<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 1994
REGISTRATION NO. 33-51935
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 3
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)
----------------
GREEN TREE SECURITIZED NET INTEREST MARGIN FINANCE CORP. I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THE CORPORATE TRUST COMPANY
CORPORATION TRUST CENTER
1209 ORANGE STREET
WILMINGTON, DELAWARE 19801
(302) 655-5049
(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
----------------
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>
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. [_]
---------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE FEE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Securities Net Interest
Margin Certificates... $539,000,000 100% $539,000,000 $185,862.06(2)(3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1993-4, Class C....... (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1993-3, Class C....... (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1993-2, Class C....... (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1993-1, Class C....... (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1992-2, Class C....... (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1992-1, Class C....... (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1992D, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1992B, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1991I, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1991G, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1991D, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1991B, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1990I, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1990G, Class C........ (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1990D, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1990B, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1989H, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1989F, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1989D, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1989B, Class D........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1988X, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1988Q, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract
Senior/Subordinate
Pass-Through
Certificates, Series
1988H, Class C........ (3) (3) (3) (3)
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Manufactured Housing
Contract Pass-Through
Certificates, Series
1988E, residual
interest.............. (3) (3) (3) (3)
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Manufactured Housing
Contract Pass-Through
Certificates, Series
1987C, residual
interest.............. (3) (3) (3) (3)
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Manufactured Housing
Contract Pass-Through
Certificates, Series
1987B, residual
interest.............. (3) (3) (3) (3)
- -------------------------------------------------------------------------------------
Limited Recourse Note
Issued by Finance I... (3) (3) (3) (3)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the proposed maximum aggregate offering price, pursuant to Rule
457(c).
(2) Previously paid.
(3) The Residual Assets have no stated principal amount. No additional
consideration will be paid for the Residual Assets or the Finance I Note;
accordingly, no separate filing fee is being paid herewith pursuant to Rule
457(n).
<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 MARCH 8, 1994
PROSPECTUS
$508,000,000 (APPROXIMATE)
LOGO
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. Investors may be unable to invest
payments of principal received on the Certificates at a rate equal to the
interest rate on the Certificates.
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)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Certificate........................... % % %
- --------------------------------------------------------------------------------
Total..................................... $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</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
solely from, the Trust Property. The Trust Property
will consist of (i) a limited recourse note in the
initial amount of $321,000,000 (the "Finance I Note")
issued by Finance I, which in turn will be secured
by, and payable solely from, the Fee Assets (as
described below), (ii) the "residual interests" in
certain trusts (the "Residual Assets"), (iii) a
reserve fund for the benefit of Certificateholders
(the "Reserve Fund"), and (iv) the related property
described below. The Trust Property represents the
net interest margin payable from certain pools of
manufactured housing contracts (the "Contracts") sold
by Green Tree between 1978 and 1993. The initial
principal amount of the Certificates is equal to
approximately 78% of the sum of (i) the estimated
present value of the Fee Assets securing the Finance
I Note ($411,007,189) and (ii) the estimated present
value of the Residual Assets ($239,946,319), all as
further described in the diagram on page 10, but such
estimates are based on a number of assumptions about
the future performance of the Fee Assets and the
Residual Assets. See "Special Considerations" and
"Yield, Average Life and Prepayment Considerations."
In particular, the prepayment assumptions used in
calculating the estimated present value of the Trust
Property are disclosed graphically on page 27 on the
curve entitled "Base Case," and in the table on page
28 under the heading "Projected Prepayment
Experience."
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
3
<PAGE>
levels of recourse to Green Tree against delinquen-
cies, defaults and net liquidation losses on certain
pools of Contracts ("Guarantee Fees"), (ii) excess
spread on certain pools of Contracts evidenced by
GNMA Certificates ("GNMA excess spread"), and (iii)
the excess portion of fees for servicing certain
pools of Contracts ("excess servicing"). The Guaran-
tee 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 be-
fore servicing fees, expenses and losses. Green
Tree's stated servicing fee with respect to the pools
giving rise to the excess servicing is generally 100
basis points, of which the excess servicing included
in the Fee Assets is generally 50 basis points, sub-
ject to the availability of funds remaining 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 ini-
tial 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 dia-
gram on page 10), but such estimate is based on a
number of assumptions about the future performance of
the Fee Assets. See "The Trust Property--The Fee As-
sets" and "Yield, Average Life and Prepayment Consid-
erations."
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
4
<PAGE>
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 Trust will retain
$20,320,000 of the proceeds from the sale of the Cer-
tificates and deposit such amount into the Reserve
Fund. On any Distribution Date, if the Amount Avail-
able 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 out-
standing principal amount of the Certificates on the
Distribution Date occurring in February 2004, or upon
the maturity of the Certificates following accelera-
tion upon an Event of Default (as described under
"Description of the Certificates--Events of De-
fault"), 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.
Contract Originator and Green Tree originated substantially all of the Con-
Servicer............... 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
Dates................ Principal and interest on the Certificates will be
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. In the event that the Amount
Available is not sufficient to make a full distribu-
tion of amounts due on any Distribution Date, 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 (as defined
below).
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).
5
<PAGE>
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.
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 The holders of the Subordinated Certificates may, on
Prepayment........... 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,
6
<PAGE>
the Certificates will be classified as debt for fed-
eral income tax purposes. Alternative characteriza-
tions of the Certificates are possible, but would not
result in materially 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 herein). By acceptance
of a Certificate, each purchaser will be deemed to
represent that it is not a disqualified organization.
See "Restrictions on Transfer."
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 that the Amount Available each
month plus the funds in the Reserve Fund will be suf-
ficient to make the timely payment of interest and
ultimate payment of principal on the Certificates.
The rating of the Certificates by Moody's addresses
the likelihood that the Amount Available each month
plus the funds in the Reserve Fund will be sufficient
to make the ultimate payment of principal and inter-
est on the Certificates. A security 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. The order of priority for monthly distribution of all
collected funds in a Securitized Pool or GNMA Pool is (i) Class A principal
and interest, (ii) Class B principal and interest, and (iii) the Trust
Property. 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
8
<PAGE>
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.
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. Green Tree management is not aware of
any trends or anomalies which have adversely affected the delinquency, loan
loss or repossession experience of the Contracts.
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 estimated present value of each component of the Trust Property
described on pages 15-20 was calculated based on a number of assumptions about
the future performance of the Contracts. Those assumptions were in turn based
upon an extensive loan-by-loan statistical analysis of the historical
performance of Green Tree's servicing portfolio of manufactured housing
contracts since 1976. This
14
<PAGE>
Prospectus first describes the characteristics of each component of the Fee
Assets and the Residual Assets; it then describes the historical and base-case
projected prepayment, default and recovery experience of Green Tree's servicing
portfolio; finally, pages 32-34 disclose the projected performance of the
Certificates under Green Tree management's base-case projections of Contract
prepayment, default and recovery, and the performance of the Certificates under
a variety of alternative default and interest rate scenarios.
The following description of generic types of transaction structures is
qualified in its entirety by the information included in Appendix I.
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
15
<PAGE>
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 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 and each of the cashflow graphs presented
in Appendix I 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
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<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
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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
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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
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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 Trust will retain $20,320,000 (the "Initial Deposit
Amount") of the proceeds from the sale of the Certificates and deposit such
amount 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.
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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.
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[TOTAL GNMA AND SECURITIZED CONVENTIONAL CASHFLOWS GRAPH]
22
<PAGE>
[TOTAL SECURITIZED CONVENTIONAL CASHFLOWS GRAPH]
23
<PAGE>
[TOTAL GNMA CASHFLOWS GRAPH]
24
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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)
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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.
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<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... 13.8 12.1 11.6 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>
BOND VALUE SEGMENTATION(1)
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
POOL AVERAGE AVERAGE
PRINCIPAL WAM INVESTOR INTEREST
TRANSACTION BALANCE (MONTHS) WAC RATE(%) MARGIN(%)(2)
- ----------- --------------- -------- ----- -------- ------------
<S> <C> <C> <C> <C> <C>
GTFC 1993-4..... $ 720,973,959 202 9.73% 6.07% 3.66%
GTFC 1993-3..... 648,127,948 199 10.23 5.61 4.62
GTFC 1993-2..... 432,952,311 197 10.65 5.86 4.79
GTFC 1993-1..... 233,917,273 196 11.35 6.33 5.02
GTFC 1992-2..... 263,253,660 188 11.26 7.36 3.90
GTFC 1992-1..... 223,816,577 183 11.88 6.58 5.29
MLMI 1992-D..... 187,236,472 172 12.20 7.51 4.70
MLMI 1992-B..... 473,510,261 107 13.44 7.68 5.76
MLMI 1991-I..... 121,412,618 155 13.05 7.80 5.26
MLMI 1991-G..... 119,140,631 155 13.50 8.36 5.14
MLMI 1991-D..... 92,060,968 136 14.20 9.22 4.98
MLMI 1991-B..... 64,866,724 139 14.12 9.45 4.67
MLMI 1990-I..... 72,288,791 148 14.05 9.37 4.68
MLMI 1990-G..... 81,658,055 147 14.19 10.08 4.11
MLMI 1990-D..... 68,465,325 139 14.22 10.01 4.21
MLMI 1990-B..... 47,297,224 142 13.96 10.15 3.82
MLMI 1989-H..... 69,486,801 140 13.71 9.49 4.22
MLMI 1989-F..... 79,969,150 131 13.91 9.75 4.16
MLMI 1989-D..... 58,415,195 131 14.37 10.47 3.90
MLMI 1989-B..... 28,408,287 124 14.12 10.80 3.32
MLMI 1988-X..... 48,976,620 122 13.72 10.25 3.47
MLMI 1988-Q..... 61,978,163 122 13.61 9.80 3.81
MLMI 1988-H..... 39,615,510 117 12.97 9.70 3.27
MLMI 1988-E..... 43,398,005 103 13.51 9.55 3.96
MLMI 1987-C..... 41,750,161 111 13.67 10.10 3.57
MLMI 1987-B..... 25,742,132 95 14.52 10.20 4.32
MaHCs 1987-B.... 51,692,915 90 13.92 9.55 4.37
MaHCs 1987-A.... 18,233,098 99 12.65 8.55 4.10
GNMA 1993....... 220,011,048 201 9.76 6.81 2.95
GNMA 1992....... 235,990,153 187 10.86 7.91 2.95
GNMA 1991....... 380,291,336 174 12.28 9.33 2.95
GNMA 1990....... 274,014,369 166 12.87 9.93 2.95
GNMA 1989....... 185,431,694 147 12.76 9.82 2.94
GNMA 1988....... 107,223,465 119 12.49 9.57 2.92
GNMA 1987....... 119,020,205 101 11.42 8.52 2.91
GNMA 1986....... 104,091,589 88 12.11 9.22 2.89
GNMA 1985....... 122,809,613 61 14.71 11.87 2.83
---------------
Total........... $ 6,167,528,305
===============
Weighted Average. 164 11.88% 7.79% 4.09%
=== ===== ===== ====
<CAPTION>
BOND VALUE SEGMENTATION(3)
-----------------------------------------------------------------------
FEE ASSETS(4)
--------------------------------------
EXCESS GUARANTEE GNMA
TRANSACTION SERVICING FEE EXCESS SPREAD RESIDUAL ASSETS TOTAL BOND VALUE
- ----------- ----------- ------------ ------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
GTFC 1993-4..... $17,903,425 $0 $0 $ 60,199,204 $ 78,102,629
GTFC 1993-3..... 15,827,014 87,447,413 0 1,801,769 105,076,197
GTFC 1993-2..... 10,395,269 51,681,414 0 1,313,556 63,390,239
GTFC 1993-1..... 5,482,171 30,553,817 0 1,311,939 37,347,927
GTFC 1992-2..... 6,013,617 20,795,735 0 0 26,809,352
GTFC 1992-1..... 3,398,823 22,141,420 0 8,393,367 33,933,610
MLMI 1992-D..... 3,267,491 0 0 26,681,971 29,949,462
MLMI 1992-B..... 6,876,299 0 0 67,430,465 74,306,764
MLMI 1991-I..... 2,082,728 0 0 18,067,088 20,149,816
MLMI 1991-G..... 2,004,427 0 0 17,431,994 19,436,420
MLMI 1991-D..... 1,428,942 0 0 6,104,744 7,533,687
MLMI 1991-B..... 869,708 0 0 10,978,890 11,848,598
MLMI 1990-I..... 1,051,159 0 0 14,130,422 15,181,581
MLMI 1990-G..... 1,073,517 2,388,158 0 0 3,461,675
MLMI 1990-D..... 1,029,716 2,586,042 0 0 3,615,758
MLMI 1990-B..... 720,688 1,257,516 0 0 1,978,204
MLMI 1989-H..... 1,073,598 2,578,884 0 0 3,652,482
MLMI 1989-F..... 1,195,357 3,842,042 0 0 5,037,400
MLMI 1989-D..... 866,481 0 0 1,025,220 1,891,701
MLMI 1989-B..... 408,252 0 0 590,567 998,818
MLMI 1988-X..... 736,767 0 0 1,315,513 2,052,280
MLMI 1988-Q..... 944,610 0 0 2,221,915 3,166,525
MLMI 1988-H..... 606,407 0 0 947,696 1,554,103
MLMI 1988-E..... 620,624 3,589,133 0 0 4,209,757
MLMI 1987-C..... 605,642 2,654,055 0 0 3,259,697
MLMI 1987-B..... 355,694 2,009,336 0 0 2,365,030
MaHCs 1987-B.... 1,356,742 3,381,308 0 0 4,738,050
MaHCs 1987-A.... 512,947 1,000,315 0 0 1,513,262
GNMA 1993....... 0 0 15,415,334 0 15,415,334
GNMA 1992....... 0 0 15,149,244 0 15,149,244
GNMA 1991....... 0 0 19,860,065 0 19,860,065
GNMA 1990....... 0 0 12,758,458 0 12,758,458
GNMA 1989....... 0 0 8,831,463 0 8,831,463
GNMA 1988....... 0 0 4,026,262 0 4,026,262
GNMA 1987....... 0 0 3,855,507 0 3,855,507
GNMA 1986....... 0 0 2,869,661 0 2,869,661
GNMA 1985....... 0 0 1,626,493 0 1,626,493
----------- ------------ ------------- --------------- ----------------
Total........... $88,708,114 $237,906,588 $84,392,487 $239,946,319 $650,953,511
=========== ============ ============= =============== ================
Weighted Average.
</TABLE>
- ----
(1) As of the Cut-off Date.
(2) Before servicing fees, losses and expenses.
(3) Represents the present value of the Fee Assets, Residual Asset and net
interest margin cash flow for each transaction, after servicing fees,
projected losses and expenses.
(4) The Excess Servicing, Guarantee Fee and GNMA Excess Spread listed below
represent the assets that secure the Finance I Note.
29
<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
30
<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
31
<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).
32
<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.
33
<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
<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............ 0 0 0 0 0 0 0
2006............ 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
Projected
CPR (3)......... 12.4% 10.5% 8.2% 6.9% 6.3% 6.0% 5.9%
Weighted Average
Life (in
years) (4)...... 5.39 4.64 3.92 3.59 3.46 3.41 3.39
Expected Matu-
rity Date: 11/04 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.
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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
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<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
36
<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 if the Internal Revenue Service were successfully to
assert that the Certificates did not represent debt for federal income tax
purposes, 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
37
<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.
38
<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
39
<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.
40
<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 $321,000,000 of the net proceeds of the sale of the
Certificates will be loaned to Finance I in return for the Finance I Note, and
an additional $20,320,000 of the net proceeds will be deposited in the Reserve
Fund. 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.
41
<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
42
<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
43
<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
44
<PAGE>
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
45
<PAGE>
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.
46
<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.
47
<PAGE>
APPENDIX I
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% $2,173,774,909.82 197 151 12.01%
Conventional............ 4,343,497,466.96 70.43 4,835,507,184.28 198 168 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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$17,903,425 $0 $60,199,204 $78,102,629
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- ------------
<S> <C> <C> <C>
$15,827,014 $87,447,413 $1,801,769 $105,076,197
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- -----------
<S> <C> <C> <C>
$10,395,269 $51,681,414 $1,313,556 $63,390,239
</TABLE>
<TABLE>
<CAPTION>
Pass-
Description of Current Through
Securities Balance Rate
- -------------- ------------ --------
<S> <C> <C>
Class A-1; Senior $128,489,772 3.65625%
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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- -----------
<S> <C> <C> <C>
$5,482,171 $30,553,817 $1,311,939 $37,347,927
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- -----------
<S> <C> <C> <C>
$6,013,617 $20,795,735 $0 $26,809,352
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- -----------
<S> <C> <C> <C>
$3,398,823 $22,141,420 $8,393,367 $33,933,610
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$3,267,491 $0 $26,681,971 $29,949,462
</TABLE>
<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>
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
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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$6,876,299 $0 $67,430,465 $74,306,764
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$2,082,728 $0 $18,067,088 $20,149,816
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$2,004,427 $0 $17,431,994 $19,436,420
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- ----------
<S> <C> <C> <C>
$1,428,942 $0 $6,104,744 $7,533,687
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$869,708 $0 $10,978,890 $11,848,598
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- -------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ----------- -----------
<S> <C> <C> <C>
$1,051,159 $0 $14,130,422 $15,181,581
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$1,073,517 $2,388,158 $0 $3,461,675
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$1,029,716 $2,586,042 $0 $3,615,758
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$720,688 $1,257,516 $0 $1,978,204
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$1,073,598 $2,578,884 $0 $3,652,482
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$1,195,357 $3,842,042 $0 $5,037,400
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- ----------
<S> <C> <C> <C>
$866,481 $0 $1,025,220 $1,891,701
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$408,252 $0 $590,567 $998,818
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- ----------
<S> <C> <C> <C>
$736,767 $0 $1,315,513 $2,052,280
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- ---------- ----------
<S> <C> <C> <C>
$944,610 $0 $2,221,915 $3,166,525
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$606,407 $0 $947,696 $1,554,103
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$620,624 $3,589,133 $0 $4,209,757
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$605,642 $2,654,055 $0 $3,259,697
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$355,694 $2,009,336 $0 $2,365,030
</TABLE>
<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.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$1,356,742 $3,381,308 $0 $4,738,050
</TABLE>
<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 $33,462,440 minus losses on
Defaulted Contracts repurchased since January 15, 1994.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers:None.
110
<PAGE>
GRAPH--$
111
<PAGE>
MAHCS 1987-A
Issue Date: March 1987.
Bond Value Segmentation
<TABLE>
<CAPTION>
Fee Assets
- --------------------------------------- Residual Total Bond
Excess Servicing Guarantee Fee Asset Value
- ---------------- ------------- -------- ----------
<S> <C> <C> <C>
$512,947 $1,000,315 $0 $1,513,262
</TABLE>
<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 $8,328,454 minus losses on
Defaulted Contracts repurchased since January 15, 1994.
Nature of Net Excess Cashflow:
1. Limited Guarantee Fee.
Triggers:None.
112
<PAGE>
113
GRAPH--$
<PAGE>
III. THE GNMA POOLS
* Bond Value Segmentation: GNMA Excess Spread $15,415,334
114
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $15,149,244
115
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $19,860,065
116
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $12,758,458
117
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $8,831,463
118
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $4,026,262
119
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $3,855,507
120
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $2,869,661
121
<PAGE>
* Bond Value Segmentation: GNMA Excess Spread $1,626,493
122
<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>
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>
Green Tree Manufactured Housing Net Interest Margin Finance Corp. I ("Finance
I") is incorporated under the laws of Delaware. Section 145 of the Delaware
General Corporation Law provides that a Delaware corporation may indemnify any
persons, including officers and directors, who are, or are threatened to be
made, parties to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation, by reason of the fact
that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise). The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the corporation's best interests and, for criminal proceedings, had no
reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director actually and reasonably incurred.
The Certificate of Incorporation and Bylaws of Finance I provide, in effect,
that, subject to certain limited exceptions, such corporation will indemnify
its officers and directors to the extent permitted by the Delaware General
Corporation Law.
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 Green Tree and Finance I, each of their directors,
certain of their officers and any persons who control Green Tree or Finance I
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
3.3 Certificate of Incorporation of Green Tree Manufactured Housing Net
Interest Margin Finance Corp. I
3.4 Bylaws of Green Tree Manufactured Housing Net Interest Margin Finance
Corp. I
*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
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
***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 Green Tree signed
by an attorney-in-fact (included on page II-4)
</TABLE>
--------
* Previously filed.
** Incorporated by reference to the similarly numbered exhibit to Green
Tree'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 Green Tree'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 registrants
have 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 registrants
of expenses incurred or paid by a director, officer or controlling person of
the registrants 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 registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
them is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The undersigned registrants hereby undertake 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 430A and contained in
a form of prospectus filed by the registrants 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 registrants hereby undertake 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. 3 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
MARCH 8, 1994.
Green Tree Financial Corporation
/s/ John W. Brink
By: _________________________________
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. 3 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
- ------------------------------------- Board and Chief March 8, 1994
LAWRENCE M. COSS Executive Officer
(Principal
Executive Officer)
and Director
/s/ John W. Brink Executive Vice
- ------------------------------------- President, March 8, 1994
JOHN W. BRINK Treasurer and Chief
Financial Officer
(Principal
Financial Officer)
* Vice President and
- ------------------------------------- Controller March 8, 1994
ROBLEY D. EVANS (Principal
Accounting Officer)
* Director
- ------------------------------------- March 8, 1994
RICHARD G. EVANS
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director
- ------------------------------------- March 8, 1994
C. THOMAS MAY, JR.
* Director
- ------------------------------------- March 8, 1994
W. MAX MCGEE
* Director
- ------------------------------------- March 8, 1994
ROBERT S. NICKOLOFF
* Director
- ------------------------------------- March 8, 1994
KENNETH S. ROBERTS
</TABLE>
/s/ John W. Brink
* By ________________________________
JOHN W. BRINK
AS ATTORNEY-IN-FACT
II-5
<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. 3 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
MARCH 8, 1994.
Green Tree Manufactured Housing Net
Interest Margin Finance Corp. I
/s/ Lawrence M. Coss
By: __________________________________
LAWRENCE M. COSS
CHAIRMAN AND PRESIDENT
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 3 TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED. EACH PERSON WHOSE SIGNATURE TO THIS
AMENDMENT NO. 3 TO THE REGISTRATION STATEMENT APPEARS BELOW HEREBY CONSTITUTES
AND APPOINTS JOHN W. BRINK AND RICHARD G. EVANS, AND EACH OF THEM, AS HIS TRUE
AND LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL POWER OF SUBSTITUTION, TO SIGN
ON HIS BEHALF INDIVIDUALLY AND IN THE CAPACITY STATED BELOW AND TO PERFORM ANY
ACTS NECESSARY TO BE DONE IN ORDER TO FILE ALL AMENDMENTS AND POST-EFFECTIVE
AMENDMENTS TO THIS REGISTRATION STATEMENT, AND ANY AND ALL INSTRUMENTS OR
DOCUMENTS FILED AS PART OF OR IN CONNECTION WITH THIS REGISTRATION STATEMENT OR
THE AMENDMENTS THERETO AND EACH OF THE UNDERSIGNED DOES HEREBY RATIFY AND
CONFIRM ALL THAT SAID ATTORNEY-IN-FACT AND AGENT, OR HIS SUBSTITUTES, SHALL DO
OR CAUSE TO BE DONE BY VIRTUE HEREOF.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Lawrence M. Coss Chairman of the March 8, 1994
- ------------------------------------ Board and
LAWRENCE M. COSS President
(Principal
Executive Officer)
and Director
/s/ John W. Brink
- ------------------------------------ Vice President and March 8, 1994
JOHN W. BRINK Treasurer
(Principal
Financial Officer)
/s/ Richard G. Evans Director March 8, 1994
- ------------------------------------
RICHARD G. EVANS
Director March , 1994
- ------------------------------------
WILLIAM B. DOEPKE
Director March , 1994
- ------------------------------------
THEODORE P. JANULIS
</TABLE>
II-6
<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
3.3 Certificate of Incorporation of Green Tree Manufactured Housing
Net Interest Margin Finance Corp. I
3.4 Bylaws of Green Tree Manufactured Housing Net Interest Margin
Finance Corp. I
*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>
- --------
* Previously filed.
** Incorporated by reference to the similarly numbered exhibit to Green Tree'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 Green Tree's Annual Report on
Form 10-K for the year ended December 31, 1992.
<PAGE>
Exhibit 3.3
CERTIFICATE OF INCORPORATION
OF
GREEN TREE MANUFACTURED HOUSING NET
INTEREST MARGIN FINANCE CORP. I
Article I. Name. The name of the Corporation is Green Tree Manufactured
Housing Net Interest Margin Finance Corp. I (the "Corporation").
Article II. Registered Office. The address of the Corporation's registered
office in the State of Delaware is Corporation Trust Center, 1209 Orange Street
in the City of Wilmington, County of New Castle. The name of its registered
agent at such address is The Corporation Trust Company.
Article III. Purpose. The nature of the business or purpose to be conducted
or promoted by the Corporation is to engage exclusively in the following
business and financial activities:
(a) to receive from Green Tree Financial Corporation ("Green Tree") and
to hold, sell, transfer or pledge the right to receive guarantee fees and
excess servicing fees related to certain pools of manufactured housing
contracts originated and sold by Green Tree;
(b) to receive from Green Tree and to hold, sell, transfer or pledge
excess servicing fees for servicing certain pools of manufactured housing
contracts servicing GNMA Certificates issued and sold by Green Tree (such
guarantee fees and excess servicing fees described in paragraphs (a) and (b)
being hereinafter collectively referred to as the "Fee Assets");
(c) to receive from Green Tree and to hold, sell, transfer or pledge
certain residual assets (the "Residual Assets") evidencing interests in
certain pools of manufactured housing contracts originated and sold by Green
Tree;
(d) to enter into agreements providing for the pledge of the Fee Assets
to a trust (the "Trust") and to transfer the Residual Assets to such Trust;
(e) to issue a limited recourse note to the Trust, and to secure it
with a pledge of the Fee Assets;
(f) to acquire and hold certificates issued by the Trust representing
subordinated interests in the Trust;
<PAGE>
(g) to sell securities issued by the Trust; and
(h) to engage in any lawful act or activity and to exercise any powers
permitted to corporations organized under the General Corporation Law of the
State of Delaware that are incidental to and necessary, suitable or
convenient for the accomplishment of the purposes specified in clauses (a)
through (g) above.
Article IV. Duration. The Corporation is to have perpetual existence.
Article V. Number of Shares. The aggregate number of shares of all classes
of capital stock that the Corporation shall have authority to issue is one
hundred (100) shares of Common Stock, par value of $0.01 per share.
Article VI. Repurchase of Shares. The Corporation, through its Board of
Directors, shall have the right and power to repurchase any of its outstanding
stock at such price and upon such terms as may be agreed upon between the
Corporation and the selling stockholder or stockholders.
Article VII. Incorporator. The name and mailing address of the
incorporator is as follows:
Name Mailing Address
---- ---------------
Drew S. Backstrand, Esq. 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
Article VIII. Number of Directors; Initial Directors. The number of
directors of the Corporation will not be less than three nor more than seven.
The exact number of directors is to be fixed in the Bylaws. The number of
directors constituting the initial Board of Directors is five, and the names and
addresses of the persons who are to serve as directors until the first annual
meeting of shareholders or until their respective successors are elected and
qualified are:
Name Address
---- -------
Lawrence M. Coss 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
John W. Brink 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
Richard G. Evans 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
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<PAGE>
William B. Doepke 190 South LaSalle Street, 25th Floor
Chicago, Illinois 80803
Theodore P. Janulis World Financial Center, 10th Floor
New York, New York 10285-1000
The list above setting forth the names and addresses of the initial directors of
the Corporation does not include additional persons who may otherwise be elected
and qualified to serve as directors in accordance with the Bylaws.
Article IX. Independent Directors. At all times, at least two
directors of the Corporation shall be an Independent Director. "Independent
Director" shall mean a director of the Corporation who shall at no time be, or
have been, a director or officer of, be employed by, or hold any beneficial
economic interest in any Affiliate, and who shall at no time hold any beneficial
or economic interest in the Corporation. "Affiliate" shall mean any entity other
than the Corporation or Green Tree Manufactured Housing Net Interest Margin
Finance Corp. II, (i) which owns beneficially, directly or indirectly, 10% or
more of the outstanding shares of Common Stock of the Corporation, or (ii) of
which 10% or more of the outstanding shares of its Common Stock is owned
beneficially, directly or indirectly, by any entity described in clause (i)
above, or (iii) which is controlled by an entity described in clause (i) above,
as the term "control" is defined under Section 230.405 of the Rules and
Regulations of the Securities and Exchange Commission, 17 C.F.R. Section
230.405.
Article X. Directors' Powers. With the consent in writing of the
Independent Directors, as the case may be (as that term is defined in Article
IX), the directors shall have power to make and to alter or amend the Bylaws, to
fix the amount to be reserved as working capital, and to authorize and cause to
be executed, mortgages and liens without limit as to the amount, upon the
property and franchise of this Corporation or to issue guarantees on behalf of
the Corporation.
With the consent in writing, and pursuant to a vote of the holders of
all of the capital stock issued and outstanding, the directors shall have
authority to dispose, in any manner, of the whole property of this Corporation.
The Bylaws shall determine whether and to what extent the accounts and
books of this Corporation, or any of them, shall be open to the inspection of
the stockholders; and no stockholder shall have any right of inspecting any
account, or book, or document of this Corporation, except as conferred by law or
the Bylaws or by resolution of the stockholder.
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<PAGE>
The stockholders and directors shall have power to hold their meetings
and keep the books, documents and papers of the Corporation outside the State of
Delaware, at such places as may be from time to time designated by the Bylaws or
by resolution of the stockholders or directors, except as otherwise required by
the laws of Delaware.
Article XI. Written Action by Directors. An action required or
permitted to be taken at a meeting of the Board of Directors of the Corporation
may be taken by written action signed, or counterparts of a written action
signed, in the aggregate by all of the directors.
Article XII. Reliance on Books and Records, Etc. A director shall,
in the performance of his duties, be fully protected in relying in good faith
upon the records of the Corporation and upon such information, opinions, reports
or statements presented to the Corporation by any of the Corporation's officers
or employees, or committees of the Board of Directors, or by any other person as
to matters the director reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Corporation.
Article XIII. Liability of Directors. To the fullest extent
permitted by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended, a director of the Corporation shall not be
liable to the Corporation or its stockholders for monetary damages for a breach
of fiduciary duty as a director, except (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit. Any repeal or modification of this Article XIII shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Article XIV. Internal Affairs. The Corporation will conduct its
affairs in accordance with the following provisions:
(a) the Corporation will establish an office through which its business
will be conducted, which office will be separate and apart from that of any
person or entity owning beneficially more than 50% of the outstanding shares
of Common Stock of the Corporation and will be separate and apart from that
of any of such owner's subsidiaries or affiliates other than the Corporation
or Green Tree Manufactured Housing
Net Interest Margin Finance Corp. II;
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<PAGE>
(b) the Corporation will maintain separate corporate records and books
of account from those of such owner, subsidiaries and affiliates as are
referred to in (a);
(c) the Corporation's assets will not be commingled with those of any
other corporation; and
(d) The Corporation's Board of Directors will hold regular meetings,
not less frequently than once every calendar quarter, to review the actions
of the officers of the Corporation and to authorize and approve (i) all
transactions outside the ordinary course of the Corporation's business that
are incidental, necessary, suitable or convenient for the accomplishment of
the purposes set forth in Article III, and (ii) such other transactions,
agreements and actions of the Corporation as the Board of Directors deems
appropriate in connection with its review and supervision of the
Corporation's actions.
Article XV. Meetings of Stockholders. Meetings of stockholders shall
be held at such place, within or without the State of Delaware, as may be
designated by or in the manner provided in the Bylaws or, if not so designated
or provided, at the registered office of the Corporation in the State of
Delaware. Elections of directors need not be by ballot unless and except to the
extent that the Bylaws so provide. The books of the Corporation may be kept
(subject to any provision contained in any applicable statute) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the Bylaws of the Corporation.
Article XVI. Limitations on Actions. Notwithstanding any other
provision of the Certificate of Incorporation, Bylaws or any provision of law
that otherwise so empowers the Corporation, the Corporation shall not, without
(i) the affirmative vote of 100% of the members of the Board of Directors of the
Corporation, including the affirmative vote of the Independent Directors
required by Article IX on or after the date on which the Independent Directors
required by such Article IX have been appointed and qualified:
(a) make an assignment for the benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal for the appointment of a
custodian, receiver or any trustee for it or for a substantial part of its
property, commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute
of any jurisdiction, whether now or hereinafter in effect, consent or
acquiesce in the filing of any such petition, application, proceeding or
appointment of or taking possession by the custodian, receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Corporation or any substantial part of its property, or admit its inability
to pay its debts generally as they
-5-
<PAGE>
become due or authorize any of the foregoing to be done or taken on behalf
of the Corporation; provided, that if there shall not be a director required
by Article IX of this Certificate of Incorporation then in office and
acting, a vote upon any matter set forth in this paragraph (a) of this
Article XVI shall not be taken unless and until a director meeting the
requirements of Article IX of this Certificate of Incorporation shall have
been appointed and qualified;
(b) amend, alter, change or repeal any of the following articles of
this Certificate of Incorporation: Article III, Article IX, Article XIV or
this Article XVI; or
(c) (i) engage in any business or activity other than as authorized by
Article III hereof, (ii) dissolve or liquidate, in whole or in part or (iii)
consolidate with or merge into any other entity or convey, transfer or lease
its properties and assets substantially as an entirety to any entity, or
permit any entity to merge into it or convey, transfer or lease its
properties and assets substantially as an entirety to it.
Article XVII. Amendment, Alteration or Repeal. The Corporation
reserves the right to amend, alter, or repeal any other provision contained in
this Certificate of Incorporation in the manner now or hereafter prescribed by
statute, and all rights of stockholders herein are subject to this reservation;
provided, however, that Article III, Article IX, Article XIV and Article XVI may
be amended only in accordance with Article XVI of this Certificate of
Incorporation.
I, the undersigned, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, as amended, do make this certificate, hereby declaring and
certifying that this is my act and deed and that the facts herein stated are
true and that I have accordingly hereunto signed my signature this 8th day of
March, 1994.
/s/ Drew S. Backstrand
---------------------------------------
Incorporator
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<PAGE>
Exhibit 3.4
BYLAWS
OF
GREEN TREE MANUFACTURED HOUSING NET
INTEREST MARGIN FINANCE CORP. I
ARTICLE I.
----------
Meetings of Stockholders
------------------------
Section 1. Annual Meetings. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held each year at such time, on such
day and at such place, within or without the State of Delaware as shall be
designated by the Board of Directors.
Section 2. Special Meetings. A special meeting of the stockholders for
any purpose or purposes, unless otherwise prescribed by statute, may be called
at any time by the President or by the Secretary at the request in writing of a
majority of either the members of the Board of Directors or the stockholders
entitled to vote.
Section 3. Time and Place of Meetings. All meetings of the stockholders
shall be held at such times and places, within or without the State of Delaware,
as may from time to time be fixed by the Board of Directors or by the President
with respect to special meetings, or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 4. Notice of Meetings. Except as otherwise expressly required by
law, notice of each meeting of the stockholders shall be given, at least fifteen
(15) days in the case of an annual meeting, and ten (10) days in the case of a
special meeting, before the day on which the meeting is to be held, to each
stockholder of record entitled to vote at such meeting by mailing such notice in
a postage prepaid envelope addressed to the stockholder at the stockholder's
last post office address appearing on the stock records of the Corporation.
Except as otherwise expressly required by law, no publication of any notice of a
meeting of the stockholders shall be required. At special meetings of
stockholders no business other than that specified in the notice of the meeting
or germane thereto shall be transacted at such meeting. Except as otherwise
expressly required by law, notice of any adjourned meeting of the stockholders
need not be given. Notice of any meeting of stockholders may be waived in
writing by a majority of the stockholders entitled to vote thereat.
<PAGE>
Section 5. Quorum. At each meeting of the stockholders, except as
otherwise expressly required by law, stockholders holding a majority of the
shares of stock of the Corporation, issued and outstanding, and entitled to be
voted thereat, shall be present in person or by proxy to constitute a quorum for
the transaction of business. In the absence of a quorum at any such meeting or
any adjournment or adjournments thereof, a majority in voting interest of those
present in person or by proxy and entitled to vote thereat, or in the absence
therefrom of all the stockholders, any officer entitled to preside at, or to act
as secretary of, such meeting may adjourn such meeting from time to time until
stockholders holding the amount of stock requisite for a quorum shall be present
or represented. At any such adjourned meeting at which a quorum may be present
any business may be transacted which might have been transacted at the meeting
as originally called.
Section 6. Organization. At each meeting of the stockholders, one of the
following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the President;
(b) the Vice President designated by the Board of Directors to act as
chairman of said meetings and to preside thereat;
(c) a stockholder of record of the Corporation who shall be chosen
chairman of such meeting by a majority in voting interest of the stockholders
present in person or by proxy and entitled to vote thereat.
The Secretary, or, if he shall be absent from such meeting, the person (who
shall be an Assistant Secretary, if an Assistant Secretary shall be present
thereat) whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
Section 7. Order of Business. The order of business at each meeting of
the stockholders shall be determined by the chairman of such meeting, but such
order of business at any meeting at which a quorum is present may be changed by
the vote of a majority in voting interest of those present in person or by proxy
at such meeting and entitled to vote thereat, provided that at special meetings
of stockholders no business other than that specified in the notice of the
meeting or germane thereto shall be transacted.
Section 8. Voting. Each stockholder shall, at each meeting of the
stockholders, be entitled to one vote in person or by proxy for each share of
stock of the Corporation held by the stockholder and registered in the
stockholder's name on the books of the Corporation on the date fixed or
determined pursuant to the
-2-
<PAGE>
provisions of Section 5 of Article V of these Bylaws as the record date for the
determination of stockholders who shall be entitled to receive notice of and to
vote at such meeting.
Shares of its own stock belonging to the Corporation shall not be voted
directly or indirectly. Any vote on stock of the Corporation may be given at
any meeting of the stockholders by the stockholder entitled thereto in person or
by the stockholder's proxy appointed by an instrument in writing delivered to
the Secretary or an Assistant Secretary of the Corporation or to the secretary
of the meeting. The attendance at any meeting of a stockholder who may
theretofore have given a proxy shall not have the effect of revoking the same
unless the stockholder shall in writing so notify the secretary of the meeting
prior to the voting of the proxy. At all meetings of the stockholders all
matters, except as otherwise provided in these Bylaws or by law, shall be
decided by the vote of a majority in voting interest of the stockholders present
in person or by proxy and entitled to vote thereat, a quorum being present.
Subject to Article II, Section 3, the vote at any meeting of the stockholders on
any question need not be by ballot, unless so directed by the chairman of the
meeting. On a vote by ballot each ballot shall be signed by the stockholder
voting, or by the stockholder's proxy, if there be such proxy.
Section 9. List of Stockholders. It shall be the duty of the Secretary or
other officer of the Corporation who shall have charge of its stock ledger to
prepare and make, at least ten (10) days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose germane to
the meeting, during ordinary business hours, for a period of at least ten (10)
days prior to said meeting either at a place within the city where said meeting
is to be held and which place shall be specified in the notice of said meeting,
or, if not so specified, at the place where said meeting is to be held, and such
list shall be produced and kept at the time and place of said meeting during the
whole time thereof, and may be inspected by any stockholder who is present. The
stock ledger shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger or such list or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
Section 10. Inspectors or Judges. The Board of Directors, in advance of
any meeting of stockholders, may appoint one or more inspectors or judges to act
at such meeting or any adjournment thereof. If the inspectors or judges shall
not be so appointed, or if any of them shall fail to appear or act, the chairman
of such meeting shall appoint the inspectors or judges, or such replacement or
replacements therefor, as the case may be. Such inspectors or judges, before
entering on the discharge of their duties, shall take and sign an oath or
affirmation faithfully to execute the duties of inspectors or judges at meetings
for which they are appointed.
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<PAGE>
At such meeting, the inspectors or judges shall receive and take in charge the
proxies and ballots and decide all questions touching the qualification of
voters and the validity of proxies and the acceptance or rejection of votes. An
inspector or judge need not be a stockholder of the Corporation, and any officer
of the Corporation may be an inspector or judge on any question other than a
vote for or against his election to any position with the Corporation.
Section 11. Action Without a Meeting. Except as otherwise provided by law
or by the Certificate of Incorporation of the Corporation, any action which may
be taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE II.
-----------
Board of Directors
------------------
Section 1. General Powers. Subject to the provisions of the Certificate
of Incorporation of the Corporation, the business, properties and affairs of the
Corporation shall be managed by the Board of Directors, which, without limiting
the generality of the foregoing, shall have power to elect and appoint officers
of the Corporation, to appoint and direct agents, to grant general or limited
authority to officers, employees and agents of the Corporation, to make, execute
and deliver contracts and other instruments and documents in the name and on
behalf of the Corporation and over its seal, without specific authority in each
case, and, by resolution adopted by a majority of the whole Board of Directors,
to appoint committees of the Board of Directors, the membership of which may
consist of one or more directors, and which may, except as limited by the
Certificate of Incorporation of the Corporation, advise the Board of Directors
with respect to any matters relating to the conduct of the Corporation's
business. In addition, the Board of Directors may exercise all the powers of
the Corporation and do all lawful acts and things which are not reserved to the
stockholders by law or by the Certificate of Incorporation of the Corporation or
by these Bylaws.
Section 2. Number and Term. Subject to the requirements of the laws of
the State of Delaware, the number of directors shall be no less than three (3)
and no more than seven (7). Subject to Article IX of the Certificate of
Incorporation of the Corporation, each of the directors of the Corporation shall
hold office until the expiration of his term and until his successor shall be
elected or until their
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<PAGE>
earlier death, resignation, retirement, disqualification or removal. Directors
need not be stockholders.
Section 3. Election of Directors. Subject to the requirements of Article
IX of the Certificate of Incorporation of the Corporation, at each meeting of
the stockholders for the election of directors, at which a quorum is present,
the persons receiving the greatest number of votes, up to the number of
directors to be elected, shall be the directors. Such election shall be by
ballot, provided, however, a nomination shall be accepted and votes cast for a
nominee shall be counted by the inspectors or judges of the election, only if
the Secretary of the Corporation has received at least 24 hours prior to the
meeting a statement over the signature of the nominee that he consents to being
a nominee and, if elected, intends to serve as a director.
Section 4. Organization and Order of Business. At each meeting of the
Board, one of the following shall act as chairman of the meeting and preside
thereat, in the following order of precedence:
(a) the President;
(b) any Vice President designated by the Board of Directors; or
(c) any director chosen by a majority of the directors present thereat.
The Secretary, or in case of his absence any Assistant Secretary (who shall be
present thereat) or the person (who shall be present thereat) whom the chairman
of such meeting shall appoint, shall act as secretary of such meeting and keep
the minutes thereof. The order of business at each meeting of the Board of
Directors shall be determined by the chairman of such meeting.
Section 5. Resignations. Subject to the requirements of Article IX of the
Certificate of Incorporation of the Corporation, any director may resign at any
time by giving written notice of his resignation to the President or the
Secretary of the Corporation. Any such resignation shall take effect at the
time specified therein, or, if the time when it shall become effective shall not
be specified therein, then it shall take effect when accepted by action of the
Board of Directors. Except as aforesaid, the acceptance of such resignation
shall not be necessary to make it effective.
Section 6. Vacancies, etc. Subject to the requirements of Article IX of
the Certificate of Incorporation of the Corporation, in case of any vacancy on
the Board, a director to fill the vacancy for the unexpired portion of the term
may be elected by the holders of shares of stock of the Corporation entitled to
vote in respect
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<PAGE>
thereof at an annual or special meeting of said holders or by a majority of the
directors of the Corporation then in office though less than a quorum.
Section 7. Removal. Subject to the requirements of Article IX of the
Certificate of Incorporation of the Corporation, any director or directors may
be removed either for or without cause at any time by the affirmative vote of
the holders of a majority of all the shares of stock outstanding and entitled to
vote, at a special meeting of the stockholders called for that purpose, and the
vacancies thus created may be filled, at the meeting held for the purpose of
removal, by the affirmative vote of a majority in interest of the stockholders
entitled to vote.
Section 8. Increase of Number. Subject to the requirements of Article IX
of the Certificate of Incorporation of the Corporation, the number of directors
may be increased by amendment of these Bylaws by the affirmative vote of a
majority of the directors, though less than a quorum, or, by the affirmative
vote of a majority in interest of the stockholders, at the annual meeting or at
a special meeting called for that purpose, and by like vote the additional
directors may be chosen at such meeting to hold office until the next annual
election and until their successors are elected and qualified.
Section 9. Place of Meeting. The Board may hold its meetings at such
place or places within or without the State of Delaware as the Board may from
time to time by resolution determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 10. First Meeting. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of organization, the
election of officers and the transaction of other business; provided that a
quorum of the whole Board of Directors and the Director or Directors elected
pursuant to Article IX of the Certificate of Incorporation of the Corporation
shall be present at such meeting. Such meeting shall be held at the time and
place theretofore fixed by the Board for the next regular meeting of the Board
and no notice thereof need be given; provided, however, that the Board may
determine that such meeting shall be held at a different place and time but
notice thereof shall be given in the manner hereinafter provided for special
meetings of the Board.
Section 11. Regular Meetings. Regular meetings of the Board shall be held
at such times as the Board shall from time to time determine. Notices of
regular meetings need not be given. If any day fixed for a regular meeting
shall be a legal holiday at the place where the meeting is to be held, then the
meeting which would otherwise be held on that day shall be postponed until the
same hour on the same day of the next succeeding week in which such day shall
not be a legal holiday at such place, or at such other time and place as the
Board shall determine in which event notice thereof shall be given.
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<PAGE>
Section 12. Special Meetings: Notice. Special meetings of the Board shall
be held whenever called by the President or by one of the directors at the time
in office. The Secretary shall give notice to each director as hereinafter in
this Section provided of each such special meeting, in which shall be stated the
time and place of such meeting. Notice of each such meeting shall be mailed to
each director, addressed to the director at his residence or usual place of
business, at least ten (10) days before the day on which such meeting is to be
held, or shall be sent addressed to him at such place by facsimile, telegraph,
cable, wireless or other form of recorded communication, or be delivered
personally or by telephone not later than the day before the day on which such
meeting is to be held. Notice of any meeting of the Board need not, however, be
given to any director, if waived by him in writing or by facsimile, telegraph,
cable, wireless or other form of recorded communication, before, during or after
such meeting, or if he shall be present at such meeting, and any meeting of the
Board shall be a legal meeting without any notice thereof having been given if
all the directors of the Corporation then in office shall be present thereat.
Section 13. Quorum and Manner of Acting. Subject to the requirements of
the Certificate of Incorporation of the Corporation, and except as otherwise
provided in these Bylaws, the Certificate of Incorporation of the Corporation,
or by law, a majority of the members of the Board of Directors at the time in
office and the directors required by Article IX of the Certificate of
Incorporation of the Corporation shall be present in person at any meeting of
the Board of Directors in order to constitute a quorum for the transaction of
business at such meeting, and the affirmative vote of a majority of directors
present at any such meeting, at which a quorum is present, shall be necessary
for the adoption of any resolution or act of the Board. In the absence of a
quorum, a majority of the Board of Directors may adjourn any meeting, from time
to time, until a quorum is present. No notice of any adjourned meeting need be
given other than by announcement at the meeting that is being adjourned.
Section 14. Action by Consent. Unless otherwise restricted by the
Certificate of Incorporation, any action required or permitted to be taken at
any meeting of the Board of Directors, or of any committee thereof, may be taken
without a meeting, if prior to such action a written consent thereto is signed
by all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
Section 15. Committees. The Board of Directors may appoint standing
committees of its members. Unless otherwise restricted by the Certificate of
Incorporation of the Corporation, such committees shall have such powers as are
conferred by the Bylaws or authorized by the Board of Directors. The members of
all standing committees shall be appointed annually at the first meeting of the
Board of
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Directors after the annual meeting of the stockholders and shall continue as
members until their successors are appointed, subject to the power of the Board
to remove any member of a committee at any time and to appoint a successor. At
least one Independent Director, as defined in Article IX of the Certificate of
Incorporation, shall be a member of each such committee.
Section 16. Meeting by Communications Equipment. Members of the Board of
Directors or any committee appointed by the Board of Directors, may participate
in a meeting of the Board of Directors or of such committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
in a meeting shall constitute presence in person at such meeting.
ARTICLE III.
------------
Officers
--------
Section 1. Election. Appointment. Term of Office. The Executive
Officers of the Corporation shall consist of a President and such number of Vice
Presidents, if any, as the Board of Directors may determine from time to time.
There shall also be a Chief Financial Officer, who may also be the President or
a Vice President. There shall also be a Secretary.
Any officer may hold two or more offices, the duties of which can be
consistently performed by the same person.
The Board of Directors may also appoint such other officers and agents as
it may deem necessary, who shall have such authority and perform such duties as
may be prescribed by the Board.
All Executive Officers and other officers of the Corporation shall be
regularly elected or appointed by the majority vote of the whole Board of
Directors at its first meeting after the annual meeting of the stockholders and
shall hold office until the first meeting of the Board after the next annual
meeting of the stockholders, and until their successors are elected or
appointed.
If additional officers are elected or appointed during the year, they shall
hold office until the next annual meeting of the Board of Directors at which
officers are regularly elected or appointed and until their successors are
elected or appointed.
A vacancy in any office may be filled for the unexpired portion of the term
in the same manner as provided for election or appointment to such office.
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All officers and agents elected or appointed by the Board of Directors
shall be subject to removal at any time by the Board of Directors, either for or
without cause, by an affirmative vote of a majority of the entire Board of
Directors, at any regular meeting or at any special meeting.
Section 2. President. The President shall be the chief executive officer
of the Corporation, and shall have the powers and perform the duties incident to
that position. Subject to the Board of Directors, he shall be in general and
active charge of the entire business and all the affairs of the Corporation and
shall be its chief policy-making officer. He shall have the primary
responsibility for continuing the separate status of the Corporation from any
affiliated corporation and the proper segregation of corporate assets from the
assets of third parties who may have possession of assets of the Corporation.
He shall have general authority to execute bonds, deeds and contracts in the
name and on behalf of the Corporation and responsibility for the employment or
appointment of such employees, agents and officers (except officers to be
elected by the Board of Directors pursuant to Section 1 of this Article III) as
may be required to carry on the operations of the business, and he shall have
authority to fix the compensation of such agents and officers. He shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or provided herein.
Section 3. Vice Presidents. Each Vice President shall have such powers
and duties as shall be prescribed by the Board of Directors at the time of his
election and such other powers and duties as may be assigned to him from time to
time by the President or the Board of Directors.
Section 4. Chief Financial Officer. The Chief Financial Officer shall be
responsible for safeguarding the cash and securities of the Corporation and the
formulation of the investment and financial policies of the Corporation. He
shall keep a full and accurate account of all monies received and paid on
account of the corporation and shall render a statement of his accounts whenever
the Board of Directors shall require. He shall have such other powers and
duties as may be assigned to him by the President or the Board of Directors. In
the absence of the Chief Financial Officer, or such person as shall be
designated by the President shall perform the duties of the Chief Financial
Officer.
Section 5. Secretary. The Secretary shall attend to the giving of notice
of all meetings of stockholders and of the Board of Directors and committees
thereof, and as provided in Section 6 of Article I and Section 4 of Article II,
shall keep the minutes of all proceedings at meetings of the stockholders and of
the Board of Directors at which he is present, as well as of all proceedings at
all meetings of committees of the Board of Directors on which he has served as
secretary and, where some other person has served as secretary thereto, the
Secretary shall maintain
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custody of the minutes of such proceedings. He shall perform such other duties
as may be assigned to him from time to time by the President or the Board of
Directors.
ARTICLE IV.
-----------
Contracts, Checks, Drafts, Bank Accounts, Etc.
----------------------------------------------
Section 1. Execution of Documents by Officers. All of the Executive
Officers of the Corporation elected as provided in Section 1 of Article III of
the Bylaws, shall have power to execute and deliver any deeds, contracts,
mortgages, bonds, debentures and other documents for and in the name of the
Corporation.
All appointed officers shall have such powers with respect to execution and
delivery of deeds, contracts, mortgages, bonds, debentures and other documents
as may be assigned to them by the Board of Directors.
Section 2. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation or
otherwise as the Board of Directors, the President or the Chief Financial
Officer shall direct in such banks, trust companies or other depositories as the
Board of Directors may select or as may be selected by any officer or officers
or agent or agents of the Corporation to whom power in that respect shall have
been delegated by the Board of Directors. For the purpose of deposit and for
the purpose of collection for the account of the Corporation, checks, drafts and
other orders for the payment of money which are payable to the order of the
Corporation may be endorsed, assigned and delivered by any officer or agent of
the Corporation.
ARTICLE V.
----------
Shares and Their Transfer;
--------------------------
Examination of Books
--------------------
Section 1. Certificates for Stock. Every holder of stock of the
Corporation shall be entitled to have a certificate or certificates, in such
form as the Board shall prescribe, certifying the number of shares of stock of
the Corporation owned by the stockholder. The certificates representing shares
of such stock shall be numbered in the order in which they shall be issued and
shall be signed in the name of the Corporation by the person who was at the time
of signing the President or a Vice President and by the person who was at the
time of signing the Chief Financial Officer and its seal shall be affixed
thereto; provided, however, that the signature of such Executive Officer of the
Corporation and of such Chief Financial Officer and the seal of the Corporation
may be facsimile. In case any officer or officers of the Corporation who shall
have signed, or whose facsimile signature or
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signatures shall have been used on, any such certificate or certificates shall
cease to be such officer or officers, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Corporation such certificate or certificates may nevertheless be adopted by
the Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates, or whose facsimile signature or
signatures shall have been used thereon, had not ceased to be such officer or
officers. A record shall be kept of the respective names of the persons, firms
or corporations owning the stock represented by certificates for stock of the
Corporation, the number of shares represented by such certificates,
respectively, and the respective dates thereof, and in case of cancellation, the
respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be canceled and a new certificate or
certificates shall not be issued in exchange for any existing certificate until
such existing certificate shall have been so canceled except in cases provided
for in Section 4 of this Article VI.
Section 2. Transfers of Stock. Transfers of shares of the stock of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, or with a
transfer clerk or a transfer agent appointed as in Section 3 of this Article V
provided, and upon surrender of the certificate or certificates for such shares
properly endorsed and payment of all taxes thereon. The person in whose name
shares of stock stand on the books of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation.
Section 3. Regulations. The Board may make such rules and regulations as
it may deem expedient, not inconsistent with these Bylaws, concerning the issue,
transfer and registration of certificates for stock of the Corporation. The
Board may appoint or authorize any officer or officers to appoint one or more
transfer clerks, any of whom may be employees of the Corporation, or one or more
transfer agents and one or more registrars, and may require all certificates for
stock to bear the signature or signatures of any of them; provided, however,
that the signature of any transfer clerk, transfer agent, or registrar may be
facsimile. In case any transfer clerk, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such transfer clerk, transfer agent, or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such transfer clerk, transfer agent, or registrar at the date of
issue.
Section 4. Lost, Stolen, Destroyed and Mutilated Certificates. The owner
of any stock of the Corporation shall immediately notify the Corporation of any
loss, theft, destruction or mutilation of the certificate therefor, and the
Corporation may issue a new certificate of stock in the place of any certificate
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theretofore issued by the Corporation, which is delivered to the Corporation, in
the case of a mutilated certificate, or alleged to have been lost, stolen or
destroyed, and the Board may, in its discretion, require the owner of the lost,
stolen or destroyed certificate, or his legal representatives, to furnish
evidence to the Corporation, which it shall in its discretion determine is
satisfactory, of the loss, theft or destruction of such certificate and of the
ownership thereof, and to give the Corporation a bond in such sum, limited or
unlimited, and in such form and with such surety or sureties, as the Board shall
in its uncontrolled discretion determine, to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss or
destruction of any such certificate, or the issuance of such new certificate.
Section 5. Record Date. To determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which shall not be
more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. If no record
date is fixed by the Board of Directors:
(a) The record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given.
(b) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting unless the Board of Directors shall fix a new
record date for the adjourned meeting.
Section 6. Examination of Books by Stockholders. The Board may determine,
from time to time, whether and to what extent, at what times and places, and
under what conditions and regulations, the accounts and books of the
Corporation, or any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any account or
book or document of the Corporation, except as conferred by the laws of the
State of Delaware or as authorized by resolution adopted by the Board or by the
stockholders of the Corporation entitled to vote in respect thereof.
ARTICLE VI.
-----------
Offices, Etc.
-------------
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Section 1. Registered Office. The registered office of the Corporation in
the State of Delaware shall be in the City of Wilmington, County of New Castle,
and the name of the resident agent in charge thereof shall be The Corporation
Trust Corporation.
Section 2. Other Offices. The Corporation also may have an office or
offices other than said office in Section 1 of this Article VI at such place or
places, either within or without the State of Delaware, as provided in these
Bylaws or as the Board may from time to time appoint or as the business of the
Corporation may require.
Section 3. Books and Records. Except as otherwise required by law, the
Certificate of Incorporation or these Bylaws, the Corporation may keep the books
and records of the Corporation in such place or places within or without the
State of Delaware as the Board may from time to time by resolution determine or
the business of the Corporation may require.
ARTICLE VII.
------------
Dividends
---------
Subject to the provisions of law, of the Certificate of Incorporation of
the Corporation and of these Bylaws, the Board may declare and pay dividends
upon the shares of the stock of the Corporation either (a) out of its net assets
in excess of its capital as computed in accordance with the provisions of the
laws of the State of Delaware or (b) in case there shall be no such excess, out
of its net profits for the fiscal year then current and/or the preceding fiscal
year, whenever and in such amounts as, in the opinion of the Board, the
condition of the affairs of the Corporation shall render it advisable.
Dividends upon the shares of stock of the Corporation may be declared at any
regular meeting of the Board of Directors and also at a special meeting, if
notice of such proposed action is given as provided in Section 10 of Article II
of these Bylaws.
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ARTICLE VIII.
-------------
Seal
----
The corporate seal, if one is adopted by the Board of Directors, shall be
in the form as prescribed by the Board of Directors and shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal" and
"Incorporated 1994 Delaware." If the Board of Directors adopts a corporate
seal, such seal or a facsimile thereof may be impressed or affixed or reproduced
or other use made thereof by the Secretary or any Assistant Secretary or any
other officer authorized by the Board.
ARTICLE IX.
-----------
Fiscal Year
-----------
The fiscal year of the Corporation shall end on the 31st day of December in
each year.
ARTICLE X.
----------
Waiver of Notices
-----------------
Whenever any notice whatever is required to be given pursuant to these
Bylaws or by the Certificate of Incorporation of the Corporation or by the
Delaware General Corporation Law, a waiver thereof in writing, signed by the
person or persons entitled to said notice, or by facsimile, telegraph, cable,
wireless or other form of recorded communication, whether before or after the
time stated therein, or if such person shall attend a meeting, except when that
person attends such meeting for the express purpose of objections at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, shall be deemed equivalent thereto. Neither
the business to be transacted at, nor the purpose of, any meeting need be
specified in any notice or written notice of waiver unless so required by the
Certificate of Incorporation of the Corporation or by these Bylaws.
ARTICLE XI.
-----------
Indemnification
---------------
Section 1. Coverage. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he is or was a director, officer or
agent of the Corporation
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(which term shall include any predecessor corporation of the Corporation) or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans ("indemnitee"), whether the basis of such proceeding is alleged action in
an official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in Section 2 of this Article XI with respect
to proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification conferred in
this Article XI shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses incurred by a
director or officer in his capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made in advance of the final disposition of a proceeding only upon delivery to
the Corporation of an undertaking, by or on behalf of such indemnitee, to repay
all amounts so advanced if it ultimately be determined by final judicial
decision from which there is no further right to appeal that such indemnitee is
not entitled to be indemnified for such expenses under this Article XI or
otherwise. Expenses incurred by agents in defending in any action, suit or
proceeding, whether civil, criminal, administrative or investigative may be paid
by the Corporation upon such terms and conditions, if any, as the Board of
Directors deems appropriate.
Section 2. Claims. If a claim under Section 1 of this Article XI is not
paid in full by the Corporation within sixty (60) days after a written claim has
been received by the Corporation, except in the case of a claim for expenses
incurred in defending a proceeding in advance of its final disposition, in which
case the applicable period shall be twenty (20) days, the indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit or in a suit
brought by the
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Corporation to recover payments by the Corporation of expenses incurred by an
indemnitee in defending in his capacity as a director or officer, a proceeding
in advance of its final disposition, the indemnitee shall be entitled to be paid
also for the expense of prosecuting or defending such claim. In any action
brought by the indemnitee to enforce a right to indemnification hereunder (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the Corporation) or by the Corporation to recover
payments by the Corporation of expenses incurred by an indemnitee in defending,
in his capacity as a director or officer, a proceeding in advance of its final
disposition, the burden of proving that the indemnitee is not entitled to be
indemnified under this Article XI or otherwise shall be on the Corporation.
Neither the failure of the Corporation (including the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including the Board of Directors,
independent legal counsel or its stockholders) that the indemnitee has not met
such applicable standard of conduct, shall be a presumption that the indemnitee
has not met the applicable standard of conduct, or in the case of such an action
brought by the indemnitee, be a defense to the action.
Section 3. Rights Not Exclusive. The rights conferred on any person by
Sections 1 and 2 of this Article XI shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute, the
Certificate of Incorporation of the Corporation, these Bylaws, and any
agreement, vote of stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
Section 5. Employees. Persons who are not included as indemnitees under
Section 1 of this Article XI but are employees of the Corporation or any
subsidiary may be indemnified to the extent authorized at any time or from time
to time by the Board of Directors.
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ARTICLE XII.
------------
Miscellaneous
-------------
Section 1. Amendments. These Bylaws, as they shall be at any time, may be
amended, altered or repealed by the Board of Directors at any regular meeting of
the Board of Directors or at any special meeting if the proposed amendment,
alteration or repeal is stated in the notice of the special meeting; provided
that in no event shall any amendment, alteration or repeal of any Bylaw in any
manner impair, or impair the intent of, or be inconsistent with, the Certificate
of Incorporation of the Corporation.
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