. I ("Finance I"), GREEN TREE MANUFACTURED HOUSING NET INTEREST MARGIN
FINANCE CORP. II ("Finance II") and the Trustee (capitalized terms not defined
herein shall have the meanings assigned to them in the Trust Agreement);
WHEREAS, the Trust has entered into certain agreements in connection with
the issuance of the Senior Certificates and Subordinated Certificates
representing certain beneficial ownership interests in the Trust, including (i)
the Senior Certificates; (ii) a transfer agreement, dated as of January 1, 1994
among Finance I, Finance II and the Trust (the "Transfer Agreement"); (iii) a
security agreement dated as of January 1, 1994, between Finance I and the Trust
(the "Security Agreement"), granting to the Trust a security interest in certain
collateral to secure a limited recourse note dated March __, 1994, issued by
Finance I to the Trust (the "Finance I Note"); (iv) a servicing agreement, dated
as of January 1, 1994, between the Trust and Green Tree, as Servicer (the
"Servicing Agreement"); (v) a depository agreement among the Trust, the
Administrator and The Depository Trust Company, as the initial Depository, dated
as of the Closing Date (the "Depository Agreement"); (vi) an underwriting
agreement, dated ________, 1994, among GREEN TREE FINANCIAL CORPORATION ("Green
Tree"), Finance I, Finance II, the Trust and the underwriters of the Senior
Certificates (the "Underwriting Agreement"), and (vii) the Trust Agreement
(collectively the "Related Agreements");
WHEREAS, the Related Agreements require the Trust and the Trustee to
perform certain duties in connection with (a) the Senior Certificates and (b)
the Subordinated Certificates;
WHEREAS, the Trust and the Trustee desire to have the Administrator perform
certain of the duties referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and
<PAGE>
the Related Agreements as the Trust and the Trustee may from time to time
request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Trust and the
Trustee on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1. Duties of the Administrator.
---------------------------
(a) Duties with Respect to the Trust Agreement.
------------------------------------------
(i) The Administrator agrees to perform all its duties as
Administrator under the Trust Agreement. In addition, the Administrator shall
consult with the Trustee regarding the Trust's duties under the Trust
Agreement. The Administrator shall monitor the Trust's performance, and shall
advise the Trustee when action is necessary to comply with the Trust's duties
under the Trust Agreement. The Administrator shall prepare for execution by
the Trust, or shall cause other appropriate persons to prepare, all documents,
reports, filings, instruments, certificates and opinions that it shall be the
Trust's duty to prepare, file or deliver pursuant to the Trust Agreement. In
furtherance of the foregoing, the Administrator shall take all actions that it
is the Trust's duty to take pursuant to the Trust Agreement including, without
limitation, all actions required with respect to the following matters under
the Trust Agreement (references are to sections of the Trust Agreement):
(A) the preparation of the Certificates for execution by the
Trustee (Section 3.3);
(B) the preparation of or obtaining of the documents and
instruments required for authentication of the Certificates and delivery of
the same to the Trustee (Section 3.5);
(C) the duty to cause the Certificate Register to be kept and
to give the Trustee notice of any appointment of a new Certificate
Registrar and the location, or change of location, of the Certificate
Register (Section 3.6(a));
(D) the issuance of authenticated new Certificates upon
surrender for transfer of Certificates (Section 3.6(b)), including insuring
that the Certificate surrendered is accompanied by an acceptable written
instrument of transfer (Section 3.6(d));
-2-
<PAGE>
(E) the notification of Certificate Owners that the Depository
is no longer willing or able properly to discharge its responsibilities
as Depository, and the issuance of Definitive Certificates to Certificate
Owners who request them (Section 3.6(h));
(F) the delivery to the Depository of the four typewritten
Senior Certificates registered in the name of the Depository's nominee,
Cede & Co., (Section 3.6(i));
(G) the preparation of replacement Certificates for ones
mutilated, destroyed, lost or stolen (Section 3.7);
(H) the duty to furnish the Depositor with a list of the names
and addresses of the Senior Certificateholders as of the most recent
Record Date for the payment of distributions, and to provide Senior
Certificateholders with access to a current list of Senior
Certificateholders (Section 3.9);
(J) the maintenance of an office or agency where Certificates
may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Trustee in respect of the Certificates
and the Related Documents may be served (Section 3.10);
(K) the establishment and maintenance of the Certificate
Account (Section 5.1(a));
(L) the establishment of a new Certificate Account if the
prior one ceases to be an Eligible Account (Section 5.1(b));
(M) the duty to invest amounts in the Certificate Account in
Eligible Investments (Section 5.1(c));
(N) the distribution to Certificateholders of amounts deposited
in the Certificate Account on each Distribution Date, in accordance with
the priorities listed in the Trust Agreement (Sections 5.2(a)-(c));
(O) the distribution of the Servicer's report to holders of
Senior Certificates and to Green Tree (if Green Tree is not the Servicer)
(Section 5.2(d));
(P) the provision of reports to each Rating Agency and to the
Subordinated Certificateholders (Section 5.2(e));
-3-
<PAGE>
(Q) the mailing of written notices to the Senior Certificate-
holders specifying prepayment of the Senior Certificates (Sections
5.6(c)-(d));
(R) the provision to the Certificate Owners upon receipt of
written request of duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and other
instruments furnished to the Trustee under the Related Documents (Section
7.2);
(S) the duty to make distributions following a default in
accordance with the priorities listed in the Trust Agreement (Section 9.3);
(ii) The Administrator will:
(A) pay the Trustee from time to time reasonable compensation
for all services rendered by the Trustee under the Trust Agreement (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(B) except as otherwise expressly provided in the Trust Agree-
ment, reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of the Trust Agreement (including the reasonable
compensation, expenses and disbursements of its agents and counsel),
except for any expense, disbursement or advance that may be attributable
to the Trustee's gross negligence or bad faith; and
(C) indemnify the Trustee and its officers, directors,
employees and agents for, and hold them harmless against, any losses,
liabilities or expenses incurred without negligence or bad faith on their
part, that arise out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement,
including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of their powers or duties under the Trust Agreement.
(b) Duties with Respect to the Security Agreement.
---------------------------------------------
(i) The Administrator agrees to perform all its duties as
Administrator under the Security Agreement. In addition, the Administrator
shall consult with the Trustee regarding the Trust's duties under the Security
Agreement. The Administrator shall monitor the Trust's performance, and shall
advise the
-4-
<PAGE>
Trustee when action is necessary to comply with the Trust's duties under the
Security Agreement. The Administrator shall prepare for execution by the Trust,
or shall cause other appropriate persons to prepare, all documents, reports,
filings, instruments, certificates and opinions that it shall be the Trust's
duty to prepare, file or deliver pursuant to the Security Agreement. In
furtherance of the foregoing, the Administrator shall take all actions that it
is the Trust's duty to take pursuant to the Security Agreement including,
without limitation, all actions required with respect to the following matters
under the Security Agreement (references are to sections of the Security
Agreement):
(A) pay out money or property that the Trustee collects
following a declaration of default, in the order specified in the
Security Agreement (Section 3.02).
(ii) The Administrator will:
(A) pay the Trustee from time to time reasonable compensation
for all services rendered by the Trustee under the Security Agreement
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(B) except as otherwise expressly provided in the Security
Agreement, reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of the Security Agreement (including the
reasonable compensation, expenses and disbursements of its agents and
counsel), except for any expense, disbursement or advance that may be
attributable to the Trustee's negligence or bad faith; and
(C) indemnify the Trustee and its officers, directors,
employees and agents for, and hold them harmless against, any losses,
liabilities or expenses incurred without negligence or bad faith on their
part, that arise out of or in connection with the acceptance or
administration of the transactions contemplated by the Security
Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties under the Security
Agreement.
(c) Duties with Respect to the Depository Agreement.
-----------------------------------------------
(i) The Administrator agrees to perform all its duties as
Administrator under the Depository Agreement. In addition, the Administrator
shall consult with the Trustee regarding the Trust's duties under the
Depository
-5-
<PAGE>
Agreement. The Administrator shall monitor the Trust's performance, and shall
advise the Trustee when action is necessary to comply with the Trust's duties
under the Depository Agreement. The Administrator shall prepare for execution
by the Trust, or shall cause other appropriate persons to prepare, all
documents, reports, filings, instruments, certificates and opinions that it
shall be the Trust's duty to prepare, file or deliver pursuant to the Depository
Agreement. In furtherance of the foregoing, the Administrator shall take all
actions that it is the Trust's duty to take pursuant to the Depository
Agreement.
(ii) The Administrator will:
(A) pay the Trustee from time to time reasonable compensation
for all services rendered by the Trustee under the Depository Agreement
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(B) except as otherwise expressly provided in the Depository
Agreement, reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of the Depository Agreement (including the
reasonable compensation, expenses and disbursements of its agents and
counsel), except for any expense, disbursement or advance that may be
attributable to the Trustee's negligence or bad faith; and
(C) indemnify the Trustee and its officers, directors,
employees and agents for, and hold them harmless against, any losses,
liabilities or expenses incurred without negligence or bad faith on their
part, that arise out of or in connection with the acceptance or
administration of the transactions contemplated by the Depository
Agreement, including the reasonable costs and expenses of defending
themselves against any claim or liability in connection with the exercise
or performance of any of their powers or duties under the Depository
Agreement.
(d) Additional Duties.
-----------------
(i) In addition to the duties of the Administrator set forth above,
the Administrator shall perform such calculations and shall prepare or cause
other appropriate persons to prepare, for the Trust or the Trustee to execute,
all documents, reports, filings, instruments, certificates and opinions that it
shall be the duty of the Trust or the Trustee to prepare, file or deliver
pursuant to the Related Agreements. In addition, at the Trustee's request, the
Administrator shall take any other action that it is the duty of the Trust or
the Trustee to take pursuant to the Related Agreements. In furtherance thereof,
upon request of the Administrator, the
-6-
<PAGE>
Trustee shall, on behalf of itself and of the Trust, execute and deliver to the
Administrator and to each successor Administrator appointed pursuant to the
terms hereof, one or more powers of attorney appointing the Administrator the
attorney-in-fact of the Trustee and the Trust for the purpose of executing on
behalf of the Trustee and the Trust all such documents, reports, filings,
instruments, certificates and opinions.
(ii) Notwithstanding anything in this Agreement or the Related Agree-
ments to the contrary, the Administrator shall be responsible for promptly
notifying the Trustee in the event that any withholding tax is imposed on the
Trust's payments (or allocations of income) to a Certificateholder. Any such
notice shall specify the amount of withholding tax that the Trustee may withhold
pursuant to Section 5.2(c) of the Trust Agreement.
(iii) Notwithstanding anything in this Agreement or the Related Agree-
ments to the contrary, the Administrator shall be responsible for performance of
the duties of the Administrator set forth in Sections 5.5(b) and 5.5(c) of the
Trust Agreement with respect to, among other things, accounting and reports to
Certificateholders;
(iv) The Administrator shall satisfy its obligations with respect to
clauses (ii) and (iii) above by retaining, at the expense of the Trust payable
by the Administrator, a firm of independent public accountants (the
"Accountants") acceptable to the Trustee which shall perform the obligations of
the Administrator thereunder. [In connection with paragraph (ii) above, the
Accountants will provide, prior to ________, 1994, a letter in form and
substance satisfactory to the Trustee as to whether any tax withholding is then
required and, if required, the procedures to be followed with respect thereto to
comply with the requirements of the Code. The Accountants shall be required to
update the letter in each instance that additional tax withholding is
subsequently required or any previously required tax withholding is no longer
required.]
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its affiliates; provided, however, that the
-------- -------
terms of any such transactions or dealings shall be in accordance with any
directions received from the Trust and shall be, in the Administrator's opinion,
no less favorable to the Trust than would be available from unaffiliated
parties.
(e) Non-Ministerial Matters.
-----------------------
(i) With respect to matters that in the reasonable judgment of the
Administrator are non-ministerial, the Administrator shall not take any action
unless within a reasonable time before the taking of such action, the
Administrator shall have notified the Trustee of the proposed action and the
Trustee shall not have withheld consent or provided an alternative direction.
-7-
<PAGE>
For the purpose of the preceding sentence, "non-ministerial matters" shall
include, without limitation:
(A) the amendment of or any supplement to the Trust Agreement;
(B) the declaration of an Event of Default under the Trust
Agreement;
(C) the declaration of an Event of Default under the Finance I
Note:
(D) the election of remedies following an Event of Default
under the Trust Agreement;
(E) the election of remedies following an Event of Default
under the Finance I Note;
(F) the initiation of any claim or lawsuit by the Trust and
the compromise of any action, claim or lawsuit brought by or against the
Trust;
(G) the amendment, change or modification of the Related Agree-
ments; and
(H) the appointment of successor Certificate Registrars,
successor Paying Agents pursuant to the Trust Agreement or the appointment
of successor Administrators or successor Servicers, or the consent to the
assignment by the Certificate Registrar, Paying Agent or Trustee of its
obligations under the Trust Agreement.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) liquidate any part
of the Trust Property pursuant to Section 9.2(b) of the Trust Agreement or (y)
take any other action that the Trust directs the Administrator not to take on
its behalf.
2. Records. The Administrator shall maintain appropriate books of
-------
account and records relating to services performed hereunder. These books of
account and records shall be accessible for inspection by the Trust at any time
during normal business hours.
3. Compensation. As compensation for the performance of the
------------
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to $________,
payable monthly, which shall be solely an obligation of Green Tree.
-8-
<PAGE>
4. Independence of the Administrator. For all purposes of this
---------------------------------
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Trust or the Trustee with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Trust, the Administrator shall have no
authority to act for or represent the Trust or the Trustee in any way and shall
not otherwise be deemed an agent of the Trust or the Trustee.
5. No Joint Venture. Nothing contained in this Agreement (i) shall
----------------
constitute the Administrator and either the Trust or the Trustee as members of
any partnership, joint venture, association, syndicate, unincorporated business
or other separate entity, (ii) shall be construed to impose any liability as
such on any of them or (iii) shall be deemed to confer on any of them any
express, implied or apparent authority to incur any obligation or liability on
behalf of the others.
6. Other Activities of Administrator. Nothing herein shall prevent
---------------------------------
the Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Trust or the Trustee.
7. Term of Agreement: Resignation and Removal of Administrator.
-----------------------------------------------------------
(a) This Agreement shall continue in force until the dissolution of the
Trust, upon which event this Agreement shall automatically terminate.
(b) Subject to Section 7(e) of this Agreement, the Administrator may
resign its duties hereunder by providing the Trust with at least 60 days' prior
written notice.
(c) Subject to Section 7(e) of this Agreement, the Trust may remove the
Administrator without cause by providing the Administrator with at least 60
days' prior written notice.
(d) Subject to Section 7(e) of this Agreement, the Trust may remove the
Administrator immediately by providing the Administrator with written notice of
termination if any of the following events should occur:
(i) the Administrator should default in the performance of any of its
duties under this Agreement and, after notice of such default, should not
cure such default within ten days (or, if such default cannot be cured in
such time, should not give within ten days such assurance of cure as shall
be reasonably satisfactory to the Trust);
-9-
<PAGE>
(ii) a court having jurisdiction should enter a decree or order for
relief in respect of the Administrator that is not vacated within 60 days
in any involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or should appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for the Administrator or any substantial part of its property, or should
order the winding-up or liquidation of its affairs; or
(iii) the Administrator should commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, should consent to the entry of an order for relief in an
involuntary case under any such law, or should consent to the appointment
of a receiver, liquidator, assignee, trustee, custodian, sequestrator or
similar official for the Administrator or any substantial part of its
property, should consent to any such official taking possession of any
substantial part of its property, should make any general assignment for
the benefit of creditors, or should fail generally to pay its debts as they
become due.
The Administrator agrees that if any of the events specified in clauses
(ii) or (iii) of this Section 7(d) should occur, it shall give written notice
thereof to the Trust and the Trustee within seven days.
(e) No resignation or removal of the Administrator pursuant to this
Section 7 shall be effective until (i) the Trust shall have appointed a
successor Administrator and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder.
(f) Subject to Section 7, the Administrator acknowledges that upon the
appointment of a successor Servicer pursuant to the Servicing Agreement, the
Administrator shall immediately resign and such successor Servicer shall
automatically without further action become the Administrator under this
Agreement; provided, however, that such successor Administrator shall be under
-------- -------
no obligation to make the reimbursements or provide the indemnifications set
forth in Section 1(a)(ii) of this Agreement.
8. Action upon Termination Resignation or Removal. Promptly upon the
-------------------------------------- -------
effective date of termination of this Agreement pursuant to Section 7(a) or the
resignation or removal of the Administrator pursuant to Section 7(b), (c) or
(d), the Administrator shall be entitled to be paid all fees and reimbursable
expenses accruing to it to the date of such termination, resignation or removal.
The Administrator shall forthwith upon such termination pursuant to Section 7(a)
deliver to the Trust all property and documents of or relating to the Trust
Property and the Fee Assets then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
7(b), (c) or (d), the
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<PAGE>
Administrator shall cooperate with the Trust and take all reasonable steps
requested to assist the Trust in making an orderly transfer of the
Administrator's duties.
9. Notices. Any notice, report or other communication given hereunder
-------
shall be in writing and addressed as follows:
(a) if to the Trust or the Trustee, to
Green Tree Securitized Net Interest Margin Trust 1994-A
In care of Wilmington Trust Company
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone Number: (302) 651-8653
Telecopier Number: (302) 651-8882
(b) if to the Administrator, to
First Trust National Association
180 East Fifth Street
Minneapolis, MN 55102
Attention: Corporate Trust Department
Telephone Number: (612)
Telecopier Number: (612)
(c) if to the Trustee, to
Wilmington Trust Company
Rodney Square North
1100 North Market Square
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telephone Number: (302) 651-8653
Telecopier Number: (302) 651-8882
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed
given if such notice is mailed by certified mail, postage prepaid, or sent by
telecopy or hand delivered to the address of such party as provided above.
10. Amendments. The Trust, the Administrator and the Trustee, with the
----------
written consent of the Trustee, but without the consent of the Certificate-
holders, may amend this Agreement in writing to add provisions to, to change in
any manner or eliminate provisions, or to modify in any manner the rights of the
Certificateholders; provided that such amendment will not, in the Opinion of
--------
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<PAGE>
Counsel satisfactory to the Trustee, materially and adversely affect the
interest of any Certificateholder. The Trust, the Administrator and the
Trustee, with the written consent of the Trustee and the holders of Senior
Certificates evidencing at least a majority in the outstanding amount of the
Senior Certificates and the holders of Subordinated Certificates evidencing at
least a majority of the Subordinated Certificates, may also amend this Agreement
to add provisions to, or to change in any manner or eliminate any of the
provisions, or to modify in any manner the rights of the Senior Certificate-
holders or the Subordinated Certificateholders; provided, however, that no such
-------- -------
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, distributions that are required to be made for the
benefit of the Senior Certificateholders or the Subordinated Certificateholders
or (ii) reduce the aforesaid percentage of the holders of Senior Certificates
and Subordinated Certificates that is required to consent to any such amendment,
without the consent of the holders of all the outstanding Senior Certificates
and Subordinated Certificates. The Administrator shall give the Rating Agencies
prior notice of any proposed amendment to this Agreement.
11. Successors and Assigns. The Administrator may not assign this
----------------------
Agreement unless the Trust and the Trustee give prior written consent to such
assignment. Acceptance of an assignment with such consent shall bind the
assignee hereunder in the same manner as the Administrator is bound hereunder.
Notwithstanding the foregoing, the Administrator may assign this Agreement
without the consent of the Trust or the Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator, provided that such successor organization executes
and delivers to the Trust and the Trustee an agreement in which such corporation
or other organization agrees to be bound hereunder in the same manner as the
Administrator is bound hereunder. Subject to the foregoing, this Agreement
shall bind any successors or assigns of the parties hereto.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
-------------
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
13. Headings. The section headings hereof have been inserted for
--------
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
14. Counterparts. This Agreement may be executed in counterparts, each of
------------
which when so executed shall together constitute but one and the same agreement.
15. Severability. Any provision of this Agreement that is prohibited or
------------
unenforceable in any jurisdiction shall be ineffective to the extent of such
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<PAGE>
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
16. Limitation of Trustee's Liability. Notwithstanding anything contained
---------------------------------
herein to the contrary, this instrument has been countersigned by Wilmington
Trust Company not in its individual capacity but solely in its capacity as
Trustee of the Trust and in no event shall Wilmington Trust Company in its
individual capacity, or any beneficial owner of the Trust, have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Trust hereunder, as to all of which recourse shall be had solely to the
assets of the Trust. For all purposes of this Agreement, in the performance of
any duties or obligations of the Trust hereunder, the Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Articles VI,
VII and VIII of the Trust Agreement.
17. Third-Party Beneficiary. The Trustee is a third-party beneficiary to
-----------------------
this Agreement and is entitled to the rights and benefits hereunder and may
enforce the provisions hereof as if it were a party hereto.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
GREEN TREE SECURITIZED NET
INTEREST MARGIN TRUST 1994-A
By Wilmington Trust Company, not in its
individual capacity but solely as Trustee
By:
-------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Trustee
By:
-------------------------------------
Name:
Title:
FIRST TRUST NATIONAL ASSOCIATION,
as Administrator
By:
-------------------------------------
Name:
Title:
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<PAGE>
EXHIBIT 5.1
-----------
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Registration Statement on Form S-3
File No. 33-51935
Gentlemen:
We have acted as counsel to Green Tree Financial Corporation, a
Minnesota corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3, File No. 33-51935, filed with the
Securities and Exchange Commission on January 18, 1994, as amended by
Amendment No. 1 thereto filed on February __, 1994 (the "Registration
Statement"), relating to the registration of $539,000,000 of __% Securitized
Net Interest Margin Certificates (the "Certificates"). The Certificates are
to be issued under a Trust Agreement (the "Trust Agreement") substantially in
the form filed as Exhibit __ to the Registration Statement, among Green Tree
Manufactured Housing Net Interest Margin Finance Corp. I, a Delaware
corporation ("Finance I"), Green Tree Manufactured Housing Net Interest Margin
Finance Corp. II, a Delaware corporation ("Finance II") and Wilmington Trust
Company, as trustee (the "Trustee").
We have examined the Registration Statement, the Trust Agreement and
such other documents, and have reviewed such questions of law, as we have
considered necessary and appropriate for the purposes of this opinion. Based
on the foregoing, we are of the opinion that the Certificates, when duly
executed, authenticated and delivered in accordance with the terms of the
Trust Agreement, will be legally and validly issued, and the holders of such
Certificates will be entitled to the benefits of that Trust Agreement.
The opinion set forth above is subject to the following
qualifications and exceptions:
(a) Our opinion is subject to the effect of any applicable
bankruptcy insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' rights.
<PAGE>
Green Tree Financial Corporation
February __, 1993
Page 2
(b) Our opinion is subject to the effect of general principles of
equity, including (without limitation) concepts of materiality,
reasonableness, good faith and fair dealing, and other similar doctrines
affecting the enforceability of agreements generally (regardless of
whether considered in a proceeding in equity or at law).
(c) Minnesota Statutes (S) 290.371, Subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does
not have a cause of action upon which it may bring suit under Minnesota
law unless the corporation has filed a Notice of Business Activities
Report and provides that the use of the courts of the State of Minnesota
for all contracts executed and all causes of action that arose before
the end of any period for which a corporation failed to file a required
report is precluded. Insofar as our opinion may relate to the valid,
binding and enforceable character of any agreement under Minnesota law
or in a Minnesota court, we have assumed that any party seeking to
enforce such agreement has at all times been, and will continue at all
times to be, exempt from the requirement of filing a Notice of Business
Activities Report or, if not exempt, has duly filed, and will continue
to duly file, all Notice of Business Activities Reports.
Our opinion expressed above is limited to the laws of the State of
Minnesota.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising part of the Registration
Statement.
Dated: February __, 1994
Very truly yours,
CFS
