<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 29, 1995
REGISTRATION NO. 33-63575
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
GREEN TREE FINANCIAL CORPORATION
(ORIGINATOR OF THE TRUSTS DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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41-1263905 (I.R.S. EMPLOYER IDENTIFICATION
NO.)
DELAWARE (STATE OR OTHER
JURISDICTION OF 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)
--------------
JOEL H. GOTTESMAN, ESQ.
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, ESQ. DORSEY &
WHITNEY P.L.L.P. 220 SOUTH SIXTH
STREET MINNEAPOLIS, MINNESOTA
55402 (612) 340-2600
CATHY M. KAPLAN, ESQ. BROWN & WOOD ONE WORLD
TRADE CENTER NEW YORK, NEW YORK 10048 (212)
839-5531
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
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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. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Asset-Backed Securi-
ties.................. $400,000,000 100% $400,000,000 $137,931.04(2)
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Limited Guaranty of
Green Tree Financial
Corporation........... (3) (3) (3) (3)
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Of this amount, $80,144.83 has been previously paid and $57,786.21 is
being paid herewith.
(3) No additional consideration will be paid for the Limited Guaranty;
accordingly, no additional filing fee is being paid herewith pursuant to
Rule 457(n).
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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 THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 29, 1995
PROSPECTUS
GREEN TREE ASSET RECEIVABLES TRUSTS
ASSET-BACKED CERTIFICATES
ASSET-BACKED NOTES
-----------
GREEN TREE FINANCIAL CORPORATION
(SELLER AND SERVICER)
-----------
The Asset-Backed Certificates (the "Certificates") and the Asset-Backed Notes
(the "Notes" and, collectively with the Certificates, the "Securities")
described herein may be sold from time to time in one or more series, in
amounts, at prices and on the terms to be determined at the time of sale and to
be set forth in a supplement to this Prospectus (a "Prospectus Supplement").
Each series of Securities will include either one or more classes of
Certificates or, if Notes are issued as part of a series, one or more classes
of Notes and one or more classes of Certificates, as set forth in the related
Prospectus Supplement.
The Certificates and the Notes, if any, of any series of Securities will be
issued by a trust (a "Trust") to be formed with respect to such series by Green
Tree Financial Corporation ("Green Tree"). The assets of each Trust (the "Trust
Property") will include a pool of retail installment sales contracts and
promissory notes (the "Contracts") for the purchase of a variety of consumer
products, as further described under "Green Tree Financial Corporation" herein
(collectively, the "Products"). The Trust Property will also include certain
monies paid or payable under the Contracts after the Cutoff Date set forth in
the related Prospectus Supplement (the "Cutoff Date"), an assignment of Green
Tree's security interests in the Products financed thereby, and certain other
property, as more fully described herein and in the related Prospectus
Supplement. In addition, if so specified in the related Prospectus Supplement,
the Trust Property will include monies on deposit in one or more trust accounts
to be established with an Indenture Trustee, which may include a Pre-Funding
Account which would be used to purchase additional Contracts (the "Subsequent
Contracts") from the Seller from time to time during the Pre-Funding Period
specified in the related Prospectus Supplement.
Each Trust will be formed pursuant to either (i) a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") to be entered into between
Green Tree, as Seller and Servicer, and the Trustee specified in the related
Prospectus Supplement (the "Trustee") or (ii) a Trust Agreement (the "Trust
Agreement") to be entered into among the Seller, the Trustee and certain other
parties as specified in the related Prospectus Supplement. If the Trust is
formed pursuant to a Trust Agreement, a Sale and Servicing Agreement (the "Sale
and Servicing Agreement") will be entered into among Green Tree, as Seller and
Servicer, the related Trust and the Trustee). The Pooling and Servicing
Agreement or the Trust Agreement and the Sale and Servicing Agreement are
collectively referred to herein as the "Trust Documents." The Notes, if any, of
a series will be issued and secured pursuant to an Indenture (the "Indenture")
between the Trust and the Indenture Trustee specified in the related Prospectus
Supplement (the "Indenture Trustee").
Except as otherwise provided in the related Prospectus Supplement, each class
of Securities of any series will represent the right to receive a specified
amount of payments of principal and interest on the related Contracts in the
manner described herein and in the related Prospectus Supplement. The right of
each class of Securities to receive payments may be senior or subordinate to
the rights of one or more of the other classes of such series. A series may
include two or more classes of Certificates or Notes which differ as to the
timing and priority of payment, interest rate or amount of distributions in
respect of principal or interest or both. A series may include one or more
classes of Certificates or Notes entitled to distributions in respect of
principal, with disproportionate, nominal or no interest distributions, or to
interest distributions, with disproportionate, nominal or no distributions in
respect of principal. Distributions on Certificates of any series will be
subordinated in priority to payments due on the related Notes, if any, to the
extent described herein and in the related Prospectus Supplement. The
Certificates will represent fractional undivided interests in the related
Trust.
Each class of Securities will represent the right to receive distributions or
payments in the amounts, at the rates, and on the dates set forth in the
related Prospectus Supplement. The rate of distributions in respect of
principal on Certificates and payment in respect of principal on Notes, if any,
of any class will depend on the priority of payment of such class and the rate
and timing of payments (including prepayments, liquidations and repurchases of
Contracts) on the related Contracts.
If specified in the related Prospectus Supplement, a financial guaranty
insurance policy, letter of credit, surety bond, Green Tree guaranty, cash
reserve fund, or other form of credit enhancement, or any combination thereof,
may be provided with respect to a Trust or any class of Securities.
Unless otherwise provided in the related Prospectus Supplement, the
Certificates and the Notes, if any, of any series initially will be represented
by certificates and notes registered in the name of Cede & Co., the nominee of
The Depository Trust Company ("DTC"). The interests of beneficial owners of the
Securities will be represented by book entries on the records of the
participating members of DTC. Definitive Securities will be available only
under limited circumstances.
There currently is no secondary market for the Securities. There can be no
assurance that any such market will develop or, if it does develop, that it
will continue. The Securities will not be listed on any securities exchange.
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SECURITIES, SEE "RISK FACTORS" AT PAGE 10 HEREIN AND AT PAGE
[S-7/S-12] IN THE RELATED PROSPECTUS SUPPLEMENT.
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THE CERTIFICATES REPRESENT INTERESTS IN AND THE NOTES REPRESENT OBLIGATIONS
OF THE RELATED TRUST AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF GREEN
TREE (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN AND IN THE RELATED
PROSPECTUS SUPPLEMENT) OR ANY AFFILIATE OF GREEN TREE.
-----------
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.
-----------
Retain this Prospectus for future reference. This Prospectus may not be used
to consummate sales of securities offered hereby unless accompanied by a
Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS , 1995
<PAGE>
AVAILABLE INFORMATION
Green Tree, as originator of each Trust, has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement (together with
all amendments and exhibits thereto, referred to herein as the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
Securities offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement which is available for
inspection without charge at the office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the Commission at
Seven World Trade Center, Suite 1300, New York, New York 10048 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and copies of which may be obtained from the Commission
at prescribed rates.
REPORTS TO SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, unless and
until Definitive Certificates or Definitive Notes are issued, unaudited
monthly and annual reports, containing information concerning each Trust and
prepared by the Servicer, will be sent on behalf of the Trust to the Trustee
for the Certificateholders, the Indenture Trustee for the Noteholders and Cede
& Co., as registered holder of the Certificates and the Notes and the nominee
of DTC. See "Certain Information Regarding the Securities--Statements to
Securityholders" and "--Book-Entry Registration." Certificateholders and
Noteholders are collectively referred to herein as the "Securityholders."
Certificate Owners or Note Owners may receive such reports, upon written
request, together with a certification that they are Certificate Owners or
Note Owners and payment of reproduction and postage expenses associated with
the distribution of such reports, from the Trustee, with respect to
Certificate Owners, or the Indenture Trustee, with respect to Note Owners, at
the addresses specified in the related Prospectus Supplement. Such reports
will not constitute financial statements prepared in accordance with generally
accepted accounting principles. Green Tree does not intend to send any of its
financial reports to Securityholders. The Servicer, on behalf of each Trust,
will file with the Commission periodic reports concerning each Trust to the
extent required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder.
However, in accordance with the Exchange Act and the rules and regulations of
the Commission thereunder, Green Tree expects that each Trust's obligation to
file such reports will be terminated following the end of the year in which
such Trust is formed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Green Tree's Annual Report on Form 10-K for the year ended December 31,
1994, and Quarterly Reports on Form 10-Q for the periods ended March 31 and
June 30, 1995, which have been filed with the Commission, are hereby
incorporated by reference in this Prospectus and the related Prospectus
Supplement.
All documents filed by the Servicer on behalf of each Trust pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the related
Securities shall be deemed to be incorporated by reference into this
Prospectus and the related Prospectus Supplement and to be a part hereof and
thereof from the respective dates of filing of such documents. Any statement
contained herein or in a document all or any portion of which is deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the related Prospectus Supplement to the
extent that a statement contained herein or in any other subsequently filed
document which also is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus or the related Prospectus Supplement.
Green Tree will provide without charge to any person to whom this Prospectus
is delivered, upon the written or oral request of such person, a copy of any
or all of the foregoing documents incorporated herein by reference (other than
certain exhibits to such documents). Requests for such copies should be
directed to Chief Financial Officer, Green Tree Financial Corporation, 1100
Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639,
telephone number (612) 293-3400.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to
the information with respect to the Securities contained in the related
Prospectus Supplement to be prepared and delivered in connection with the
offering of each series of Securities. Certain capitalized terms used in this
Prospectus Summary are defined elsewhere in this Prospectus and in the related
Prospectus Supplement.
<TABLE>
<S> <C>
Issuer.............................. With respect to each series of Securities,
a trust (the "Trust") will be formed by
Green Tree pursuant to either a Pooling and
Servicing Agreement between Green Tree, in
its capacity as Seller and as Servicer (in
such capacity referred to herein as the
"Servicer"), and the Trustee specified in
the related Prospectus Supplement (each
such trust, a "grantor trust"), or a Trust
Agreement between the Seller, the Trustee
specified in the related Prospectus
Supplement and certain other parties as
specified in the related Prospectus
Supplement (each such trust, an "owner
trust").
Seller and Servicer................. Green Tree Financial Corporation. See
"Green Tree Financial Corporation."
Trustee............................. The Trustee for a grantor trust or the
Owner Trustee for an owner trust, in each
case as specified in the related Prospectus
Supplement. The Trustee or Owner Trustee
for any Trust will be referred to in this
Prospectus as the "Trustee," although the
Prospectus Supplement relating to an owner
trust that issues Notes will refer to the
Trustee as the "Owner Trustee" in order to
distinguish the Owner Trustee and the
Indenture Trustee for such Series. See
"Description of the Trust Documents--The
Trustee."
Indenture Trustee................... With respect to any Series of Securities
including one or more classes of Notes, the
Indenture Trustee specified in the related
Prospectus Supplement (the "Indenture
Trustee").
The Certificates.................... Each series of Securities will include one
or more classes of Certificates which will
be issued pursuant to the related Trust
Documents.
Unless otherwise specified in the related
Prospectus Supplement, Certificates will be
available for purchase in denominations of
$1,000 and in integral multiples thereof
and will be available in book-entry form
only. Unless otherwise specified in the
related Prospectus Supplement, beneficial
owners of Certificates ("Certificate
Owners") will be able to receive Definitive
Certificates only in the limited
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
circumstances described herein or in the
related Prospectus Supplement. See "Certain
Information Regarding the Securities--Book-
Entry Registration."
Unless otherwise specified in the related
Prospectus Supplement, each class of
Certificates will have a stated Certificate
Balance (as defined in the related
Prospectus Supplement) and will accrue
interest on such Certificate Balance at a
specified rate (with respect to each class
of Certificates, the "Pass-Through Rate").
Each class of Certificates may have a
different Pass-Through Rate, which may be a
fixed, variable or adjustable Pass-Through
Rate, or any combination of the foregoing.
The related Prospectus Supplement will
specify the Pass-Through Rate for each
class of Certificates, or the initial Pass-
Through Rate and the method for determining
subsequent changes to the Pass-Through
Rate.
A series may include two or more classes of
Certificates which differ as to timing of
distributions, sequential order, priority
of payment, seniority, allocation of loss,
Pass-Through Rate or amount of
distributions in respect of principal or
interest, or as to which distributions in
respect of principal or interest on any
class may or may not be made upon the
occurrence of specified events or on the
basis of collections from designated
portions of the Contract Pool. In addition,
a series may include one or more classes of
Certificates ("Strip Certificates")
entitled to (i) distributions in respect of
principal with disproportionate, nominal or
no interest distributions, or (ii) interest
distributions, with disproportionate,
nominal or no distributions in respect of
principal.
With respect to any series of Securities
including one or more classes of Notes,
distributions in respect of the
Certificates may be subordinated in
priority of payment to payments on the
Notes, to the extent specified in the
related Prospectus Supplement.
If the Seller or Servicer exercises its
option to purchase the Contracts of a Trust
on the terms and conditions described below
under "Description of the Trust Documents--
Termination," Certificate Owners will
receive an amount in respect of the
Certificates as specified in the related
Prospectus Supplement. In addition, if the
related Prospectus Supplement provides that
the property of a Trust will include a Pre-
Funding Account (as such term is defined in
the related Prospectus Supplement, the
"Pre-Funding Account"),
</TABLE>
4
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<TABLE>
<S> <C>
Certificate Owners will receive a
distribution in respect of principal on or
immediately following the end of the
funding period specified in the related
Prospectus Supplement (the "Pre-Funding
Period") in an amount and manner specified
in the related Prospectus Supplement.
The Notes........................... With respect to any series of Securities
including one or more classes of Notes,
such Notes will be issued pursuant to an
Indenture.
Unless otherwise specified in the related
Prospectus Supplement, Notes will be
available for purchase in denominations of
$1,000 and integral multiples thereof, and
will be available in book-entry form only.
Unless otherwise specified in the related
Prospectus Supplement, beneficial owners of
Notes ("Note Owners") will be able to
receive Definitive Notes only in the
limited circumstances described herein or
in the related Prospectus Supplement. See
"Certain Information Regarding the
Securities--Book-Entry Registration."
Unless otherwise specified in the related
Prospectus Supplement, each class of Notes
will have a stated principal amount and
will bear interest at a specified rate or
rates (with respect to each class of Notes,
the "Interest Rate"). Each class of Notes
may have a different Interest Rate, which
may be a fixed, variable or adjustable
Interest Rate, or any combination of the
foregoing. The related Prospectus
Supplement will specify the Interest Rate
and the method for determining subsequent
changes to the Interest Rate.
A series may include two or more classes of
Notes which differ as to the timing and
priority of payment, seniority, allocations
of loss, Interest Rate or amount of
payments of principal or interest, or as to
which payments of principal or interest may
or may not be made upon the occurrence of
specified events or on the basis of
collections from designated portions of the
Contract Pool. In addition, a series may
include one or more classes of Notes
("Strip Notes") entitled to (i) principal
payments with disproportionate, nominal or
no interest payments or (ii) interest
payments with disproportionate, nominal or
no principal payments.
If the Seller or the Servicer exercises its
option to purchase the Contracts of a Trust
on the terms and conditions described below
under "Description of the Trust Documents--
Termination," the outstanding Notes, if
any, of such series will be redeemed as set
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
forth in the related Prospectus Supplement.
In addition, if the related Prospectus
Supplement provides that the property of a
Trust will include a Pre-Funding Account,
the outstanding Notes, if any, of such
series will be subject to partial
redemption on or immediately following the
end of the Pre-Funding Period in an amount
and manner specified in the related
Prospectus Supplement. In the event of such
partial redemption, the Note Owners may be
entitled to receive a prepayment premium
from the Trust, in the amount and to the
extent provided in the related Prospectus
Supplement.
Trust Property...................... Each Certificate will represent a
fractional undivided interest in, and each
Note, if any, will represent an obligation
of, the related Trust. The assets of each
Trust (the "Trust Property") will include,
among other things, a pool (the "Contract
Pool") of retail installment sales
contracts and promissory notes (the
"Contracts") for the purchase of a variety
of consumer products as further described
under "Green Tree Financial Corporation"
herein (collectively, the "Products"),
certain monies paid or payable thereunder
on or after the Cutoff Date (as specified
in the related Prospectus Supplement), an
assignment of Green Tree's security
interests in the Products and of the right
to receive proceeds from claims on certain
insurance policies covering the Products or
the Obligors, the assignment of certain
rights of Green Tree against the Dealers
originating such Contracts, the Collection
Account, including all investments therein,
all income from the investment of funds
therein and all proceeds thereof, certain
other accounts and the proceeds thereof and
certain other rights under the Trust
Documents. In addition, if so specified in
the related Prospectus Supplement, the
Trust Property will include monies on
deposit in a Pre-Funding Account to be
established with the Indenture Trustee or
the Trustee, which will be used to purchase
Subsequent Contracts (as defined below)
from the Seller from time to time during
the Pre-Funding Period specified in the
related Prospectus Supplement, as well as
any Subsequent Contracts so purchased. See
"The Trusts."
If and to the extent provided in the
related Prospectus Supplement, the related
Trust will be obligated to purchase from
Green Tree (subject to the satisfaction of
certain conditions described in the
applicable Sale and Servicing Agreement),
additional Contracts (the "Subsequent
Contracts") from time to time (as
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
frequently as daily) during the Pre-Funding
Period specified in the related Prospectus
Supplement having an aggregate principal
balance approximately equal to the amount
on deposit in the Pre-Funding Account (the
"Pre-Funded Amount") on such Closing Date.
Green Tree will be obligated to repurchase
Contracts upon the occurrence of certain
breaches of representations and warranties
(a "Repurchase Event"). See "Description of
the Trust Documents--Sale and Assignment of
the Contracts" and "--Servicing
Procedures."
Enhancement......................... If and to the extent specified in the
related Prospectus Supplement, enhancement
with respect to a Trust or any class of
Securities may include any one or more of
the following: a financial guaranty
insurance policy, letter of credit, Green
Tree guaranty, cash reserve fund,
derivative product, or other form of credit
enhancement, or any combination thereof.
The enhancement with respect to any Trust
or any class of Securities may be
structured to provide protection against
delinquencies and/or losses on the
Contracts, against changes in interest
rates, or other risks, to the extent and
under the conditions specified in the
related Prospectus Supplement. Unless
otherwise specified in the related
Prospectus Supplement, any form of
enhancement will have certain limitations
and exclusions from coverage thereunder,
which will be described in the related
Prospectus Supplement. Further information
regarding any provider of credit
enhancement, including financial
information when material, will be included
in the related Prospectus Supplement. See
"Description of the Trust Documents--
Enhancement."
Servicing........................... The Servicer will be responsible for
managing, administering, servicing and
making collections on the Contracts held by
each Trust. Unless otherwise specified in
the related Prospectus Supplement, with
respect to each series of Securities
compensation to the Servicer will include a
monthly fee (the "Servicing Fee") which
will be payable from the related Trust to
the Servicer on each Distribution Date, in
an amount equal to the product of one-
twelfth of % per annum multiplied by the
aggregate principal balance of the
Contracts (the "Aggregate Principal
Balance") as of the first day of the prior
calendar month, plus any late fees and
other administrative fees and expenses or
similar charges collected with respect to
the Contracts during such Monthly Period.
See "Description of the Trust Documents--
Servicing Compensation."
</TABLE>
7
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<TABLE>
<S> <C>
Contracts......................... The Contracts forming part of the Trust
Property of each Trust were or will have
been originated by
Dealers and sold by the Dealers to Green
Tree in the ordinary course of business.
The Contracts will generally be prepayable
at any time without penalty to the
purchaser of the related Product or other
person or persons who are obligated to make
payments thereunder (each, an "Obligor").
See "The Contracts." Information with
respect to each Contract Pool, including
the proportions of each type of Product
financed, the weighted average annual
percentage rate and the weighted average
remaining maturity, will be set forth in
the related Prospectus Supplement.
Collection Account................ With respect to each series of Securities,
the Servicer will establish and maintain
one or more separate accounts (the
"Collection Account") in the name of the
Trustee or, in the case of any series
including one or more classes of Notes, in
the name of the Indenture Trustee for the
benefit of the Certificate Owners and the
Note Owners. All payments from Obligors
that are received by the Servicer on behalf
of each Trust will be deposited in the
related Collection Account no later than
two Business Days after receipt thereof.
Unless otherwise specified in the related
Prospectus Supplement, all payments from
Obligors and all proceeds (net of
reasonable expenses of collection) with
respect to Liquidated Contracts
("Liquidation Proceeds") that are received
by the Servicer will be deposited in the
related Collection Account no later than
one Business Day after receipt thereof.
Unless otherwise specified in the related
Prospectus Supplement, the Servicer will be
permitted to use any alternative remittance
schedule acceptable to the Rating Agencies
(as defined below). See "Description of the
Trust Documents--Collections."
Mandatory Purchase of Certain With respect to each series of Securities,
Contracts........................ Green Tree will make certain
representations and warranties relating to
the Contracts held by the related Trust to
the Trustee for the benefit of the related
Trust and if such series of Securities
includes one or more classes of Notes, the
Trustee will assign its right to enforce
such representations and warranties to the
related Indenture Trustee as collateral for
the Notes. The Trustee and the Indenture
Trustee, if any, will be entitled to
require that Green Tree repurchase any
Contract if the interests of the
Certificate Owners, the Note Owners, if
any, or the related Trust therein are
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<S> <C>
materially and adversely affected by a
breach of any such representation or
warranty (a "Repurchase
Event"). See "Description of the Trust
Documents--Sale and Assignment of the
Contracts."
Optional Purchase of Contracts..... Unless otherwise specified in the related
Prospectus Supplement, with respect to each
series of Securities, the Seller or the
Servicer may purchase all the
Contracts held by the related Trust on any
Distribution Date following the first
Monthly Period as of which the Aggregate
Principal Balance has declined to 10% or
less (or such other percentage as may be
specified in the related Prospectus
Supplement) of the Cutoff Date Principal
Balance, subject to certain provisions in
the related Trust Documents. See
"Description of the Trust Documents--
Termination."
Tax Status......................... If the Trust is structured as an owner
trust, in the opinion of Counsel to the
Seller, for federal income tax purposes,
the Notes will be characterized as debt and
the Trust will not be characterized as an
association or a publicly traded
partnership taxable as a corporation. Each
Noteholder, by the acceptance of a Note,
will agree to treat the Notes as debt. Each
Certificateholder, by the acceptance of a
Certificate, will agree to treat the Trust
as a partnership in which the
Certificateholders are partners for federal
income tax purposes. Alternative
characterizations of the Trust, the Notes
and the Certificates are possible,
but would not result in materially adverse
tax consequences to Noteholders or
Certificateholders. See "Certain Federal
Income Tax Consequences--Owner Trust
Series" herein.
If the Trust is structured as a grantor
trust, in the opinion of Counsel to the
Seller, for federal income tax purposes,
the Trust will be classified as a grantor
trust and not as an association which is
taxable as a corporation. Each
Certificateholder will be treated as the
owner of an undivided interest in the
Contracts and other Trust Property. See
"Certain Federal Income Tax Consequences--
Grantor Trust Series" herein.
ERISA Considerations .............. Subject to the considerations discussed
under "ERISA Considerations" herein and in
the related Prospectus Supplement, and
unless otherwise specified in the related
Prospectus Supplement, the Notes will be
eligible for purchase by employee benefit
plans. The related Prospectus Supplement
will provide further information with
respect to the eligibility of a class of
Certificates for purchase
</TABLE>
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<TABLE>
<S> <C>
by employee benefit plans. See "ERISA
Considerations" herein and in the related
Prospectus Supplement.
Rating............................. As a condition of issuance, the Securities
of each series offered pursuant to this
Prospectus will be rated in one of the four
highest rating categories by at least one
nationally recognized rating agency (a
"Rating Agency"). There is no assurance
that the rating initially assigned to such
Securities will not be subsequently lowered
or withdrawn by the Rating Agency. In the
event the rating initially assigned to any
Securities is subsequently lowered for any
reason, no person or entity will be
obligated to provide any credit enhancement
in addition to the credit enhancement, if
any, specified in the related Prospectus
Supplement.
Registration of Certificates....... Unless otherwise specified in the related
Prospectus Supplement, the Certificates and
the Notes, if any, of each series will be
registered in the name of Cede & Co., as
the nominee of DTC, and will be available
for purchase only in book-entry form on the
records of DTC and participating members
thereof. Certificates and Notes will be
issued in definitive form only under the
limited circumstances described herein. All
references herein to "Holders" or
"Certificateholders" or "Noteholders" shall
reflect the rights of beneficial owners of
Certificates (the "Certificate Owners") or
of Notes ("Note Owners"), as the case may
be, as they may indirectly exercise such
rights through DTC and participating
members thereof, except as otherwise
specified herein or in the related
Prospectus Supplement. See "Description of
the Trust Documents--Book-Entry
Registration."
</TABLE>
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RISK FACTORS
CERTAIN LEGAL ASPECTS RELATING TO THE OWNERSHIP AND ENFORCEABILITY OF THE
CONTRACTS
With respect to each series of Securities, the transfer of the Contracts to
the related Trust will be subject to the requirements of the Uniform
Commercial Code (the "UCC") as in effect in Minnesota. The Seller will take or
cause to be taken such action as is required to perfect the Trust's rights in
the Contracts.
Unless otherwise provided in the related Prospectus Supplement, Green Tree
will hold the Contract Files (as defined below) on behalf of each Trust under
a custodial agreement with the Trust. To facilitate servicing and save
administrative costs, the documents will not be physically segregated from
other similar documents that are in Green Tree's possession. UCC financing
statements will be filed in Minnesota reflecting the sale and assignment of
the Contracts to the Trustee, and Green Tree's accounting records and computer
systems will also reflect such sale and assignment. In addition, the Contracts
will be stamped or otherwise marked to indicate that such Contracts have been
sold to the related Trust. Despite these precautions, if, through inadvertence
or otherwise, any of the Contracts were sold to another party (or a security
interest therein were granted to another party) that purchased (or took such
security interest in) any of such Contracts in the ordinary course of its
business and took possession of such Contracts, the purchaser (or secured
party) would acquire an interest in the Contracts superior to the interest of
the related Trust if the purchaser (or secured party) acquired (or took a
security interest in) the Contracts for new value and without actual knowledge
of such Trust's interest.
Due to the administrative burden and expense, the documents reflecting Green
Tree's security interest in the Products will not be amended to reflect the
assignment of the security interests in the Products by Green Tree to the
Trustee. In the absence of such an amendment, the Trustee may not have a
perfected security interest in the Products. Moreover, statutory liens for
repairs or unpaid taxes may have priority even over perfected security
interests in the Products. See "Description of the Trust Documents--Sale and
Assignment of the Contracts" and "Certain Legal Aspects of the Contracts."
GREEN TREE'S EXPERIENCE WITH THE PRODUCTS
Green Tree began originating and servicing retail installment contracts for
recreational vehicles in 1985 and for motorcycles in 1988 but has less
extensive underwriting and servicing experience with the other types of
products financed by Contracts that will be included in a Trust. Green Tree's
extensive experience in originating and servicing consumer financing contracts
for certain types of products, including manufactured housing, may not be
directly applicable to the servicing of consumer financing contracts secured
by other types of products.
RISKS TO INVESTORS UPON ANY INSOLVENCY OF GREEN TREE
Green Tree intends that any transfer of Contracts to the related Trust will
constitute a sale, rather than a pledge of the Contracts to secure
indebtedness of Green Tree. However, if Green Tree were to become a debtor
under the federal bankruptcy code or similar applicable state laws
(collectively, "Insolvency Laws"), a creditor or trustee in bankruptcy of
Green Tree or Green Tree as debtor-in-possession might argue that such sale of
Contracts by Green Tree was a pledge of the Contracts rather than a sale. This
position, if presented to or accepted by a court, could cause the related
Trust to experience a delay in or reduction of collections on the Contracts.
A case decided by the United States Court of Appeals for the Tenth Circuit,
Octagon Gas Systems, Inc. v. Rimmer, contains language to the effect that
accounts sold by an entity that subsequently became bankrupt remained property
of the debtor's bankruptcy estate. Although the Contracts constitute chattel
paper rather than accounts under the UCC, sales of chattel paper, like sales
of accounts, are governed by Article 9 of the UCC. If Green Tree were to
become a debtor under any Insolvency Law and a court were to follow the
reasoning of the Tenth Circuit Court of Appeals and apply such reasoning to
chattel paper, a Trust could experience a delay in or reduction of collections
on the Contracts.
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SUBORDINATION OF CERTAIN CLASSES OF SECURITIES; LIMITED ASSETS
To the extent specified in the related Prospectus Supplement, distributions
of interest and principal on some or all classes of Securities of a series may
be subordinated in priority of payment to interest and principal due on the
Notes (if any) of such series and/or to distributions of interest and
principal on other classes of Securities of such series. In addition, holders
of certain classes of Securities of any series may have the right to take
actions that are detrimental to the interests of the holders of Securities of
certain other classes of Securities of such series. For example, holders of a
class of more senior Securities may be entitled to instruct the Indenture
Trustee or Trustee to liquidate the Trust Property when it is not in the
interest of holders of more junior classes of Securities of such series to do
so. Conversely, certain actions may require the consent of a majority of
Security Owners of all classes of a series, which may mean that Security
Owners of more junior classes can prevent the Security Owners of more senior
classes of such series from taking action. Moreover, no Trust will have any
significant assets or sources of funds other than the Contracts and, to the
extent provided in the related Prospectus Supplement, a Pre-Funding Account
and any credit enhancement specified in the related Prospectus Supplement. The
Notes, if any, of any series will represent obligations solely of, and the
Certificates of such series will represent interests solely in, the related
Trust, and neither the Notes nor the Certificates of any such series will be
insured or guaranteed by Green Tree, the Servicer, the applicable Owner
Trustee, the applicable Indenture Trustee or, except as specified in the
related Prospectus Supplement, any other person or entity. Consequently,
holders of the Securities of any series must rely for payment upon payments on
the related Contracts and, if and to the extent available, amounts on deposit
in the Pre-Funding Account, if any, and any credit enhancement, if any, as
specified in the related Prospectus Supplement. If specified in the related
Prospectus Supplement, credit enhancement for a class of Securities of a
series may cover one or more other classes of Securities of such series, and
accordingly may be exhausted for the benefit of some classes and thereafter be
unavailable for such other classes.
YIELD AND PREPAYMENT CONSIDERATIONS
The weighted average life of the Securities will be reduced by full or
partial prepayments on the Contracts. The Contracts will generally be
prepayable at any time without penalty. Prepayments (or, for this purpose,
equivalent payments to the related Trust) may result from payments by
Obligors, liquidations due to default, the receipt of proceeds from physical
damage or credit insurance, repurchases by Green Tree as a result of certain
uncured breaches of the warranties made by it with respect to the Contracts,
purchases by the Servicer as a result of certain uncured breaches of the
covenants with respect to the Contracts made by it in the related Agreement,
or Green Tree or the Servicer exercising its option to purchase all of the
remaining Contracts.
Unless otherwise specified in the related Prospectus Supplement, the amounts
paid to Securityholders in respect of principal on any Distribution Date will
include all prepayments on the Contracts during the corresponding Monthly
Periods. The Certificate Owners and the Note Owners will bear all reinvestment
risk resulting from the timing of payments of principal on the Securities.
LIMITED LIQUIDITY OF THE SECURITIES
There is currently no market for the Securities of any series. Although
Green Tree expects that the underwriters of any particular series will intend
to make a secondary market for such Securities, they will have no obligation
to do so. There can be no assurance that any such market will develop or, if
it does develop, that it will provide Certificate Owners or Note Owners with
liquidity of investment or will continue for the life of the Securities. The
Securities will not be listed on any securities exchange.
Unless otherwise specified in the related Prospectus Supplement, the
Securities will be issued in book-entry, rather than physical, form and, as a
result, in certain circumstances, the liquidity of the Securities in the
secondary market and the ability of the Certificate Owners and Note Owners to
pledge them may be adversely affected. See "Plan of Distribution" and "Certain
Information Regarding the Securities--Book-Entry Registration."
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<PAGE>
THE TRUSTS
With respect to each series of Securities, Green Tree will establish a Trust
pursuant to the related Trust Documents. Prior to the sale and assignment of
the related Contracts pursuant to the related Trust Documents, the Trust will
have no assets or obligations. The Trust will not engage in any business
activity other than acquiring and holding the Trust Property, issuing the
Certificates and the Notes, if any, of such series and distributing payments
thereon.
Each Certificate will represent a fractional undivided interest in, and each
Note, if any, will represent an obligation of, the related Trust. The Trust
Property of each Trust will include, among other things, (i) a Contract Pool;
(ii) all monies paid or payable thereon on or after the Cutoff Date (as
specified in the related Prospectus Supplement); (iii) such amounts as from
time to time may be held in the Collection Account (including all investments
in the Collection Account and all income from the investment of funds therein
and all proceeds thereof) and certain other accounts (including the proceeds
thereof); (iv) an assignment of the security interests of Green Tree in the
Products securing the related Contracts; (v) an assignment of the right to
receive proceeds from the exercise of rights against Dealers under agreements
between Green Tree and such Dealers (the "Dealer Agreements") and the
assignment of rights in respect of each related Contract from the applicable
Dealer to Green Tree (the "Dealer Assignments"); (vi) an assignment of the
right to receive proceeds from claims on certain insurance policies covering
the related Products or Obligors; and (vii) certain other rights under the
related Trust Documents. See "The Contracts" and "Description of the Trust
Documents--Collections." The Trust Property will also include, if so specified
in the related Prospectus Supplement, monies on deposit in a Pre-Funding
Account to be established with the Indenture Trustee or the Trustee, which
will be used to purchase Subsequent Contracts from the Seller from time to
time (and as frequently as daily) during the Pre-Funding Period specified in
the related Prospectus Supplement. Any Subsequent Contracts so purchased will
be included in the related Contract Pool forming part of the Trust Property,
subject to the prior rights of the related Indenture Trustee and the
Noteholders therein. In addition, to the extent specified in the related
Prospectus Supplement, a form of credit enhancement may be issued to or held
by the Trustee or the Indenture Trustee for the benefit of holders of one or
more classes of Securities.
The Servicer will service the Contracts held by each Trust and will receive
fees for such services. See "Description of the Trust Documents--Servicing
Compensation." Unless otherwise specified in the related Prospectus
Supplement, Green Tree, on behalf of each Trust, will hold the original
installment sales contract or promissory note as well as copies of documents
and instruments relating to each Contract and evidencing the security interest
in the Product securing each Contract (the "Contract Files"). In order to
protect the Trust's ownership interest in the Contracts, Green Tree will file
a UCC-1 financing statement in Minnesota to give notice of such Trust's
ownership of the related Contracts and the related Trust Property.
THE TRUSTEE
The Trustee for each Trust will be specified in the related Prospectus
Supplement. The Trustee's liability in connection with the issuance and sale
of the Securities of such series will be limited solely to the express
obligations of such Trustee set forth in the related Trust Documents. A
Trustee may resign at any time, in which event the General Partner (if the
related Trust is structured as an owner trust) or the Servicer or its
successor (if the related Trust is structured as a grantor trust) will be
obligated to appoint a successor trustee. The General Partner (if the related
Trust is structured as an owner trust) or the Servicer (if the related Trust
is structured as a grantor trust) may also remove the Trustee if the Trustee
ceases to be eligible to continue as Trustee under the related Trust Documents
or if the Trustee becomes insolvent. In such circumstances, the General
Partner (if the related Trust is structured as an owner trust) or the Servicer
(if the related Trust is structured as a grantor trust) will be obligated to
appoint a successor trustee. Any resignation or removal of a Trustee and
appointment of a successor trustee will be subject to any conditions or
approvals specified in the related Prospectus Supplement and will not become
effective until acceptance of the appointment by the successor trustee.
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THE CONTRACTS
Each pool of Contracts with respect to a Trust (a "Contract Pool") will
consist of retail installment sales contracts or installment loan agreements
(collectively, the "Contracts") to finance the purchase of Products (described
below). The Contracts will be originated by Green Tree on an individual basis
in the ordinary course of business. Except as otherwise specified in the
related Prospectus Supplement, the Contracts will be fully amortizing and will
bear interest at a fixed or variable rate (the "Contract Rate").
The Products financed by the Contracts included in a Contract Pool are
expected to include all the types of consumer products Green Tree is then
financing for retail customers (subject to the availability of such contracts
and subject to any eligibility criteria specified in the Trust Documents).
Currently, Green Tree provides financing for the purchase of motorcycles;
marine products (including boats, boat trailers and outboard motors); pianos
and organs; horse trailers; sport vehicles (including snowmobiles, personal
watercraft and all-terrain vehicles); trucks; personal aircraft; and
recreational vehicles. Any Trust whose Securities are offered pursuant to this
Prospectus will include only Contracts secured by the foregoing types of
Products. The types of Products securing a Contract Pool and the relative
concentrations of each such type will be specified in the related Prospectus
Supplement. Because Green Tree has less extensive experience in underwriting
and servicing retail installment sales contracts for items such as the
Products, Green Tree has no basis upon which to distinguish the expected
delinquency, default or prepayment experience of Contracts secured by
different types of Products.
GREEN TREE FINANCIAL CORPORATION
GENERAL
Green Tree is a Delaware corporation that, as of September 30, 1995, had
stockholders' equity of approximately $914,860,000. Through its various
divisions, Green Tree purchases, pools, sells and services retail conditional
sales contracts for manufactured housing and retail installment sales
contracts for home improvements, a variety of consumer products and equipment
finance, and provides credit to manufactured housing dealers for purposes of
purchasing manufactured home inventory from manufacturers. Green Tree conducts
its business throughout the United States through 50 manufactured housing
offices, 80 home improvement locations and 3 regional wholesale lending
centers, as well as centralized operations in St. Paul, Minnesota and Rapid
City, South Dakota. Its principal executive offices are located at 1100
Landmark Towers, St. Paul, Minnesota 55102-1639 (telephone (612) 293-3400).
Green Tree's Annual Report on Form 10-K for the year ended December 31, 1994,
most recent Proxy Statement and, when available subsequent quarterly and
annual reports are available from Green Tree upon written request.
PURCHASE OF CONTRACTS
Green Tree arranges to purchase certain contracts originated by dealers of
Products located throughout the United States ("Dealers"). Green Tree's
personnel contact dealers and explain Green Tree's available financing plans,
terms, prevailing rates and credit and financing policies. If the dealer
wishes to utilize Green Tree's available customer financing, the dealer must
make an application for dealer approval.
All contracts that Green Tree purchases are written on forms provided or
approved by Green Tree and are purchased on an individually approved basis in
accordance with Green Tree's guidelines. The dealer submits the customer's
credit application and purchase order to Green Tree's office where an analysis
of the creditworthiness of the proposed buyer is made. The analysis includes a
review of the applicant's paying habits, length and likelihood of continued
employment and certain other procedures. Green Tree's underwriting guidelines
for consumer products focus primarily on the obligor's ability to repay the
loan rather than the collateral value of the product financed. The maximum
loan amount for an obligor will depend on a variety of factors, including the
type of product, whether the product is new or used, the obligor's debt-to-
income ratio, and the
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manufacturer's invoice price of the product (plus certain dealer-installed
accessories, sales taxes, title fees, registration fees, and certain other
items). For products other than airplanes and trucks, the maximum permissible
debt-to-income ratio (based on the monthly loan payments) is between 55% and
65%, the maximum loan-to-invoice ratio (for new products) ranges from 100% to
125%, and the maximum loan-to-sales-price ratio (for used products) is
typically 90% (subject to further limitation based on a standard assumed value
for such a used product). Green Tree's underwriting guidelines for truck loans
emphasize the trucking experience of the obligor and the projected operating
revenues of the truck, rather than the obligor's current income, because the
obligor's income as owner-operator of the truck is generally expected to be
the source of funds to make payments on the contract and because Green Tree
believes that the obligor's past trucking experience is the best predictor of
success as an owner-operator of the truck. A loan for the purchase of an
airplane is generally subject to limitations of a 45% debt-to-income ratio and
a maximum loan amount of $10,000,000, although most airplane loans are not
expected to exceed $200,000. Green Tree management may revise these guidelines
from time to time, and the underwriting guidelines may be exceeded in certain
cases with the approval of Green Tree management. Accordingly, some of the
Contracts included in a Trust may not conform in all respects to the criteria
described above. Green Tree will also finance premiums for the term of the
contract on optional credit life and accident and health insurance and up to
$ of premiums for extended warranty insurance, and may finance premiums for
required physical damage insurance on the product. If the application meets
Green Tree's guidelines and the credit is approved, Green Tree purchases the
contract when the customer accepts delivery of the Product.
Currently, Green Tree's consumer finance division finances the purchase of
motorcycles; marine products (including boats, boat trailers and outboard
motors); pianos and organs; horse trailers; sport vehicles (including
snowmobiles, personal watercraft and all-terrain vehicles); trucks; personal
aircraft; and recreational vehicles. The Products financed by Contracts
included in any Trust whose Securities are offered pursuant to this Prospectus
will include only the products listed above.
LOSS AND DELINQUENCY INFORMATION
Each Prospectus Supplement will include Green Tree's loss and delinquency
experience with respect to its entire servicing portfolio of consumer product
contracts. However, there can be no assurance that such experience will be
indicative of the performance of the Contracts included in a particular
Contract Pool.
YIELD AND PREPAYMENT CONSIDERATIONS
Unless otherwise specified in the related Prospectus Supplement, the
Contracts will be simple interest retail installment sales contracts and
promissory notes. Payments on simple interest obligations are applied first to
interest accrued through the payment date, and the remainder is applied to
reduce the unpaid principal balance. Accordingly, if an Obligor pays an
installment before its due date, the portion of the payment allocable to
interest for the period will be less than if the payment had been made on the
due date, the portion of the payment applied to reduce the principal balance
will be correspondingly greater, and the principal balance will be amortized
more rapidly than scheduled. Conversely, if an Obligor pays an installment
after its due date, the portion of the payment allocable to interest will be
greater than if the payment had been made on the due date, the portion of the
payment applied to reduce the principal balance will be correspondingly less,
and the principal balance will be amortized slower than scheduled, in which
case a larger portion of the principal balance may be due on the final
scheduled payment date. Any interest shortfalls resulting from early payment
or prepayment of a Contract will be funded by collections on other Contracts
or, to the extent collections are insufficient, by payments under the
applicable form of credit enhancement, if any, described in the related
Prospectus Supplement.
The Contracts will be prepayable, without premium or penalty, by Obligors at
any time. Prepayments (or, for this purpose, equivalent payments to a Trust)
also may result from liquidations due to default, receipt of proceeds from
insurance policies, repurchases by Green Tree due to breach of a
representation or warranty, or as a result of Green Tree or the Servicer
exercising its option to purchase the Contract Pool. See "Description of the
Trust Documents." The rate of prepayments on the Contracts may be influenced
by a variety of economic, social and other factors. No assurance can be given
that prepayments on the Contracts will conform to any estimated or actual
historical experience, and no prediction can be made as to the actual
prepayment rates which will be experienced on the Contracts.
Certificateholders and Noteholders will bear all reinvestment risk resulting
from the timing of payments of principal on the Certificates or the Notes, as
the case may be.
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POOL FACTOR
The "Certificate Pool Factor" for each class of Certificates will be an
eight-digit decimal which the Servicer will compute indicating the Certificate
Balance with respect to such Certificates as of each Distribution Date (after
giving effect to all distributions of principal made on such Distribution
Date), as a fraction of the Cutoff Date Certificate Principal Balance. The
"Note Pool Factor" for each class of Notes, if any, will be an eight-digit
decimal which the Servicer will compute indicating the remaining outstanding
principal balance with respect to such Notes as of each Distribution Date
(after giving effect to all distributions of principal on such Distribution
Date) as a fraction of the initial outstanding principal balance of such class
of Notes. Each Certificate Pool Factor and each Note Pool Factor will
initially be 1.00000000; thereafter, the Certificate Pool Factor and the Note
Pool Factor will decline to reflect reductions in the Certificate Balance of
the applicable class of Certificates or reductions in the outstanding
principal balance of the applicable class of Notes, as the case may be. The
amount of a Certificateholder's pro rata share of the Certificate Balance for
the related class of Certificates can be determined by multiplying the
original denomination of the Certificateholder's Certificate by the then
applicable Certificate Pool Factor. The amount of a Noteholder's pro rata
share of the aggregate outstanding principal balance of the applicable class
of Notes can be determined by multiplying the original denomination of such
Noteholder's Note by the then applicable Note Pool Factor.
With respect to each Trust and pursuant to the related Trust Documents, on
each Distribution Date or Payment Date, as the case may be, the related
Certificateholders and Noteholders will receive periodic reports from the
Trustee stating the Certificate Pool Factor or the Note Pool Factor, as the
case may be, and containing various other items of information. Unless and
until Definitive Certificates or Definitive Notes are issued, such reports
will be sent on behalf of the Trust to the Trustee and the Indenture Trustee
(if any) and Cede & Co., as registered holder of the Certificates and the
Notes and the nominee of DTC. Certificate Owners and Note Owners may receive
such reports, upon written request, together with a certification that they
are Certificate Owners or Note Owners and payment of any expenses associated
with the distribution of such reports, from the Trustee and the Indenture
Trustee (if any) at the addresses specified in the related Prospectus
Supplement. See "Certain Information Regarding the Securities--Statements to
Securityholders."
USE OF PROCEEDS
Unless otherwise specified in the related Prospectus Supplement, the net
proceeds to be received by the Trust from the sale of each series of
Securities will be used to pay to Green Tree the purchase price for the
Contracts and to make the deposit of the Pre-Funded Amount into the Pre-
Funding Account, if any, to repay warehouse lenders and/or to provide for
other forms of credit enhancement specified in the related Prospectus
Supplement. The net proceeds to be received by Green Tree will be used to pay
its warehouse loans, and any additional proceeds will be added to Green Tree's
general funds and used for its general corporate purposes.
THE CERTIFICATES
GENERAL
With respect to each Trust, one or more classes of Certificates of a given
series will be issued pursuant to Trust Documents to be entered into between
Green Tree, as Seller and as Servicer, and the Trustee, forms of which have
been filed as exhibits to the Registration Statement of which this Prospectus
forms a part. The following summary does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all of the
material provisions of the Trust Documents. Where particular provisions of or
terms used in the Trust Documents are referred to, the actual provisions
(including definitions of terms) are incorporated by reference as part of this
summary.
Unless otherwise specified in the related Prospectus Supplement, each class
of Certificates will initially be represented by a single Certificate
registered in the name of the nominee of DTC (together with any successor
depository selected by the Seller, the "Depository"). See "Certain Information
Regarding the Securities--Book-
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Entry Registration." Unless otherwise specified in the related Prospectus
Supplement, the Certificates evidencing interests in a Trust will be available
for purchase in denominations of $1,000 initial principal amount and integral
multiples thereof, except that one Certificate evidencing an interest in such
Trust may be issued in a denomination that is less than $1,000 initial
principal amount. Certificates may be transferred or exchanged without the
payment of any service charge other than any tax or governmental charge
payable in connection with such transfer or exchange. Unless otherwise
specified in the related Prospectus Supplement, the Owner Trustee will
initially be designated as the registrar for the Certificates.
DISTRIBUTIONS OF INTEREST AND PRINCIPAL
The timing and priority of distributions, seniority, allocations of loss,
Pass-Through Rate and amount of or method of determining distributions with
respect to principal and interest (or, where applicable, with respect to
principal only or interest only) on the Certificates of any series will be
described in the related Prospectus Supplement. Distributions of interest on
the Certificates will be made on the dates specified in the related Prospectus
Supplement (each, a "Distribution Date") and, unless otherwise specified in
the related Prospectus Supplement, will be made prior to distributions with
respect to principal. A series may include one or more classes of Strip
Certificates entitled to (i) distributions in respect of principal with
disproportionate, nominal or no interest distribution, or (ii) interest
distributions, with disproportionate, nominal or no distributions in respect
of principal. Each class of Certificates may have a different Pass-Through
Rate, which may be a fixed, variable or adjustable Pass-Through Rate (and
which may be zero for certain classes of Strip Certificates), or any
combination of the foregoing. The related Prospectus Supplement will specify
the Pass-Through Rate for each class of Certificate, or the initial Pass-
Through Rate and the method for determining the Pass-Through Rate. Unless
otherwise specified in the related Prospectus Supplement, interest on the
Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months. Unless otherwise specified in the related Prospectus
Supplement, distributions in respect of the Certificates will be subordinate
to payments in respect of the Notes, if any, as more fully described in the
related Prospectus Supplement. Distributions in respect of principal of any
class of Certificates will be made on a pro rata basis among all of the
Certificateholders of such class.
In the case of a series of Certificates which includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount
of distributions in respect of principal, and any schedule or formula or other
provisions applicable to the determination thereof, of each such class shall
be as set forth in the related Prospectus Supplement.
THE NOTES
GENERAL
A series of Securities may include one or more classes of Notes issued
pursuant to the terms of an Indenture, a form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Unless otherwise specified in the related Prospectus Supplement, no Notes will
be issued as a part of any series. The following summary does not purport to
be complete and is subject to, and is qualified in its entirety by reference
to, all of the provisions of the Notes and the Indenture, and the following
summary will be supplemented in whole or in part by the related Prospectus
Supplement. Where particular provisions of or terms used in the Indenture are
referred to, the actual provisions (including definition of terms) are
incorporated by reference as part of this summary.
Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by a single Note registered in the name
of the nominee of the Depository. See "Certain Information Regarding the
Securities--Book-Entry Registration." Unless otherwise specified in the
related Prospectus Supplement, Notes will be available for purchase in
denominations of $1,000 and integral multiples thereof. Notes may be
transferred or exchanged without the payment of any service charge other than
any tax or governmental charge payable in connection with such transfer or
exchange. Unless otherwise provided in the related Prospectus Supplement, the
Indenture Trustee will initially be designated as the registrar for the Notes.
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PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of loss, Interest
Rate and amount of or method of determining payments of principal and interest
on the Notes will be described in the related Prospectus Supplement. The right
of holders of any class of Notes to receive payments of principal and interest
may be senior or subordinate to the rights of holders of any class or classes
of Notes of such series, or any class of Certificates, as described in the
related Prospectus Supplement. Unless otherwise provided in the related
Prospectus Supplement, payments of interest on the Notes will be made prior to
payments of principal thereon. A series may include one or more classes of
Strip Notes entitled to (i) principal payments with disproportionate, nominal
or no interest payment, or (ii) interest payments with disproportionate,
nominal or no principal payments. Each class of Notes may have a different
Interest Rate, which may be a fixed, variable or adjustable Interest Rate (and
which may be zero for certain classes of Strip Notes), or any combination of
the foregoing. The related Prospectus Supplement will specify the Interest
Rate for each class of Notes, or the initial Interest Rate and the method for
determining the Interest Rate. One or more classes of Notes of a series may be
redeemable under the circumstances specified in the related Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, payments in
respect of interest to Noteholders of all classes within a series will have
the same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on the Notes on any
of the dates specified for payments in the related Prospectus Supplement
(each, a "Payment Date"), in which case each class of Noteholders will receive
their ratable share (based upon the aggregate amount of interest due to such
class of Noteholders) of the aggregate amount available to be distributed in
respect of interest on the Notes.
In the case of a series of Securities which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal
and interest, and any schedule or formula or other provisions applicable to
the determination thereof, of each such class will be set forth in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, payments in respect of principal and interest of any class of
Notes will be made on a pro rata basis among all of the Notes of such class.
THE INDENTURE
A form of Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Green Tree will provide a
copy of the applicable Indenture (without exhibits) upon request to a holder
of Notes issued thereunder.
Modification of Indenture Without Noteholder Consent. Each Trust and related
Indenture Trustee (on behalf of such Trust) may, without consent of the
related Noteholders, enter into one or more supplemental indentures for any of
the following purposes: (i) to correct or amplify the description of the
collateral or add additional collateral; (ii) to provide for the assumption of
the Note and the Indenture obligations by a permitted successor to the Trust;
(iii) to add additional covenants for the benefit of the related Noteholders;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with
the Indenture Trustee; (v) to cure any ambiguity or correct or supplement any
provision in the Indenture or in any supplemental indenture; (vi) to provide
for the acceptance of the appointment of a successor Indenture Trustee or to
add to or change any of the provisions of the Indenture or in any supplemental
indenture which may be inconsistent with any other provision of the Indenture
as shall be necessary and permitted to facilitate the administration by more
than one trustee; (vii) to modify, eliminate or add to the provisions of the
Indenture in order to comply with the Trust Indenture Act of 1939, as amended;
and (viii) to add any provisions to, change in any manner, or eliminate any of
the provisions of, the Indenture or modify in any manner the rights of
Noteholders under such Indenture; provided that any action specified in this
clause (viii) shall not, as evidenced by an opinion of counsel, adversely
affect in any material respect the interests of any related Noteholder unless
Noteholder consent is otherwise obtained as described below.
Modifications of Indenture With Noteholder Consent. With respect to each
Trust, with the consent of the holders representing a majority of the
principal balance of the outstanding related Notes (a "Note Majority"), the
Owner Trustee and the Indenture Trustee may execute a supplemental indenture
to add provisions to change in any manner or eliminate any provisions of, the
related Indenture, or modify in any manner the rights of the related
Noteholders.
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Without the consent of the holder of each outstanding related Note affected
thereby, however, no supplemental indenture may: (i) change the due date of
any installment of principal of or interest on any Note or reduce the
principal amount thereof, the interest rate specified thereon or the
redemption price with respect thereto or change the manner of calculating any
such payment or any place of payment where the coin or currency in which any
Note or any interest thereon is payable; (ii) impair the right to institute
suit for the enforcement of certain provisions of the Indenture regarding
payment; (iii) reduce the percentage of the aggregate amount of the
outstanding Notes the consent of the holders of which is required for any such
supplemental indenture or the consent of the holders of which is required for
any waiver of compliance with certain provisions of the Indenture or of
certain defaults thereunder and their consequences as provided for in the
Indenture; (iv) modify or alter the provisions of the Indenture regarding the
voting of Notes held by the related Trust, any other obligor on the Notes, the
Seller or an affiliate of any of them; (v) reduce the percentage of the
aggregate outstanding amount of the Notes the consent of the holders of which
is required to direct the Indenture Trustee to sell or liquidate the Contracts
if the proceeds of such sale would be insufficient to pay the principal amount
and accrued but unpaid interest on the outstanding Notes; (vi) decrease the
percentage of the aggregate principal amount of the Notes required to amend
the sections of the Indenture which specify the applicable percentage of
aggregate principal amount of the Notes necessary to amend the Indenture or
certain other related agreements; or (vii) permit the creation of any lien
ranking prior to or on a parity with the lien of the Indenture with respect to
any of the collateral for the Notes or, except as otherwise permitted or
contemplated in the Indenture, terminate the lien of the Indenture on any such
collateral or deprive the holder of any Note of the security afforded by the
lien of the Indenture.
Events of Default; Rights Upon Event of Default. With respect to each Trust,
unless otherwise specified in the related Prospectus Supplement, "Events of
Default" under the Indenture will consist of: (i) a default for five days or
more in the payment of any interest on any Note; (ii) a default in the payment
of the principal of or any installment of the principal of any Note when the
same becomes due and payable; (iii) a default in the observance or performance
in any material respect of any covenant or agreement of the Trust made in the
Indenture, or any representation or warranty made by the Trust in the
Indenture or in any certificate delivered pursuant thereto or in connection
therewith having been incorrect as of the time made, and the continuation of
any such default or the failure to cure such breach of a representation or
warranty for a period of 30 days after notice thereof is given to the Trust by
the Indenture Trustee or to the Trust and the Indenture Trustee by the holders
of at least 25% in principal amount of the Notes then outstanding; or (iv)
certain events of bankruptcy, insolvency, receivership or liquidation of the
Trust. However, the amount of principal due and payable on any class of Notes
on any Payment Date (prior to the Final Scheduled Payment Date, if any, for
such class) will generally be determined by amounts available to be deposited
in the Note Distribution Account for such Payment Date. Therefore, unless
otherwise specified in the related Prospectus Supplement, the failure to pay
principal on a class of Notes generally will not result in the occurrence of
an Event of Default unless such class of Notes has a Final Scheduled Payment
Date, and then not until such Final Scheduled Payment Date for such class of
Notes.
Unless otherwise specified in the related Prospectus Supplement, if an Event
of Default should occur and be continuing with respect to the Notes of any
series, the related Indenture Trustee or a Note Majority may declare the
principal of the Notes to be immediately due and payable. Such declaration
may, under certain circumstances, be rescinded by a Note Majority.
Unless otherwise specified in the related Prospectus Supplement, if the
Notes of any series have been declared due and payable following an Event of
Default with respect thereto, the related Indenture Trustee may institute
proceedings to collect amounts due or foreclose on Trust Property, exercise
remedies as a secured party, sell the related Contracts or elect to have the
Trust maintain possession of such Contracts and continue to apply collections
on such Contracts as if there had been no declaration of acceleration. Unless
otherwise specified in the related Prospectus Supplement, the Indenture
Trustee, however, will be prohibited from selling the related Contracts
following an Event of Default, unless (i) the holders of all the outstanding
related Notes consent to such sale; (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on such
outstanding Notes at the date of such sale; or (iii) the Indenture Trustee
determines that the proceeds of the
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Contracts would not be sufficient on an ongoing basis to make all payments on
the Notes as such payments would have become due if such obligations had not
been declared due and payable, and the Indenture Trustee obtains the consent
of the holders of 66 2/3% of the aggregate outstanding amount of the Notes.
Unless otherwise specified in the related Prospectus Supplement, following a
declaration upon an Event of Default that the Notes are immediately due and
payable, (i) Note Owners will be entitled to ratable repayment of principal on
the basis of their respective unpaid principal balances and (ii) repayment in
full of the accrued interest on and unpaid principal balances of the Notes
will be made prior to any further payment of interest or principal on the
Certificates.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee, if an Event of Default occurs and is continuing with
respect to a series of Notes, the Indenture Trustee will be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the holders of such Notes, if the Indenture
Trustee reasonably believes it will not be adequately indemnified against the
costs, expenses and liabilities which might be incurred by it in complying
with such request. Subject to the provisions for indemnification and certain
limitations contained in the Indenture, a Note Majority in a series will have
the right to direct the time, method and place of conducting any proceeding or
any remedy available to the Indenture Trustee, and a Note Majority may, in
certain cases, waive any default with respect thereto, except a default in the
payment of principal or interest or a default in respect of a covenant or
provision of the Indenture that cannot be modified without the waiver or
consent of all of the holders of such outstanding Notes.
No holder of a Note of any series will have the right to institute any
proceeding with respect to the related Indenture, unless (i) such holder
previously has given to the Indenture Trustee written notice of a continuing
Event of Default, (ii) the holders of not less than 25% in principal amount of
the outstanding Notes of such series have made written request of the
Indenture Trustee to institute such proceeding in its own name as Indenture
Trustee, (iii) such holder or holders have offered the Indenture Trustee
reasonable indemnity, (iv) the Indenture Trustee has for 60 days failed to
institute such proceeding, and (v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day period by
the holders of a majority in principal amount of such outstanding Notes.
If an Event of Default occurs and is continuing and if it is known to the
Indenture Trustee, the Indenture Trustee will mail to each Noteholder notice
of the Event of Default within 90 days after it occurs. Except in the case of
a failure to pay principal of or interest on any Note, the Indenture Trustee
may withhold the notice if and so long as it determines in good faith that
withholding the notice is in the interests of the Noteholders.
In addition, each Indenture Trustee and the related Noteholders, by
accepting the related Notes, will covenant that they will not at any time
institute against the Seller or the related Trust any bankruptcy,
reorganization or other proceeding under any federal or state bankruptcy or
similar law.
Neither the Indenture Trustee nor the Trustee in its individual capacity,
nor any holder of a Certificate including, without limitation, the Seller, nor
any of their respective owners, beneficiaries, agents, officers, directors,
employees, affiliates, successors or assigns will, in the absence of an
express agreement to the contrary, be personally liable for the payment of the
related Notes or for any agreement or covenant of the related Trust contained
in the Indenture.
Certain Covenants. Each Indenture will provide that the related Trust may
not consolidate with or merge into any other entity, unless (i) the entity
formed by or surviving such consolidation or merger is organized under the
laws of the United States or any state, (ii) such entity expressly assumes the
Trust's obligation to make due and punctual payments upon the Notes and the
performance or observance of every agreement and covenant of the Trust under
the Indenture, (iii) no Event of Default shall have occurred and be continuing
immediately after such merger or consolidation, (iv) the Trustee has been
advised that the then current rating of the related Notes or Certificates then
in effect would not be reduced or withdrawn by the Rating Agencies as a result
of such merger or consolidation, (v) the Trustee has received an opinion of
counsel to the effect that such consolidation or merger would have no material
adverse tax consequence to the Trust or to any related Note Owner or
Certificate Owner.
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Each Trust will not, among other things, (i) except as expressly permitted
by the Indenture, the Trust Documents or certain related documents for such
Trust (collectively, the "Related Documents"), sell, transfer, exchange or
otherwise dispose of any of the assets of the Trust, (ii) claim any credit on
or make any deduction from the principal and interest payable in respect of
the related Notes (other than amounts withheld under the Code or applicable
state law) or assert any claim against any present or former holder of such
Notes because of the payment of taxes levied or assessed upon the Trust, (iii)
dissolve or liquidate in whole or in part, (iv) permit the validity or
effectiveness of the related Indenture to be impaired or permit any person to
be released from any covenants or obligations with respect to the related
Notes under such Indenture except as may be expressly permitted thereby, or
(v) except as expressly permitted by the Related Documents, permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance to be
created on or extend to or otherwise arise upon or burden the assets of the
Trust or any part thereof, or any interest therein or proceeds thereof.
No Trust may engage in any activity other than as specified under the
section of the related Prospectus Supplement entitled "The Trust." No Trust
will incur, assume or guarantee any indebtedness other than indebtedness
incurred pursuant to the related Notes and the related Indenture or otherwise
in accordance with the Related Documents.
Annual Compliance Statement. Each Trust will be required to file annually
with the related Indenture Trustee a written statement as to the fulfillment
of its obligations under the Indenture.
Indenture Trustee's Annual Report. The Indenture Trustee will be required to
mail each year to all related Noteholders a brief report relating to its
eligibility and qualification to continue as Indenture Trustee under the
related Indenture, any amounts advanced by it under the Indenture, the amount,
interest rate and maturity date of certain indebtedness owing by the Trust to
the Indenture Trustee in its individual capacity, the property and funds
physically held by the Indenture Trustee as such and any action taken by it
that materially affects the Notes and that has not been previously reported.
Note Owners may receive such reports upon written request, together with a
certification that they are Note Owners and payment of reproduction and
postage expenses associated with the distribution of such reports, from the
Indenture Trustee at the address specified in the related Prospectus
Supplement.
Satisfaction and Discharge of Indenture. The Indenture will be discharged
with respect to the collateral securing the related Notes upon the delivery to
the related Indenture Trustee for cancellation of all such Notes or, with
certain limitations, upon deposit with the Indenture Trustee of funds
sufficient for the payment in full of all of such Notes.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the related
Prospectus Supplement. The Indenture Trustee may resign at any time, in which
event the Seller will be obligated to appoint a successor trustee. Green Tree
may also remove the Indenture Trustee if the Indenture Trustee ceases to be
eligible to continue as such under the Indenture or if the Indenture Trustee
becomes insolvent. In such circumstances, Green Tree will be obligated to
appoint a successor trustee. Any resignation or removal of the Indenture
Trustee and appointment of a successor trustee will be subject to any
conditions or approvals, if any, specified in the related Prospectus
Supplement and will not become effective until acceptance of the appointment
by a successor trustee.
CERTAIN INFORMATION REGARDING THE SECURITIES
BOOK-ENTRY REGISTRATION
Unless otherwise provided in the related Prospectus Supplement, the
Securities of each series will 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
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to the provisions of Section 17A of the Exchange 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 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 and Note Owners who are not Participants but desire to
purchase, sell or otherwise transfer ownership of Securities may do so only
through Participants (unless and until Definitive Certificates or Definitive
Notes, each as defined below, are issued). In addition, Certificate Owners and
Note Owners will receive all distributions of principal of, and interest on,
the Securities from the Trustee or the Indenture Trustee, as applicable,
through DTC and Participants. Certificate Owners and Note Owners will not
receive or be entitled to receive certificates representing their respective
interests in the Securities, except under the limited circumstances described
below and such other circumstances, if any, as may be specified in the related
Prospectus Supplement.
Unless and until Definitive Securities are issued, it is anticipated that
the only Certificateholder of the Certificates and the only Noteholder of the
Notes, if any, will be Cede & Co., as nominee of DTC. Certificate Owners and
Note Owners will not be recognized by the Trustee as Certificateholders or by
the Indenture Trustee as Noteholders as those terms are used in the related
Trust Documents or Indenture. Certificate Owners and Note Owners will be
permitted to exercise the rights of Certificateholders or Noteholders, as the
case may be, only indirectly through Participants and DTC.
With respect to any series of Securities, while the Securities 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 Securities and is required to receive
and transmit distributions of principal of, and interest on, the Securities.
Participants with whom Certificate Owners or Note Owners have accounts with
respect to Securities are similarly required to make book-entry transfers and
receive and transmit such distributions on behalf of their respective
Certificate Owners and Note Owners. Accordingly, although Certificate Owners
and Note Owners will not possess Securities, the Rules provide a mechanism by
which Certificate Owners and Note Owners will receive distributions and will
be able to transfer their interests.
With respect to any series of Securities, unless otherwise specified in the
related Prospectus Supplement, Certificates and Notes (if any) will be issued
in registered form to Certificate Owners and Note Owners, or their nominees,
rather than to DTC (such Certificates and Notes being referred to herein as
"Definitive Certificates" and "Definitive Notes," respectively), only if (i)
DTC, the Seller or the Servicer advises the Trustee or the Indenture Trustee,
as the case may be, in writing that DTC is no longer willing or able to
discharge properly its responsibilities as nominee and depository with respect
to the Certificates or the Notes, and the Seller, the Servicer, the Trustee or
the Indenture Trustee, as the case may be, is unable to locate a qualified
successor, (ii) the Seller or the Administrator (if any) at its sole option
has advised the Trustee or the Indenture Trustee, as the case may be, in
writing that it elects to terminate the book-entry system through DTC and
(iii) after the occurrence of a Servicer Termination Event, the holders
representing a majority of the Certificate Balance (a "Certificate Majority")
or a Note Majority advises the Trustee or the Indenture Trustee, as the case
may be, through DTC, that continuation of a book-entry system is no longer in
their best interests. Upon issuance of Definitive Certificates or Definitive
Notes to Certificate Owners or Note Owners, such Certificates or Notes will be
transferable directly (and not exclusively on a book-entry basis) and
registered holders will deal directly with the Trustee or the Indenture
Trustee, as the case may be, with respect to transfers, notices and
distributions.
DTC has advised the Seller that, unless and until Definitive Certificates or
Definitive Notes are issued, DTC will take any action permitted to be taken by
a Certificateholder or a Noteholder under the related Trust
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Documents or Indenture only at the direction of one or more Participants to
whose DTC accounts the Certificates or Notes are credited. DTC has advised the
Seller that DTC will take such action with respect to any fractional interest
of the Certificates or the Notes only at the direction of and on behalf of
such Participants beneficially owning a corresponding fractional interest of
the Certificates or the Notes. DTC may take actions, at the direction of the
related Participants, with respect to some Certificates or Notes which
conflict with actions taken with respect to other Certificates or Notes.
Issuance of Certificates and Notes in book-entry form rather than as
physical certificates or notes may adversely affect the liquidity of
Certificates or Notes in the secondary market and the ability of the
Certificate Owners or Note Owners to pledge them. In addition, since
distributions on the Certificates and the Notes will be made by the Trustee or
the Indenture 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
or Note Owners, Certificate Owners and Note Owners may experience delays in
the receipt of such distributions.
STATEMENTS TO SECURITYHOLDERS
On or prior to each Distribution Date, the Servicer will prepare and provide
to the Trustee a statement to be delivered to the related Certificateholders
on such Distribution Date. On or prior to each Distribution Date, the Servicer
will prepare and provide to the Indenture Trustee a statement to be delivered
to the related Noteholders on such Distribution Date. Such statements will be
based on the information in the related Servicer's Certificate setting forth
certain information required under the Trust Documents (the "Servicer's
Certificate"). Unless otherwise specified in the related Prospectus
Supplement, each such statement to be delivered to Certificateholders will
include the following information as to the Certificates with respect to such
Distribution Date or the period since the previous Distribution Date, as
applicable, and each such statement to be delivered to Noteholders will
include the following information as to the Notes with respect to such
Distribution Date or the period since the previous Distribution Date, as
applicable:
(i) the amount of the distribution allocable to interest on or with
respect to each class of Securities;
(ii) the amount of the distribution allocable to principal on or with
respect to each class of Securities;
(iii) the Certificate Balance and the Certificate Pool Factor for each
class of Certificates and the aggregate outstanding principal balance and
the Note Pool Factor for each class of Notes, after giving effect to all
payments reported under (ii) above on such date;
(iv) the amount of the Servicing Fee paid to the Servicer with respect to
the related Monthly Period or Periods, as the case may be;
(v) the Pass-Through Rate or Interest Rate for the next period for any
class of Certificates or Notes with variable or adjustable rates;
(vi) the amount, if any, distributed to Certificateholders and
Noteholders applicable to payments under the related form of credit
enhancement, if any; and
(vii) such other information as may be specified in the related
Prospectus Supplement.
Each amount set forth pursuant to subclauses (i), (ii), (iv) and (vi) with
respect to Certificates or Notes will be expressed as a dollar amount per
$1,000 of the initial Certificate Balance or the initial principal balance of
the Notes, as applicable.
Unless and until Definitive Certificates or Definitive Notes are issued,
such reports with respect to a series of Securities will be sent on behalf of
the related Trust to the Trustee, the Indenture Trustee and Cede & Co., as
registered holder of the Certificates and the Notes and the nominee of DTC.
Certificate Owners and Note Owners may receive copies of such reports upon
written request, together with a certification that they are Certificate
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Owners or Note Owners, as the case may be, and payment of reproduction and
postage expenses associated with the distribution of such reports, from the
Trustee or the Indenture Trustee, as applicable. See "Reports to
Securityholders" and "--Book-Entry Registration" above.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of a Trust, the Trustee and the
Indenture Trustee, as applicable, will mail to each holder of a class of
Securities who at any time during such calendar year has been a
Securityholder, and received any payment thereon, a statement containing
certain information for the purposes of such Securityholder's preparation of
federal income tax returns. DTC will convey such information to its
Participants, who in turn will convey such information to their related
indirect participants in accordance with arrangements among DTC and such
participants. Certificate Owners and Note Owners may receive such reports upon
written request, together with a certification that they are Certificate
Owners or Note Owners and payment of reproduction and postage expenses
associated with the distribution of such information, from the Trustee, with
respect to Certificate Owners, or from the Indenture Trustee, with respect to
Note Owners, at the addresses specified in the related Prospectus Supplement.
See "Certain Federal Income Tax Consequences."
LISTS OF SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, with respect
to each series of Certificates, at such time, if any, as Definitive
Certificates have been issued, the Trustee will, upon written request by three
or more Certificateholders or one or more holders of Certificates evidencing
not less than 25% of the Certificate Balance, 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 related
Trust Documents 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 Documents. Unless otherwise specified in the related Prospectus
Supplement, the Trust Documents will not provide for holding any annual or
other meetings of Certificateholders.
Unless otherwise provided in the related Prospectus Supplement, with respect
to each series of Notes, if any, at such time, if any, as Definitive Notes
have been issued, the Indenture Trustee will, upon written request by three or
more Noteholders or one or more holders of Notes evidencing not less than 25%
of the aggregate principal balance of the related Notes, within five Business
Days after provision to the Indenture Trustee of a statement of the
applicants' desire to communicate with other Noteholders about their rights
under the related Indenture or the Notes and a copy of the communication that
the applicants propose to transmit, afford such Noteholders access during
business hours to the current list of Noteholders for purposes of
communicating with other Noteholders with respect to their rights under the
Indenture. Unless otherwise specified in the related Prospectus Supplement,
the Indenture will not provide for holding any annual or other meetings of
Noteholders.
DESCRIPTION OF THE TRUST DOCUMENTS
Except as otherwise specified in the related Prospectus Supplement, the
following summary describes certain terms of either (i) the Pooling and
Servicing Agreements or (ii) the Sale and Servicing Agreements and the Trust
Agreements (in either case collectively referred to as the "Trust Documents")
pursuant to which Green Tree will sell and assign such Contracts to a Trust
and the Servicer will agree to service such Contracts on behalf of the Trust,
and pursuant to which such Trust will be created and Certificates will be
issued. Forms of the Trust Documents have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. Green Tree will
provide a copy of such agreements (without exhibits) upon request to a holder
of Securities described therein. This summary does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of the Trust Documents. Where particular provisions or terms used
in the Trust Documents are referred to, the actual provisions (including
definitions of terms) are incorporated by reference as part of such summary.
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SALE AND ASSIGNMENT OF THE CONTRACTS
On the Closing Date, Green Tree will sell and assign to the Trustee, without
recourse, Green Tree's entire interest in the related Contracts and the
proceeds thereof, including its security interests in the related Products.
Each Contract transferred by Green Tree to the Trust will be identified in a
schedule appearing as an exhibit to the related Trust Documents (the "Schedule
of Contracts"). Concurrently with such sale and assignment, the Trustee will
execute and deliver the related certificates representing the Certificates to
or upon the order of the Seller, and the Trustee will execute and the
Indenture Trustee will authenticate and deliver the Notes, if any, to or upon
the order of the Seller.
Unless otherwise specified in the related Prospectus Supplement, Green Tree
will warrant in the Trust Documents to the Trustee, among other things, that
(except as otherwise specified in the related Prospectus Supplement): (i) each
Contract (A) has created or will create a valid, binding and enforceable first
priority security interest in favor of Green Tree in the Product (and, within
180 days after the Closing Date, the title document (if any) to the Products
will show Green Tree as first lienholder), which security interest has been
validly assigned by Green Tree to the Owner Trustee, (B) was originated by a
Dealer for the retail sale of a Product in the ordinary course of such
Dealer's business, was fully and properly executed by the parties thereto, was
purchased by Green Tree from such Dealer under an existing Dealer Agreement
with Green Tree and was validly assigned by such Dealer to Green Tree, (C)
contains customary and enforceable provisions adequate to enable realization
against the collateral security and (D) is a fully amortizing contract that
provides for level monthly payments (other than with respect to the first and
the final payments) which, if made when due, will fully amortize the amount
financed over the original term; (ii) no selection procedures adverse to the
Securityholders were utilized in selecting the Contracts from those secured
consumer contracts owned by Green Tree which meet the selection criteria
contained in the Trust Documents; (iii) all requirements of applicable
Federal, state and local laws, and regulations thereunder, in respect of all
of the Contracts and each and every sale of the Products have been complied
with in all material respects; (iv) each Contract represents the genuine,
legal, valid and binding payment obligation of the Obligor thereon,
enforceable in accordance with its terms, except as may be limited by laws
affecting creditors' rights generally or as may be modified by the application
of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the
"Relief Act"); (v) (A) immediately before the conveyance of each Contract to
the Trust, such Contract will be secured by an enforceable and validly
perfected first priority security interest in the Product in favor of Green
Tree as secured party, (B) immediately after the conveyance of each Contract
to the Trust, such Contract will be secured by an enforceable and validly
perfected first priority security interest in the Product in favor of the
Trust as secured party or, in each case, all necessary and appropriate action
has been commenced and will be completed within 180 days that would result in
such a security interest and (C) as of the Cutoff Date there were no security
interests, liens, charges, pledges, preferences, equities or encumbrances of
any kind, claims or rights of others or claims for taxes, work, labor or
materials affecting a Product (each, a "Lien") which are or may be Liens prior
or equal to the Lien of the related Contract; (vi) there has been no default,
breach, violation or event permitting acceleration under the terms of any
Contract (other than payment delinquencies of not more than 59 days), and
there has been no waiver of any of the foregoing; and as of the Cutoff Date,
no Product had been repossessed; (vii) immediately prior to the conveyance of
the Contracts to the related Trust, Green Tree had good and indefeasible title
thereto and was the sole owner thereof, free of any Lien; and upon conveyance
of the Contracts by Green Tree to the Trust pursuant to the Trust Documents,
the Trust will have good and indefeasible title to and will be the sole owner
of the Contracts, free of any Lien; (viii) no Dealer has a participation in or
other right to receive proceeds of any Contract, and Green Tree has not taken
any action to convey any right to any person that would result in such person
having a right to payments received with respect to any Contract; (ix) Green
Tree has not done anything to convey any right to any person that would impair
the rights of the Trust, the Certificateholders or the Noteholders in any
Contract or the proceeds thereof; (x) each Contract was originated by a Dealer
and was sold by the Dealer to Green Tree without any fraud or
misrepresentation on the part of such Dealer; (xi) no Obligor is the United
States of America or any State or any agency, department, subdivision or
instrumentality thereof; (xii) no Contract is assumable by another person in a
manner that would release the Obligor thereof from such Obligor's obligations
to Green Tree with respect to such Contract; (xiii) no Contract was originated
in, or is subject to the laws of, any jurisdiction the laws of which would
make unlawful, void or voidable the sale, transfer
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and assignment of such Contract under the Trust Documents or pursuant to
transfers of the Securities; (xiv) all filings and other actions required to
be made, taken or performed by any person in any jurisdiction to give the
Trust a first priority perfected lien or ownership interest in the Contracts
will have been made, taken or performed; (xv) there exists a Contract File
pertaining to each Contract, and such Contract File contains (A) the fully
executed original of the Contract, (B) a certificate of insurance or
application form for insurance signed by the Obligor, or copies thereof (for
Contracts with an initial principal amount greater than $7,500), (C) the
original title certificate, showing Green Tree as the lien holder, or
application therefor, or a filed UCC-1 financing statement, as applicable, and
(D) a credit application signed by the Obligor, or a copy thereof; each of
such documents required to be signed by the Obligor has been signed by the
Obligor in the appropriate spaces, all blanks have been properly filled in and
each form has otherwise been correctly prepared; and the complete Contract
File for each Contract is in the possession of a custodian; (xvi) there is
only one original executed copy of each Contract (other than the copy in the
possession of the Obligor); (xvii) the Contracts constitute chattel paper
within the meaning of the UCC as in effect in the State of Minnesota; (xviii)
each Contract was entered into by an Obligor who at the Cutoff Date had not
been identified on the records of Green Tree as being the subject of a current
bankruptcy proceeding; (xix) the computer tape containing information with
respect to the Contracts that was made available by the Seller to the Owner
Trustee on the Closing Date and was used to select the Contracts (the
"Computer Tape") was complete and accurate as of the Cutoff Date and includes
a description of the same Contracts that are described in the Schedule of
Contracts; (xx) by the Closing Date, the portions of the electronic master
record of retail installment sale contracts and promissory notes of Green Tree
(the "Electronic Ledger") relating to the Contracts will have been clearly and
unambiguously marked to show that the Contracts constitute part of the Trust
Property and are owned by the Trust in accordance with the terms of the Trust
Documents; (xxi) the information set forth in the Schedule of Contracts was
produced from the Electronic Ledger and was true and correct in all material
respects as of the close of business on the Cutoff Date; (xxii) no Contract
has been satisfied, subordinated or rescinded; the Product securing each
Contract has not been released from the lien of the related Contract in whole
or in part; and no provision of a Contract has been waived, altered or
modified in any respect, except by instruments or documents contained in the
Contract File; (xxiii) no Contract is subject to any right of rescission, set-
off, counterclaim or defense; (xxiv) no Contract was more than 59 days past
due as of the Cutoff Date and (xxv) each Contract had a remaining principal
balance as of the Cutoff Date equal to or greater than $1,000.
The warranties of Green Tree will be made as of the execution and delivery
of the related Trust Documents and will survive the sale, transfer and
assignment of the related Contracts and other Trust Property to the Trust but
will speak only as of the date made.
In the event of a breach by Green Tree of any representation or warranty
made by the Trust Documents with respect to a Contract that materially and
adversely affects the interests of the Securityholders or the Trust in that
Contract (any such breach by Green Tree being a "Repurchase Event"), Green
Tree, unless it cures the breach by the second Accounting Date after the date
on which Green Tree becomes aware of or receives written notice from the
Trustee, the Indenture Trustee, or the Servicer of such breach, will be
obligated to repurchase the Contract from the Trust. Any such repurchase shall
be made on the Deposit Date immediately following such second Accounting Date
at a price equal to the Purchase Amount as of such second Accounting Date. The
"Purchase Amount" of any Contract means, with respect to any Accounting Date,
the outstanding principal balance of such Contract as of such Accounting Date,
plus accrued and unpaid interest thereon. The "Deposit Date" with respect to
any Distribution Date is the Business Day immediately preceding the
Determination Date for such Distribution Date. An "Accounting Date" is the
last day (whether or not a Business Day) of any calendar month. This
repurchase obligation may be enforced by the Trustee or the Indenture Trustee
on behalf of the Certificateholders and the Noteholders, respectively, and
will constitute the sole remedy available to the Certificateholders and the
Noteholders, unless otherwise specified in the related Prospectus Supplement,
the Trustee or the Indenture Trustee against Green Tree for any such uncured
breach, except that pursuant to the Trust Documents, Green Tree will indemnify
the Trustee, the Indenture Trustee, the Trust, and the Certificateholders and
Noteholders against losses, damages, liabilities and claims which may be
asserted against any of them as a result of third-party claims arising out of
the facts giving rise to such breach.
Upon the purchase by Green Tree of a Contract due to a breach of a
representation or warranty, the Trustee will convey such Contract and the
related Trust Property to Green Tree.
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CUSTODY OF CONTRACT FILES
Unless otherwise specified in the related Prospectus Supplement, Green Tree
initially will be appointed to act as custodian for the Contract Files of each
Trust. Prior to any such appointment, the Trust and Green Tree or such other
institution specified in the related Prospectus Supplement, as the case may
be, shall enter into a custodian agreement pursuant to which Green Tree or
such other institution will agree to hold the Contract Files on behalf of the
related Trust. Any such custodian agreement may be terminated by the Trust on
30 days' notice to Green Tree or such other institution. If Green Tree resigns
or is terminated as the Servicer, any custodian agreement with Green Tree
shall terminate at the same time.
To facilitate servicing and save administrative costs, the documents will
not be physically segregated from other similar documents that are in Green
Tree's possession. UCC financing statements will be filed in Minnesota
reflecting the sale and assignment of the Contracts to the Trustee, and Green
Tree's accounting records and computer systems will also reflect such sale and
assignment. In addition, the Contracts will be stamped or otherwise marked to
indicate that such Contracts have been sold to the related Trust. Despite
these precautions, if, through inadvertence or otherwise, any of the Contracts
were sold to another party (or a security interest therein were granted to
another party) that purchased (or took such security interest in) any of such
Contracts in the ordinary course of its business and took possession of such
Contracts, the purchaser (or secured party) would acquire an interest in the
Contracts superior to the interest of the related Trust if the purchaser (or
secured party) acquired (or took a security interest in) the Contracts for new
value and without actual knowledge of such Trust's interest. See "Certain
Legal Aspects of the Contracts--Rights in the Contracts."
COLLECTIONS
With respect to each Trust, the Servicer will establish one or more
Collection Accounts in the name of the Trustee or, in the case of any series
including one or more classes of Notes, in the name of the Indenture Trustee
for the benefit of the related Securityholders. If so specified in the related
Prospectus Supplement, the Trustee will establish and maintain for each series
an account, in the name of the Trustee on behalf of the related
Certificateholders, in which amounts released from the Collection Account and
any Pre-Funding Account and any amounts received from any source of credit
enhancement for distribution to such Certificateholders will be deposited and
from which all distributions to such Certificateholders will be made (the
"Certificate Distribution Account"). With respect to any series including one
or more classes of Notes, the Indenture Trustee will establish and maintain
for each series an account, in the name of the Indenture Trustee on behalf of
the related Noteholders, in which amounts released from the Collection Account
and any Pre-Funding Account and any amounts received from any source of credit
enhancement for payment to such Noteholders will be deposited and from which
all distributions to such Noteholders will be made (the "Note Distribution
Account"). The Collection Account, the Certificate Distribution Account (if
any), and the Note Distribution Account (if any), are referred to herein
collectively as the "Designated Accounts." Any other accounts to be
established with respect to a Trust will be described in the related
Prospectus Supplement.
Each Designated Account will be an Eligible Account maintained with the
Trustee, the Indenture Trustee and/or other depository institutions. "Eligible
Account" means any account which is (i) an account maintained with an Eligible
Institution (as defined below); (ii) an account or accounts the deposits in
which are fully insured by either the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC; (iii) a "segregated trust account"
maintained with the corporate trust department of a federal or state chartered
depository institution or trust company with trust powers and acting in its
fiduciary capacity for the benefit of the Trustee, which depository
institution or trust company has capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the capital and surplus of the bank holding company) of not less than
$50,000,000 and the securities of such depository institution (or, if such
depository institution is a subsidiary of a bank holding company system and
such depository institution's securities are not rated, the securities of the
bank holding company) has a credit rating from each of and in one
of its generic credit rating categories which signifies investment grade; or
(iv) an account that will not cause or to
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downgrade or withdraw its then-current rating assigned to the Certificates, as
confirmed in writing by Moody's and S&P . "Eligible
Institution" means any depository institution organized under the laws of the
United States or any state, the deposits of which are insured to the full
extent permitted by law by the Bank Insurance Fund (currently administered by
the Federal Deposit Insurance Corporation), whose short-term deposits have
been rated by Moody's and , or in one of the two highest rating
categories by and in the case of unsecured long-term debt, and
which is subject to supervision and examination by federal or state
authorities. On the Closing Date specified in the related Prospectus
Supplement, the Servicer will cause to be deposited in the Collection Account
all payments on the Contracts received by the Servicer after the Cutoff Date
and on or prior to the second Business Day preceding the Closing Date.
The Servicer will deposit all payments on the Contracts held by any Trust
received directly by the Servicer from Obligors and all proceeds of Contracts
collected directly by the Servicer during each Monthly Period into the
Collection Account no later than two Business Days after receipt.
Notwithstanding the foregoing and unless otherwise provided in the related
Prospectus Supplement, the Servicer may utilize an alternative remittance
schedule, if the Servicer provides to the Trustee and the Indenture Trustee
written confirmation from each Rating Agency that such alternative remittance
schedule will not result in the downgrading or withdrawal by such Rating
Agency of the rating(s) then assigned to the Securities. Green Tree and the
Servicer will also deposit into the Collection Account on or before the
Deposit Date the Purchase Amount of each Warranty Contract or Administrative
Contract to be purchased by it as of the related Accounting Date.
For any series of Securities, funds in the Designated Accounts and any other
accounts identified in the related Prospectus Supplement will be invested, as
provided in the related Trust Documents, at the direction of the Servicer in
United States government securities and certain other high-quality investments
meeting the criteria specified in the related Trust Documents ("Eligible
Investments"). Eligible Investments shall mature no later than the Business
Day preceding the applicable Distribution Date for the Monthly Period to which
such amounts relate. Investments in Eligible Investments will be made in the
name of the Trustee or the Indenture Trustee, as the case may be, and such
investments will not be sold or disposed of prior to their maturity.
Unless otherwise specified in the related Prospectus Supplement, collections
or recoveries on a Contract (other than late fees or certain other similar
fees or charges) received during a Monthly Period and Purchase Amounts
deposited with the Trustee prior to a Distribution Date will be applied first
to any outstanding Monthly Advances made by the Servicer with respect to such
Contract, and then to interest and principal on the Contract in accordance
with the terms of the Contract.
SERVICING PROCEDURES
The Servicer will make reasonable efforts, consistent with the customary
servicing procedures employed by the Servicer with respect to Contracts owned
or serviced by it, to collect all payments due with respect to the Contracts
held by any Trust and, in a manner consistent with the Trust Documents, will
follow its customary collection procedures with respect to secured consumer
loans that it services for itself and others.
Except as otherwise provided in the related Prospectus Supplement, upon the
discovery by any of the Servicer, the Trustee or the Indenture Trustee, or
receipt of written notice by the Servicer of any breach by the Servicer of
certain of its covenants that materially and adversely affects the interests
of a Trust or the related Securityholders in a Contract (an "Administrative
Contract"), unless such breach shall have been cured by the second Accounting
Date following the Servicer's discovery or receipt of written notice of such
breach, the Servicer will be required to purchase the related Contract for the
Purchase Amount on the related Deposit Date. The purchase obligation will
constitute the sole remedy available to the Certificateholders, the Trustee on
behalf of Certificateholders, the Noteholders or the Indenture Trustee on
behalf of Noteholders against the Servicer for any such uncured breach, except
with respect to certain indemnities of the Servicer under the Trust Documents.
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Under the Trust Documents, the Servicer will be required to use its best
efforts to repossess or otherwise comparably convert the ownership of any
Product securing a Contract with respect to which the Servicer has determined
that payments thereunder are not likely to be resumed as soon as practicable
after default on such Contract, but in no event later than the day on which
any portion of a Scheduled Payment has become days delinquent. The Servicer
is authorized to follow such of its normal collection practices and procedures
as it deems necessary or advisable to realize upon any Contract. The Servicer
may repossess and sell the Product securing such Contract at judicial sale, or
take any other action permitted by applicable law. See "Certain Legal Aspects
of the Contracts." The Servicer will be entitled to recover all reasonable
expenses incurred by it in connection therewith. The proceeds of such
realization (net of such expenses) will be deposited in the Collection Account
at the time and in the manner described above under "--Collections."
The Trust Documents will provide that the Servicer will indemnify and defend
the Trustee, the Indenture Trustee, the Trust and the Securityholders against,
among other things, any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel and expenses of
litigation, arising out of or resulting from the use, ownership or operation
by the Servicer or any affiliate thereof of any Product or in respect of any
action taken or failed to be taken by the Servicer with respect to any portion
of the Trust Property in violation of the provisions of the Trust Documents.
The Servicer's obligations to indemnify the Trustee, the Indenture Trustee,
the Trust and the Securityholders for the Servicer's actions or omissions will
survive the removal of the Servicer but will not apply to any action or
omission of a successor Servicer.
SERVICING COMPENSATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each series of Securities, the Servicer will be entitled to receive
the Servicing Fee for each Monthly Period in an amount equal to the product of
one-twelfth of the Servicing Rate and the Aggregate Principal Balance as of
the first day of such Monthly Period. The Servicer also will be entitled to
collect and retain any late fees or other administrative fees or similar
charges allowed by the terms of the Contracts or applicable law. Unless
otherwise provided in the related Prospectus Supplement, the "Servicing Rate"
will equal % per annum calculated on the basis of a 360-day year consisting
of twelve 30-day months. As long as Green Tree is the Servicer, the Servicing
Fee and any additional servicing compensation will be paid out of collections
on or with respect to the Contracts after the required distributions to
Noteholders and Certificateholders. If Green Tree is no longer the Servicer,
the Servicing Fee and any additional servicing compensation will be paid out
of collections on or with respect to the Contracts prior to distributions to
Certificateholders and Noteholders. Unless otherwise specified in the related
Prospectus Supplement, a "Monthly Period" with respect to any Distribution
Date is the calendar month immediately preceding the month in which the
Distribution Date occurs.
Green Tree, as Servicer, will be required to pay all expenses incurred by it
in connection with its servicing activities (including fees, expenses and
disbursements of the Trustee, the Indenture Trustee, the Custodian and
independent accountants, taxes imposed on the Servicer and expenses incurred
in connection with distributions and reports to Certificateholders and
Noteholders), except certain expenses incurred in connection with realizing
upon the Contracts.
DISTRIBUTIONS
With respect to each Trust, beginning on the Distribution Date specified in
the related Prospectus Supplement, distributions of principal and interest
(or, where applicable, of principal or interest only) on each class of
Securities entitled thereto will be made by the Trustee or the Indenture
Trustee, as applicable, to the Certificateholders and the Noteholders. The
timing, calculation, allocation, order, source, priorities of and requirements
for all distributions to each class of Certificateholders and all payments to
each class of Noteholders will be set forth in the related Prospectus
Supplement.
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ENHANCEMENT
The amounts and types of enhancement arrangements and the provider thereof,
if applicable, with respect to each class of Securities will be set forth in
the related Prospectus Supplement. If and to the extent provided in the
related Prospectus Supplement, enhancement may be in the form of a financial
guaranty insurance policy, letter of credit, Green Tree guaranty, cash reserve
fund, derivative product, or other form of enhancement, or any combination
thereof, as may be described in the related Prospectus Supplement. If
specified in the applicable Prospectus Supplement, enhancement for a class of
Securities of a Series may cover one or more other classes of Securities in
such Series, and accordingly may be exhausted for the benefit of a particular
class and thereafter be unavailable to such other classes. Further information
regarding any provider of enhancement, including financial information when
material, will be included in the related Prospectus Supplement.
The presence of enhancement may be intended to enhance the likelihood of
receipt by the Certificateholders and the Noteholders of the full amount of
principal and interest due thereon and to decrease the likelihood that the
Certificateholders and the Noteholders will experience losses, or may be
structured to provide protection against changes in interest rates or against
other risks, to the extent and under the conditions specified in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, the enhancement for a class of Securities will not provide
protection against all risks of loss and will not guarantee repayment of the
entire principal and interest thereon. If losses occur which exceed the amount
covered by any enhancement or which are not covered by any enhancement,
Securityholders will bear their allocable share of deficiencies. In addition,
if a form of enhancement covers more than one class of Securities of a Series,
Securityholders of any such class will be subject to the risk that such
enhancement will be exhausted by the claims of Securityholders of other
classes.
EVIDENCE AS TO COMPLIANCE
On or before May 1 of each year the Servicer will deliver to each Trustee
and each Indenture Trustee a report of a nationally recognized accounting firm
stating that such firm has examined certain documents and records relating to
the servicing of secured consumer contracts serviced by the Servicer under
pooling and servicing agreements or sale and servicing agreements similar to
the Trust Documents and stating that, on the basis of such procedures, such
servicing has been conducted in compliance with the applicable Trust
Documents, except for any exceptions set forth in such report. A copy of such
statement may be obtained by any Certificate Owner or Note Owner upon
compliance with the requirements described above. See "Certain Information
Regarding the Securities--Statements to Securityholders" above.
CERTAIN MATTERS REGARDING THE SERVICER
Unless otherwise provided in the related Prospectus Supplement, Green Tree's
appointment as Servicer under the related Trust Documents will continue until
such time as it resigns or, is terminated as Servicer, or until such time, if
any, as a Servicer Termination Event shall have occurred under the related
Trust Documents. The related Trust Documents will provide that the Servicer
may not resign from its obligations and duties as Servicer thereunder, except
upon a determination (as evidenced by an opinion of independent counsel,
delivered and acceptable to the Trustee and the Indenture Trustee), that by
reason of a change in legal requirements its performance of such duties would
cause it to be in violation of such legal requirements in a manner which would
result in a material adverse effect on the Servicer. No such resignation will
become effective until a successor Servicer has assumed the servicing
obligations and duties under the related Trust Documents.
Unless otherwise provided in the related Prospectus Supplement, any
corporation or other entity into which the Servicer may be merged or
consolidated, resulting from any merger or consolidation to which the Servicer
is a party, which acquires by conveyance, transfer or lease substantially all
of the assets of the Servicer or succeeding to all or substantially all the
business of the Servicer, where the Servicer is not the surviving entity,
which corporation or other entity assumes every obligation of the Servicer
under each Trust Document, will be the successor to the Servicer under the
related Trust Documents; provided, however, that (i) such entity is an
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Eligible Servicer, and (ii) immediately after giving effect to such
transaction, no Servicer Termination Event and no event which, after notice or
lapse of time, or both, would become a Servicer Termination Event shall have
occurred and be continuing.
INDEMNIFICATION AND LIMITS ON LIABILITY
Unless otherwise specified in the related Prospectus Supplement, the Trust
Documents will provide that the Servicer will be liable only to the extent of
the obligations specifically undertaken by it under the Trust Documents and
will have no other obligations or liabilities thereunder. The Trust Documents
will further provide that neither the Servicer nor any of its directors,
officers, employees and agents will have any liability to the Trust, the
Certificateholders or the Noteholders, except as provided in the Trust
Documents, for any action taken or for refraining from taking any action
pursuant to the Trust Documents, other than any liability that would otherwise
be imposed by reason of the Servicer's breach of the Trust Documents or
willful misfeasance, bad faith or negligence (including errors in judgment) in
the performance of its duties, or by reason of reckless disregard of
obligations and duties under the Trust Documents or any violation of law.
The Servicer may, with the prior consent of the Trustee and the Indenture
Trustee, if any, delegate duties under the related Trust Documents to any of
its affiliates. In addition, the Servicer may at any time perform the specific
duty of repossessing Products through subcontractors who are in the business
of servicing consumer receivables. The Servicer may also perform other
specific duties through subcontractors; provided, however, that no such
delegation of such duties by the Servicer shall relieve the Servicer of its
responsibility with respect thereto.
SERVICER TERMINATION EVENTS
Unless otherwise provided in the related Prospectus Supplement, "Servicer
Termination Events" under the Trust Documents will consist of (i) any failure
by the Servicer to deliver to the Trustee for distribution to
Certificateholders or the Indenture Trustee for distribution to Noteholders
any proceeds or payment required to be so delivered under the terms of the
Certificates, the Trust Documents, the Notes or the Indenture that continues
unremedied for a period of two Business Days after written notice is received
by the Servicer from the Trustee or the Indenture Trustee, or after discovery
of such failure by a responsible officer of the Servicer; (ii) any failure by
the Servicer to deliver to the Trustee and the Indenture Trustee, certain
reports required by the Trust Documents by the fourth Business Day prior to
the related Distribution Date; (iii) failure on the part of the Servicer duly
to observe or perform in any material respect any other covenants or
agreements of the Servicer set forth in the Certificates, the Trust Documents,
the Notes or the Indenture which failure (A) materially and adversely affects
the rights of Securityholders, and (B) continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee, the
Indenture Trustee or any Securityholder; (iv)(A) the commencement of an
involuntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or another present or future federal or state bankruptcy, insolvency
or similar law (the "Bankruptcy Laws"), and such case is not dismissed within
60 days; or (B) the entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Servicer under the
Bankruptcy Laws, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of any
substantial part of their respective properties or ordering the winding up or
liquidation of the affairs of the Servicer; (v) the commencement by the
Servicer of a voluntary case under any Bankruptcy Law, or the consent by the
Servicer to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Servicer or of any substantial part of the Servicer's property or the making
by the Servicer of an assignment for the benefit of creditors or the failure
by the Servicer generally to pay its debts as such debts become due or the
taking of corporate action by the Servicer in furtherance of any of the
foregoing; or (vi) any representation, warranty or statement of the Servicer
made in the Trust Documents or any certificate, report or other writing
delivered pursuant thereto shall prove to be incorrect in any material respect
as of the time when the same shall have been made, and the incorrectness of
such representation, warranty or statement
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has a material adverse effect on the Trust and, within 30 days after written
notice thereof shall have been given to the Servicer by the Trustee, the
Indenture Trustee or any Securityholder, the circumstances or condition in
respect of which such representation, warranty or statement was incorrect
shall not have been eliminated or otherwise cured.
Unless otherwise specified in the related Prospectus Supplement, if a
Servicer Termination Event occurs and is continuing, the Trustee, the
Indenture Trustee (if any), or a Certificate Majority or a Note Majority, by
notice then given in writing to the Servicer (and to the Trustee and the
Indenture Trustee if given by the Securityholders) may terminate all of the
rights and obligations of the Servicer under the Trust Documents. Immediately
upon the giving of such notice, and, in the case of a successor Servicer other
than the Trustee, the acceptance by such successor Servicer of its
appointment, all authority of the Servicer will pass to the Trustee or other
successor Servicer. The Trustee, the Indenture Trustee and the successor
Servicer may set off and deduct any amounts owed by the Servicer from any
amounts payable to the outgoing Servicer.
On and after the time the Servicer receives a notice of termination, the
Trustee or other successor Servicer specified in the related Prospectus
Supplement (the "Backup Servicer") will be the successor in all respects to
the Servicer and will be subject to all the responsibilities, restrictions,
duties and liabilities of the Servicer under the related Trust Documents;
provided, however, that the successor Servicer shall have no liability with
respect to any obligation which was required to be performed by the prior
Servicer prior to the date that the successor Servicer becomes the Servicer or
any claim of a third party (including a Securityholder) based on any alleged
action or inaction of the prior Servicer. Notwithstanding the above, if the
Backup Servicer shall be legally unable or shall be unwilling to act as
Servicer, the Trustee, the Indenture Trustee, a Certificate Majority or a Note
Majority may petition a court of competent jurisdiction to appoint any
Eligible Servicer as the successor to the Servicer. Pending any such
appointment, the Backup Servicer shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue
to act as Servicer until a successor has been appointed and accepted such
appointment. "Eligible Servicer" means a person which, at the time of its
appointment as Servicer, (A) is servicing a portfolio of consumer retail
installment sales contracts and/or consumer installment loans, (B) is legally
qualified and has the capacity to service the Contracts, (C) has demonstrated
the ability to service professionally and competently a portfolio of consumer
retail installment sales contracts and/or consumer installment loans similar
to the Contracts in accordance with high standards of skill and care, and (D)
is qualified and entitled to use, pursuant to a license or other written
agreement, and agrees to maintain the confidentiality of, the software which
the Servicer uses in connection with performing its duties and
responsibilities under the related Trust Documents or otherwise has available
software which is adequate to perform its duties and responsibilities under
such Trust Documents.
Any successor Servicer shall be entitled to such compensation payable out of
the Collection Account as the outgoing Servicer would have been entitled to
under the Trust Documents if the outgoing Servicer had not resigned or been
terminated.
Upon any termination of, or appointment of a successor to, the Servicer, the
Trustee and the Indenture Trustee (if any) will each give prompt written
notice thereof to Certificateholders and Noteholders, respectively, at their
respective addresses appearing in the Certificate Register or the Note
Register and to each Rating Agency.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, the Trust
Documents may be amended by the Seller, the Servicer, the Trustee and the
Indenture Trustee, if any, but without the consent of any of the
Securityholders, 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 Green Tree or the Servicer)
reasonably satisfactory to the Trustee and the Indenture Trustee, materially
and adversely affect the interests of the Securityholders. The Trust Documents
may also be amended by Green Tree, the Servicer and the Trustee and the
Indenture Trustee (if any), and a Certificate Majority and a Note Majority (if
applicable), for the purpose
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of adding any provisions to or changing in any manner or eliminating any of
the provisions of the Trust Documents or of modifying, in any manner, the
rights of the Certificateholders or the Noteholders. No such amendment may (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the related Contracts or distributions
that are required to be made on any related Certificate or Note or the related
Pass-Through Rate or Interest Rate or (ii) reduce the percentage of the
Certificate Balance evidenced by Certificates or of the aggregate principal
amount of Notes then outstanding required to consent to any such amendment,
without the consent of the holders of all Certificates or all Notes, as the
case may be, then outstanding.
TERMINATION
Unless otherwise provided in the related Prospectus Supplement, with respect
to each Trust, the Trust and the respective obligations of Green Tree, the
Servicer, the Trustee and the Indenture Trustee pursuant to the related Trust
Documents will terminate upon the later of (i) the Distribution Date
immediately following the maturity or other liquidation of the last Contract
(including Green Tree's or the Servicer's purchase of the Contracts, as
described below) or (ii) payment to Certificateholders and Noteholders of all
amounts required to be paid to them pursuant to the related Trust Documents
and the related Indenture and there shall be delivered to the Trustee and the
Indenture Trustee an opinion of counsel that all applicable preference periods
under federal, state and local bankruptcy, insolvency and similar laws have
expired with respect to the payments made pursuant to clause (i) or (ii)
above.
Unless otherwise provided in the related Prospectus Supplement, with respect
to each series of Securities, in order to avoid excessive administrative
expense, Green Tree and the Servicer each will be permitted, at its option, to
purchase from the Trust, on any Distribution Date immediately following an
Accounting Date as of which the Aggregate Principal Balance is equal to or
less than 10% (or such other percentage as may be specified in the related
Prospectus Supplement) of the Cutoff Date Principal Balance, all remaining
Contracts in the related Trust and the other remaining Trust Property at a
price equal to the aggregate of the Purchase Amounts therefor and the
appraised value of any other remaining Trust Property. The exercise of this
right will effect an early retirement of the related Certificates and Notes.
If a General Partner is named in the related Prospectus Supplement, unless
otherwise specified in the related Prospectus Supplement, the Trust Agreement
will provide that, in the event that the sole remaining General Partner
becomes insolvent, withdraws or is expelled as a General Partner or is
terminated or dissolved, the Trust will terminate in 90 days and effect
redemption of the Notes (if any) and prepayment of the Certificates following
the winding-up of the affairs of the related Trust, unless within such 90 days
the remaining General Partner, if any, and holders of a majority of the
Certificates of such series agree in writing to the continuation of the
business of the Trust and to the appointment of a successor to the General
Partner, and the Owner Trustee is able to obtain an opinion of counsel to the
effect that the Trust will not thereafter be an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes.
Unless otherwise specified in the related Prospectus Supplement, with
respect to each series of Securities, the Trustee will give written notice of
the final distribution with respect to the Certificates to each
Certificateholder of record and the Indenture Trustee will give written notice
of the final payment with respect to the Notes (if any), to each Noteholder of
record. The final distribution to any Certificateholder and the final payment
to any Noteholder will be made only upon surrender and cancellation of such
holder's Certificate or Note at the office or agency of the Trustee, with
respect to Certificates, or of the Indenture Trustee, with respect to Notes,
specified in the notice of termination. Any funds remaining in the Trust,
after the Trustee or the Indenture Trustee has taken certain measures to
locate a Certificateholder or Noteholder, as the case may be, and such
measures have failed, will be distributed to The United Way, and the
Certificateholders and Noteholders, by acceptance of their Certificates and
Notes, will waive any rights with respect to such funds.
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THE TRUSTEE
The Trustee or Owner Trustee, as applicable, for each Trust will be
specified in the related Prospectus Supplement. The Trustee, in its individual
capacity or otherwise, and any of its affiliates may hold Certificates or
Notes in their own names or as pledgee. In addition, for the purpose of
meeting the legal requirements of certain jurisdictions, the Trustee, with the
consent of the Servicer, shall have the power to appoint co-trustees or
separate trustees of all or any part of the related Trust. In the event of
such appointment, all rights, powers, duties and obligations conferred or
imposed upon the Trustee by the related 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.
The Trustee of any Trust may resign at any time, in which event the General
Partner, if any, specified in the related Prospectus Supplement or, if no such
General Partner is specified, the Servicer or its successor will be obligated
to appoint a successor trustee. The General Partner, if any, specified in the
related Prospectus Supplement (or, if no such General Partner is specified,
the Servicer) 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
General Partner, if any, specified in the related Prospectus Supplement or, if
no such General Partner is specified, the Servicer 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 or the Notes (other than its execution of
the Certificates and the Notes), the Contracts or any related documents, and
will not be accountable for the use or application by the Servicer of any
funds paid to the Servicer in respect of the Certificates, the Notes or the
Contracts prior to deposit in the related Collection Account.
The Trustee will be required to perform only those duties specifically
required of it under the Trust Documents. Generally, those duties will be
limited to the receipt of the various certificates, reports or other
instruments required to be furnished by the Servicer to the Trustee under the
Trust Documents, 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 Documents.
The Trustee will be under no obligation to exercise any of the rights or
powers vested in it by the Trust Documents or to institute, conduct, or defend
any litigation thereunder or in relation thereto at the request, order or
direction of any of the Certificateholders or Noteholders, unless such
Certificateholders or Noteholders have offered the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby. No Certificateholder nor any Noteholder will have any
right under the Trust Documents to institute any proceeding with respect to
such Trust Documents, unless such holder has given the Trustee written notice
of default and unless the holders of Certificates evidencing not less than 25%
of the Certificate Balance or the holders of Notes evidencing not less than
25% of the aggregate principal balance of the Notes then outstanding, as the
case may be, 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.
ADMINISTRATOR
If an Administrator is specified in the related Prospectus Supplement, such
Administrator will enter into an agreement (the "Administration Agreement")
pursuant to which such Administrator will agree, to the extent provided in
such Administration Agreement, to provide the notices and to perform other
administrative obligations required by the related Indenture and the Trust
Agreement.
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CERTAIN LEGAL ASPECTS OF THE CONTRACTS
RIGHTS IN THE CONTRACTS
The Contracts are "chattel paper" as defined in the UCC as in effect in the
State of Minnesota. Pursuant to the UCC, an ownership interest in chattel
paper may be perfected by possession or by filing a UCC-1 financing statement
in the state where the seller's principal executive office is located.
Accordingly, financing statements covering the Contracts will be filed by
Green Tree in Minnesota.
The Servicer will be obligated from time to time to take such actions as are
necessary to continue the perfection of each Trust's interest in the related
Contracts and the proceeds thereof. Green Tree will warrant in the Trust
Documents with respect to the Contracts held by the related Trust and the
Owner Trustee will pledge such right to the Indenture Trustee as collateral
for the Notes, if any, that, as of the Closing Date, such Contracts have not
been sold, pledged or assigned by Green Tree to any other person, and that it
has good and indefeasible title thereto and is the sole owner thereof free of
any Liens and that, immediately upon the transfer of the Contracts to such
Trust pursuant to the related Trust Document, the Trust will have good and
indefeasible title to and will be the sole owner of the Contracts, free of any
Liens. In the event of an uncured breach of any of such warranties in the
Trust Documents that materially and adversely affects the related Trust's,
Certificateholders' or Noteholders' interest in any Contract (a "Repurchase
Event"), Green Tree will be obligated to repurchase such Contract.
Unless otherwise provided in the related Prospectus Supplement, Green Tree
will hold the Contract Files on behalf of each Trust under a custodian
agreement with the Trust. To facilitate servicing and save administrative
costs, the documents will not be physically segregated from other similar
documents that are in Green Tree's possession. UCC financing statements will
be filed in Minnesota reflecting the sale and assignment of the Contracts to
the Owner Trustee, and Green Tree's accounting records and computer systems
will also reflect such sale and assignment. In addition, the Contracts will be
stamped or otherwise marked to indicate that such Contracts have been sold to
the related Trust. Despite these precautions, if, through inadvertence or
otherwise, any of the Contracts were sold to another party (or a security
interest therein were granted to another party) that purchased (or took such
security interest in) any of such Contracts in the ordinary course of its
business and took possession of such Contracts, the purchaser (or secured
party) would acquire an interest in the Contracts superior to the interest of
the related Trust if the purchaser (or secured party) acquired (or took a
security interest in) the Contracts for new value and without actual knowledge
of such Trust's interest. See "Description of the Trust Documents--Custody of
Contract Files."
SECURITY INTERESTS IN THE PRODUCTS (OTHER THAN AIRCRAFT)
Security interests in some Products must be perfected by notation of the
secured party's lien on the certificate of title or by actual possession of
the certificate of title, depending on the law of the state wherein the
purchaser resides. Security interests in certain other Products must be
perfected by the filing of a UCC financing statement, naming the Obligor as
debtor and Green Tree as secured party. The practice of Green Tree is to take
such action as is required to perfect its security interest under the laws of
the state in which the Product is located. In the event of clerical errors,
administrative delays or otherwise, such actions may not have been taken with
respect to a Product and such security interest may be subordinate to the
interests of, among others, subsequent purchasers of the Products, holders of
perfected security interests in the Product, and the trustee in bankruptcy of
the Obligor. However, such failure would give rise to a Repurchase Event and
obligate Green Tree to repurchase the affected Contract if the interests of
the related Certificateholders, Noteholders or Trust were materially and
adversely affected.
Pursuant to the related Trust Document, Green Tree will assign the security
interests in the Products to the Owner Trustee on behalf of the related Trust.
However, because of the administrative burden and expense that would be
entailed in doing so, none of Green Tree, the Seller, the Owner Trustee or the
Servicer will be required, except to the extent provided below, to amend the
certificates of title or UCC financing statements to identify the Owner
Trustee as the new secured party and, accordingly, Green Tree will continue to
be named as the secured
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party on the certificates of title or UCC financing statements relating to the
Products. Further, the Servicer will be required to note the interest of the
related Trust on the certificates of title for the Products or to amend the
UCC financing statements only upon a Servicer Termination Event. In most
states, an assignment such as that under the related Trust Documents should be
an effective transfer of a security interest without amendment of any lien
noted on the related certificate of title or financing statement, and the
assignee should succeed to the assignor's status as the secured party. In the
absence of fraud or forgery by the Obligor or administrative error by state
recording officials, the notation of the lien of Green Tree on the certificate
of title or the UCC financing statement should be sufficient to protect the
related Trust against the rights of subsequent purchasers of a Product or
subsequent lenders who take a security interest in the related Product.
However, in the absence of such an amendment, the security interest of the
related Trust in the related Products might be defeated by, among others, the
trustee in bankruptcy of Green Tree or the Obligor. However, such failure
would give rise to a Repurchase Event and obligate Green Tree to repurchase
the affected Contract if the interests of the related Certificateholders,
Noteholders or Trust were materially and adversely affected.
In most states, a perfected security interest in a Product subject to
certificate of title or a financing statement continues for four months after
the Product is moved to a different state and thereafter until the owner re-
registers the Product in the new state, but in no event beyond the surrender
of the certificate of title. A majority of states require surrender of a
certificate of title to re-register a Product. Accordingly, the secured party
must surrender possession if it holds the certificate of title to such
Product. In the case of Products registered in states which provide for
notation of a lien but not possession of the certificate of title by the
holder of the security interest in the related Product, the secured party
should receive notice of surrender if the security interest in the Product is
noted on the certificate of title. Accordingly, the secured party should have
the opportunity to re-perfect its security interest in the Product in the
state of relocation. In states that do not require a certificate of title for
registration of a Product, re-registration could defeat perfection.
In the ordinary course of servicing its secured consumer contract portfolio,
it is the practice of Green Tree to effect such re-perfection upon receipt of
notice of re-registration or information from the Obligor as to relocation.
Similarly, when an Obligor sells a Product subject to a certificate of title,
Green Tree must surrender possession of the certificate of title or receive
notice as a result of its lien noted thereon and accordingly should have an
opportunity to require satisfaction of the related Contract before release of
the lien. Under the related Trust Document, the Servicer will be obligated to
take such steps, at the Servicer's expense, as are necessary to maintain
perfection of security interest in such Product, and the failure to take such
steps would obligate the Servicer to purchase the related Contract if such
failure materially and adversely affects the interests of the related
Certificateholders, Noteholders and Trust in such Contracts.
Under the laws of most states, liens for repairs performed on a Product and
liens for unpaid taxes take priority over even a perfected security interest
in a Product. Green Tree in the related Trust Document will represent that,
immediately prior to the sale, assignment and transfer thereof to the related
Trust, each Contract held by such Trust was secured by a valid, subsisting and
enforceable first priority perfected security interest in favor of Green Tree,
as secured party. However, liens for taxes, judicial liens or liens arising by
operation of law could arise at any time during the term of a Contract. In
addition, the laws of certain states and federal law permit the confiscation
of motor vehicles and certain other consumer products by governmental
authorities under certain circumstances if used in unlawful activities, which
may result in the loss of a secured party's perfected security interest in the
confiscated product. No notice will be given to the Owner Trustee, Indenture
Trustee, Certificateholders or Noteholders in the event such a lien or
confiscation arises, and if such lien arises or confiscation occurs after the
date of issuance of any series of Certificates and Notes, neither Green Tree
nor the Servicer will be required to repurchase or purchase the related
Contract.
SECURITY INTERESTS IN AIRCRAFT
In order for a security interest in a United States-registered aircraft to
be valid, it must be perfected in accordance with the Federal Aviation Act.
The UCC has been preempted by the Federal Aviation Act with respect to the
method and location of filing against goods such as aircraft, engines,
propellers, appliances and certain spare parts to the extent that it is
possible to record against them at the Federal Aviation Administration ("FAA")
Aircraft Registry located in Oklahoma City, Oklahoma (the "Registry").
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If the aircraft is registered with the FAA, the mortgage or other security
agreement must be filed for recordation with the Registry in order to be
perfected against third parties, including a trustee in bankruptcy. Despite
the Federal Aviation Act's preemption of the UCC, it is customary to sign and
file UCC financing statements in addition to filing at the Registry because
any de-registration of the aircraft (which can occur automatically in certain
circumstances) may result in the applicability of the UCC to perfection of
such liens.
Exceptions to filings with the Registry include (1) purchase money security
interests which may be filed up to ten days (21 days in some states) after a
debtor receives possession and which will then have, in most states, priority
in the aircraft (unless it is property held as inventory) over a conflicting
security interest in the same aircraft, and (2) buyers in the ordinary course
of business from persons in the business of selling goods of that kind.
Exceptions also include possessory mechanic's and storage liens, which may
or may not need to be filed and which usually have priority over a mortgage,
whether or not such liens are incurred before or after the mortgage is
recorded. Non-possessory mechanic's liens, which exist under many state laws,
probably do not take priority over mortgages previously filed with the
Registry. In some states, a non-possessory mechanic's lien on an aircraft is
required to be filed at the Registry.
Federal tax liens are filed according to Federal law in the appropriate
location in each state and cannot be filed at the Registry. When so filed,
Federal tax liens can have priority over subsequent FAA recorded mortgages in
aircraft with many exceptions, including the exception of a purchase money
security interest. It is an open issue whether unrecorded liens arising out of
FAA penalties have priority over filed security interests in a registered
aircraft.
The principal effect of recordation is that each mortgage or other
conveyance that is filed with the Registry for recordation affecting the
applicable aircraft, engine, propeller, appliance or spare parts (so long as
they are maintained at any designated locations) is valid and perfected from
the time of filing as to all persons with whatever priority is given by state
law. If not filed for recordation, such a mortgage or other conveyance will
not be valid against third persons except persons having actual notice
thereof. The date of filing for recordation at the Registry is the date of
validity and perfection of the mortgage or other conveyance, even though
recordation by the Registry may not occur for several weeks or months. The
case law is not clear as to the effect of a rejection of the documents when
they are examined by the Registry several weeks after filing. The usual
practice is to retain expert FAA counsel to ensure, among other things, that
the documents are in due form for recording, that the record is free and clear
of liens and that the documents are filed correctly. Title companies are also
available to check the FAA records and file documents.
If the laws of a state govern the validity of the mortgage or other security
agreement and the aircraft is not registered with the Registry or with the
registry of a Geneva Convention country, under the UCC, the perfection of the
mortgage or any security interest in other collateral would be made according
to, and with the effect given by, the law (including the conflict of laws
rules) of the jurisdiction in which the debtor is located.
REPOSSESSION
In the event of default by an Obligor, the owner of a retail installment
sales contract or installment loan has all the remedies of a secured party
under the UCC, except where specifically limited by other state laws. The
remedies of a secured party under the UCC include the right to repossession by
self-help means, unless such means would constitute a breach of the peace.
Self-help repossession is the method employed by Green Tree in most cases and
is accomplished simply by taking possession of the Product. In the event of
default by the Obligor, some jurisdictions require that the Obligor be
notified of the default and be given a time period within which he may cure
the default prior to repossession. In cases where the Obligor objects or
raises a defense to repossession, or if otherwise required by applicable state
law, a court order must be obtained from the appropriate state court, and the
Product must then be repossessed in accordance with that order. If a breach of
the peace cannot be avoided, judicial action is required. A secured party may
be held responsible for damages caused by a wrongful repossession of a
Product, including a wrongful repossession conducted by an agent of the
secured
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party. The Servicer will be required to indemnify the related Trust for any
liability imposed upon such Trust as a result of a wrongful repossession. In
many states, a Product may be repossessed without notice to the Obligor, but
only if the repossession can be accomplished without a breach of the peace.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and various other state laws require a secured party who has
repossessed the collateral securing an obligation to provide an obligor with
reasonable notice of the date, time and place of any public sale and/or the
date after which any private sale of the collateral may be held. The obligor
has the right to redeem the collateral prior to actual sale by paying the
secured party the entire unpaid time balance of the obligation (less any
unaccrued finance charges) plus accrued default charges, reasonable expenses
for repossessing, holding and preparing the collateral for disposition and
arranging for its sale, plus, to the extent provided in the financing
documents, reasonable attorneys' fees, or in some states, by payment of
delinquent installments or the unpaid principal balance of the related
obligation.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of Products generally will be applied first to the
expenses of repossession and resale and then to the satisfaction of the
related Contract. While some states impose prohibitions or limitations on
deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in other
states that do not prohibit or limit such judgments, subject to satisfaction
of statutory procedural requirements by the holder of the obligation. However,
any deficiency judgment would be a personal judgment against the Obligor for
the shortfall, and a defaulting Obligor can be expected to have very little
capital or sources of income available following repossession. Therefore, in
many cases, it may not be useful to seek a deficiency judgment or, if one is
obtained, it may be settled at a significant discount or not paid at all.
Green Tree generally seeks to recover any deficiency existing after
repossession and sale of a Product.
Occasionally, after resale of a repossessed Products, and payment of all
expenses and indebtedness, there is a surplus of funds. In that case, the law
of most states requires the secured party to remit the surplus to any holder
of another lien with respect to the Product, if proper notification of demand
for proceeds is received prior to distribution, or, if no such lienholder
exists, to remit the surplus to the former owner of the Product.
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT
The Relief Act imposes certain limitations upon the actions of creditors
with respect to persons serving in the Armed Forces of the United States and,
to a more limited extent, their dependents and guarantors and sureties of debt
incurred by such persons. An obligation incurred by a person prior to entering
military service cannot bear interest at a rate in excess of 6% during the
person's term of military service, unless the obligee petitions a court which
determines that the person's military service does not impair his or her
ability to pay interest at a higher rate. Further, a secured party may not
repossess during a person's military service a Product subject to an
installment sales contract or a promissory note entered into prior to the
person's entering military service, for a loan default which occurred prior to
or during such service, without court action. The Relief Act imposes penalties
for knowingly repossessing property in contravention of its provisions.
Additionally, dependents of military personnel are entitled to the protection
of the Relief Act, upon application to a court, if such court determines the
obligation of such dependent has been materially impaired by reason of the
military service. To the extent an obligation is unenforceable against the
person in military service or a dependent, any guarantor or surety of such
obligation will not be liable for performance.
CONSUMER PROTECTION LAWS
Numerous Federal and state consumer protection laws and related regulations
impose substantive and disclosure requirements upon lenders and servicers
involved in consumer finance. Some of the Federal laws and regulations include
the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade
Commission
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Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act,
the Magnuson-Moss Warranty Act, and the Federal Reserve Board's Regulations B
and Z.
In addition to Federal law, state consumer protection statutes regulate,
among other things, the terms and conditions of retail installment contracts
and promissory notes pursuant to which purchasers finance the acquisition of
consumer products. These laws place finance charge ceilings on the amount that
a creditor may charge in connection with financing the purchase of a consumer
product. These laws also impose other restrictions on consumer transactions
and require contract disclosures in addition to those required under federal
law. These requirements impose specific statutory liabilities upon creditors
who fail to comply. In some cases, this liability could affect the ability of
an assignee, such as the related Trust, to enforce consumer finance contracts
such as the Contracts. The "Credit Practices" Rule of the Federal Trade
Commission (the "FTC") imposes additional restrictions on contract provisions
and credit practices.
The FTC's so-called holder-in-due-course rule has the effect of subjecting
persons that finance consumer credit transactions (and certain related lenders
and their assignees) to all claims and defenses which the purchaser could
assert against the seller of the goods and services. An assignee's affirmative
liability to pay money to such aggrieved purchaser in the event of a
successful claim is limited to amounts paid by the purchaser under the
consumer credit contract. However, the assignee's ability to collect any
balance remaining due thereunder is subject to these claims and defenses.
Accordingly, each Trust, as assignee of the related Contracts, will be subject
to claims or defenses, if any, that the purchaser of the related Product may
assert against the seller of such Product.
Courts have applied general equitable principles to secured parties pursuing
repossession or litigation involving deficiency balances. These equitable
principles may have the effect of relieving an Obligor from some or all of the
legal consequences of a default.
Green Tree will warrant in the related Trust Document that as of the date of
origination each Contract held by the related Trust complied with all
requirements of applicable law in all material respects. Accordingly, if such
Trust's interest in a Contract were materially and adversely affected by a
violation of any such law, such violation would constitute a Repurchase Event
and would obligate Green Tree to repurchase the Contract unless the breach
were cured. Under the related Trust Document, Green Tree will be required to
indemnify the related Trust for any liability resulting from the failure of a
Contract to be in compliance with all requirements of law. See "Description of
the Trust Documents--Sale and Assignment of the Contracts."
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including Federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a lender to
realize upon collateral or enforce a deficiency judgment. For example, in a
proceeding under Chapter 13 of the U.S. Bankruptcy Code of 1978, as amended, a
court may prevent a lender from repossessing collateral, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the
market value of the collateral at the time of bankruptcy (as determined by the
court), leaving the party providing financing as a general unsecured creditor
for the remainder of the indebtedness. A bankruptcy court may also reduce the
monthly payments due under a contract, change the rate of interest and time of
repayment of the indebtedness or substitute collateral securing such
indebtedness.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the material federal income tax
consequences relating to the purchase, ownership, and disposition of the
Securities. 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 deal with federal income tax consequences applicable to all
categories of investors, some of which may be subject to special rules.
Investors are encouraged to consult their own tax advisors with respect to the
federal, state, local, and any other tax consequences of the purchase,
ownership, and disposition of the Securities.
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The Trust created with respect to each series of Securities will be provided
with an opinion of Dorsey & Whitney P.L.L.P., counsel to the Seller
("Counsel"), regarding certain federal income tax matters discussed below.
Such an opinion, however, is not binding on the Internal Revenue Service (the
"Service") or the courts. The opinion of Counsel will specifically address
only those issues specifically identified below as being covered by such
opinion; however, the opinion of Counsel also will state that the additional
discussion set forth below accurately sets forth Counsel's advice with respect
to material tax issues. No ruling on any of the issues discussed below will be
sought from the Service.
Many aspects of the federal tax treatment of the purchase, ownership and
disposition of the Securities of any series will depend upon whether the Trust
created with respect to such series is structured as an owner trust (treated
as a partnership for federal income tax purposes) or as a grantor trust. The
Prospectus Supplement for each series of Securities will indicate whether the
Trust created for such series will be treated as a partnership or as a grantor
trust. The following discussion deals first with series with respect to which
the Trust has been structured as an owner trust (treated as a partnership),
and then with the series with respect to which the Trust has been structured
as a grantor trust.
OWNER TRUST SERIES
TAX STATUS OF THE TRUST
With respect to each series of Securities which includes both Notes and
Certificates, Counsel 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. As a result, the Trust itself will not be subject
to federal income tax but, instead, each Certificateholder will be required to
take into account its distributive share of items of income and deduction
(including deductions for distributions of interest to the Noteholders) of the
Trust as though such items had been realized directly by the
Certificateholder. 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 income of the Trust will exempt it from
the rule that certain publicly traded partnerships are taxable as
corporations. There are, however, no cases or Service rulings on transactions
involving a trust issuing both debt and equity interests with terms similar to
those of the Notes and the Certificates. As a result, the Service may disagree
with all or a part of this discussion.
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. The
Trust's taxable income would include all its income on the Contracts, possibly
reduced by its interest expense on the Notes. Any such corporate income tax
could materially reduce cash available to make payments on the Notes and
distributions on the Certificates.
TAX CONSEQUENCES TO NOTEHOLDERS
Treatment of the Notes as Indebtedness. The Owner Trustee, on behalf of the
Trust, will agree, and the Noteholders will agree by their purchase of Notes,
to treat the Notes as debt for federal income tax purposes. Counsel will
deliver its opinion that the Notes will be classified as debt for federal
income tax purposes. The discussion below assumes this characterization of the
Notes is correct.
Interest Income on the Notes. Interest on the Notes will be taxable as
ordinary interest income when received by Noteholders utilizing the cash-basis
method of accounting and when accrued by Noteholders utilizing the accrual
method of accounting. Under the applicable regulations, the Notes would be
considered issued with original issue discount ("OID") if the "stated
redemption price at maturity" of a Note (generally equal to its principal
amount as of the date of issuance plus all interest other than "qualified
stated interest" payable prior to or at maturity) exceeds the original issue
price (in this case, the initial offering price at which a substantial amount
of the Notes are sold to the public). Any OID would be considered de minimis
under the OID regulations if it does not exceed 1/4% of the stated redemption
price at maturity of a Note multiplied by the
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number of full years until its maturity date. It is anticipated that the Notes
will not be considered issued with more than de minimis OID. Under the OID
regulations, an owner of a Note issued with a de minimis amount of OID must
include such OID in income, on a pro rata basis, as principal payments are
made on the Note.
While it is not anticipated that the Notes will be issued with more than de
minimis OID, it is possible that they will be so issued or will be deemed to
be issued with OID. This deemed OID could arise, for example, if interest
payments on the Notes are not deemed to be "qualified stated interest" because
the Notes do not provide for default remedies ordinarily available to holders
of debt instruments or because no penalties are imposed as a result of any
failure to make interest payments on the Notes. Based upon existing authority,
however, the Trust will treat interest payments on the Notes as qualified
stated interest under the OID regulations. If the Notes are issued or are
deemed to be issued with OID, all or a portion of the taxable income to be
recognized with respect to the Notes would be includible in the income of
Noteholders as OID. Any amount treated as OID would not, however, be
includible again when the amount is actually received. If the yield on a class
of Notes were not materially different from its coupon, this treatment would
have no significant effect on Noteholders using the accrual method of
accounting. However, cash method Noteholders may be required to report income
with respect to the Notes in advance of the receipt of cash attributable to
such income.
A Noteholder must include OID in income as interest over the term of the
Notes under a constant yield method. In general, OID must be included in
income in advance of the receipt of cash representing that income. Each
Noteholder is encouraged to consult its own tax advisor regarding the impact
of the OID rules if the Notes are issued with OID.
Market Discount. The Notes, 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 a Noteholder purchases the
Note 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. Market discount also will be recognized and taxable
as ordinary interest income as payments of principal are received on the Notes
to the extent that the amount of such payments does not exceed the accrued
market discount. Generally, the accrued market discount will be the total
market discount on the Note multiplied by a fraction, the numerator of which
is the number of days the Noteholder held the Note and the denominator of
which is the number of days after the date the Noteholder acquired the Note
until and including its maturity date. The Noteholder may elect, however, to
determine accrued market discount under the constant-yield method, which
election shall not be revoked without the consent of the Service.
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 purchase or carry a
Note with accrued market discount. A Noteholder may elect to include market
discount in gross income as it accrues and, if such Noteholder makes such an
election, is exempt from this rule. The adjusted basis of a Note 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. Any such election to include market discount in gross income as
it accrues shall apply to all debt instruments held by the Noteholder 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.
Amortizable Bond Premium. In general, if a Noteholder purchases a Note at a
premium (i.e., an amount in excess of the amount payable upon the maturity
thereof), such Noteholder will be considered to have purchased such Note with
"amortizable bond premium" equal to the amount of such excess. Such Noteholder
may elect to deduct the amortizable bond premium as it accrues under a
constant-yield method over the remaining term of the Note. Such Noteholder's
tax basis in the Note will be reduced by the amount of the amortizable bond
premium deducted. Amortizable bond premium with respect to a Note will be
treated as an offset to interest income on such Note, and a Noteholder's
deduction for amortizable bond premium with respect to a Note will be limited
in each year to the amount of interest income derived with respect to such
Note for such year. Any
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election to deduct amortizable bond premium shall apply to all debt
instruments (other than instruments the interest on which is excludible from
gross income) held by the Noteholder 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 Note held by a
Noteholder who does not elect to deduct the premium will decrease the gain or
increase the loss otherwise recognized on the disposition of the Note.
Disposition of Notes. If a Noteholder sells a Note, the Noteholder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the Noteholder's adjusted tax basis in the Note. The
adjusted tax basis of a Note to a particular Noteholder generally will equal
the Noteholder's cost for the Note, increased by any market discount, OID and
gain previously included by such Noteholder in income with respect to the Note
and decreased by principal payments previously received by such Noteholder and
the amount of bond premium previously amortized with respect to the Note. Any
such gain or loss will be capital gain or loss if the Note 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 Note 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 Noteholder who is a
nonresident alien individual or a foreign corporation and who does not hold
the Note 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 Noteholder will be entitled to receive interest payments on the
Notes free of United States federal income tax provided that such Noteholder
periodically provides the Indenture Trustee (or other person who would
otherwise be required to withhold tax) with a statement certifying under
penalty of perjury that such Noteholder is not a United States person and
providing the name and address of such Noteholder and will not be subject to
federal income tax on gain from the disposition of a Note unless the
Noteholder 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 Indenture Trustee will furnish to each
Noteholder 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 such information as may be required with
respect to interest and original issue discount, if any, with respect to the
Notes.
Backup Withholding. Under certain circumstances, a Noteholder may be subject
to "backup withholding" at a 31% rate. Backup withholding may apply to a
Noteholder who is a United States person if the holder, among other
circumstances, fails to furnish his Social Security number or other taxpayer
identification number to the Indenture Trustee. Backup withholding may apply,
under certain circumstances, to a Noteholder who is a foreign person if the
Noteholder fails to provide the Indenture Trustee or the Noteholder's
securities broker with the statement necessary to establish the exemption from
federal income and withholding tax on interest on the Note. Backup
withholding, however, does not apply to payments on a Note made to certain
exempt recipients, such as corporations and tax-exempt organizations, and to
certain foreign persons. Noteholders should consult their tax advisors for
additional information concerning the potential application of backup
withholding to payments received by them with respect to a Note.
Possible Alternative Treatment of the Notes. If, contrary to the opinion of
Counsel, the Service successfully asserted that the Notes did not represent
debt for federal income tax purposes, the Notes might 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 Notes recharacterized as equity). Alternatively, and most
likely in the view of Counsel, the Trust might be treated as a publicly traded
partnership that would not be taxable as a corporation because it would meet
certain qualifying income tests. Nonetheless, treatment of the Notes as equity
interests in such a partnership could have adverse tax consequences to certain
holders. For example, income to foreign holders generally would be subject to
federal tax and federal tax return filing and withholding requirements, and
individual holders might be subject to certain limitations on their ability to
deduct their share of Trust expenses.
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TAX CONSEQUENCES TO CERTIFICATEHOLDERS
Treatment of the Trust as a Partnership. The Seller, the General Partner and
the Owner Trustee will agree, and the Certificateholders will agree by their
purchase of Certificates, to treat the Trust as a partnership for purposes of
federal and state income tax, franchise tax and any other tax measured in
whole or in part by income, with the assets of the partnership being the
assets held by the Trust, the partners of the partnership being the
Certificateholders and the General Partner, and the Notes being debt of the
partnership. The proper characterization of the arrangement involving the
Trust, the Certificates, the Notes, the General Partners, the Seller and the
Servicer, however, is not certain because there is no authority on
transactions closely comparable to that contemplated herein.
A variety of alternative characterizations are possible. For example,
because the Certificates have certain features characteristic of debt, the
Certificates might be considered debt of the Trust. Any such characterization
would not result in materially adverse tax consequences to Certificateholders
as compared to the consequences from treatment of the Certificates as equity
in a partnership, described below. The following discussion assumes that the
Certificates represent equity interests in a partnership.
Partnership Taxation. As a partnership, the Trust will not be subject to
federal income tax. Rather, each Certificateholder will 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 and finance charges earned on the Contract (including
appropriate adjustments for market discount, OID and bond premium) and any
gain upon collection or disposition of the Contract. The Trust's deductions
will consist primarily of interest accruing with respect to the Notes,
servicing and other fees, and losses or deductions upon collection or
disposition of the Contract.
The tax items of a partnership are allocable to the 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 the Certificateholders will 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, including interest
accruing at the Pass-Through Rate for such month and interest on amounts
previously due on the Certificates but not yet distributed; (ii) any Trust
income attributable to discount on the Contracts that corresponds to any
excess of the principal amount of the Certificates over their initial issue
price; (iii) Prepayment Premium payable to the Certificateholders for such
month; and (iv) any other amounts of income payable to the Certificateholders
for such month. Although it is not anticipated that the Certificates will be
issued at a price which exceeds their principal amount, such allocations of
Trust income to the Certificateholders will be reduced by any amortization by
the Trust of premium on Contracts that corresponds to any such excess of the
issue price of Certificates over their principal amount. All remaining taxable
income of the Trust will be allocated to the General Partner. 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 Pass-Through 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. In addition, because
tax allocations and tax reporting will be done on a uniform basis for all
Certificateholders but Certificateholders may be purchasing Certificates at
different times and at different prices, Certificateholders may be required to
report on their tax returns taxable income that is greater or less than the
amount reported to them by the Trust.
A Certificateholder's share of expenses of the Trust (including fees to the
Servicer but not interest expense) will be miscellaneous itemized deductions.
An individual, an estate, or a trust that holds a Certificate either directly
or through a pass-through entity will be allowed to deduct such expenses under
Section 212 of the Code
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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 determined under the Code
($114,700 in 1995, 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 will exceed
the net cash distributions related to such income. Certificateholders may
deduct any loss on disposition of the Contract to the extent permitted under
the Code.
Discount and Premium. It is believed that the Contracts were not issued with
OID, and, therefore, the Trust should not have OID income. The purchase price
paid by the Trust for the Contracts may exceed the remaining principal balance
of the Contracts at the time of purchase. If the Trust is deemed to acquire
the Contracts at such a premium or at a market discount, the Trust will elect
to offset any such premium against interest income on the Contracts or to
include any such discount in income currently as it accrues over the life of
the Contracts. The Trust will make this premium or market discount calculation
on an aggregate basis but may be required to recompute it on a Contract-by-
Contract basis. As indicated above, a portion of such premium deduction or
market discount income may be allocated to Certificateholders.
Distributions to Certificateholders. Certificateholders generally will not
recognize gain or loss with respect to distributions from the Trust. A
Certificateholder will recognize gain, however, to the extent that any money
distributed exceeds the Certificateholder's adjusted basis in its Certificates
(as described below under "Disposition of Certificates") immediately before
the distribution. A Certificateholder will recognize loss upon termination of
the Trust or termination of any Certificateholder's interest in the Trust if
the Trust only distributes money to the Certificateholder and the amount
distributed is less than the Certificateholder's adjusted basis in the
Certificates. Any such gain or loss generally will be capital gain or loss if
the Certificates are held as capital assets and will be long-term gain or loss
if the holding period of the Certificates is more than one year.
Section 708 Termination. Under Section 708 of the Code, the Trust will be
deemed to terminate for federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a 12-
month period. If such a termination occurs, the Trust will be considered to
distribute its assets to the partners, who would then be treated as
recontributing those assets to the Trust, as a new partnership. Such deemed
distribution and recontribution should not result in material adverse tax
consequences to Certificateholders (although it may accelerate the recognition
of income from the Trust for Certificateholders whose taxable year is
different than that of the Trust). Because the Trust may not have the
necessary data, the Trust will not comply with certain technical requirements
that may apply when such a constructive termination occurs. As a result, the
Trust may be subject to certain tax penalties and may incur additional
expenses if it is required to comply with those requirements.
Disposition of Certificates. If a Certificateholder sells a Certificate, the
Certificateholder generally will recognize capital gain or loss in an amount
equal to the difference between the amount realized on the sale and the
seller's tax basis in the Certificate. A Certificateholder's tax basis in a
Certificate generally will equal the Certificateholder's cost increased by the
Certificateholder's share of Trust income and decreased by any distributions
received with respect to such Certificate. In addition, both the tax basis in
the Certificate and the amount realized on a sale of a Certificate would
include the Certificateholder's share of the Notes and other liabilities of
the Trust. A Certificateholder acquiring Certificates at different prices may
be required to maintain a single aggregate adjusted tax basis in such
Certificates, and, upon sale or other disposition of some of the Certificates,
allocate a portion of such aggregate tax basis to the Certificates sold
(rather than maintain a separate tax basis in each Certificate for purposes of
computing gain or loss on a sale of that Certificate).
Any gain on the sale of a Certificate attributable to the
Certificateholder's share of unrecognized accrued market discount on the
Contract would generally be treated as ordinary income to the
Certificateholder and would give rise to special tax reporting requirements.
The Trust does not expect to have any other assets that would
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give rise to such special reporting requirements. Thus, to avoid those special
reporting requirements, the Trust will elect to include market discount in
income as it accrues.
If a Certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the Certificates that exceeds the aggregate
cash distributions with respect thereto, such excess generally will give rise
to a capital loss upon the retirement of the Certificates.
Allocations Between Transferors and Transferees. In general, the Trust's
taxable income and losses will be determined monthly, and the tax items for a
particular calendar month will be apportioned among the Certificateholders in
proportion to the principal amount of Certificates owned by them as of the
close of the related Record Date. As a result, a Certificateholder purchasing
a Certificate may be allocated tax items (which will affect the
Certificateholder's tax liability and tax basis) attributable to periods
before the Certificateholder actually owns the Certificate. The use of such a
convention may not be permitted by existing regulations. If a monthly
convention is not permitted (or only applies to transfers of less than all of
the Certificateholder's interest), taxable income or losses of the Trust may
be reallocated among the Certificateholders. The General Partners are
authorized to revise the Trust's method of allocation between transferors and
transferees to conform to a method permitted by future regulations.
Section 754 Election. In the event that a Certificateholder sells a
Certificate at a profit or loss, the purchasing Certificateholder will have a
higher or lower basis in the Certificate than the selling Certificateholder
had. The tax basis of the Trust's assets will not be adjusted to reflect that
higher or lower basis unless the Trust files an election under Section 754 of
the Code. In order to avoid the administrative complexities that would be
involved in keeping accurate accounting records, as well as potentially
onerous information reporting requirements, the Trust will not make such
election. As a result, Certificateholders may be allocated a greater or lesser
amount of Trust income than would be appropriate based on their own purchase
price for Certificates.
Administrative Matters. Pursuant to an administration agreement (the
"Administration Agreement"), Wilmington Trust Company will monitor the
performance of the following responsibilities of the Trust by other service
providers. The Trust is required to keep or have kept complete and accurate
books of the Trust. Such books will be maintained for financial reporting and
tax purposes on an accrual basis and the fiscal year of the Trust will be the
calendar year. The Trust will file a partnership information return (IRS Form
1065) with the Service for each taxable year of the Trust and will report each
Certificateholder's allocable share of items of Trust income and expense to
Certificateholders and the Service on Schedule K-1. The Trust will provide the
Schedule K-1 information to nominees that fail to provide the Trust with
certain required information statements relating to identification of
beneficial owners of Certificates and such nominees will be required to
forward such information to such beneficial owners. Generally,
Certificateholders must file tax returns that are consistent with the
information return filed by the Trust or be subject to penalties unless the
Certificateholder notifies the Service of all such inconsistencies.
Green Tree or a subsidiary identified in the related Prospectus Supplement
will be designated as the tax matters partner in the Trust Agreement and, as
such, will be responsible for representing the Certificateholders in any
dispute with the Service. The Code provides for administrative examination of
a partnership as if the partnership were a separate and distinct taxpayer.
Generally, the statute of limitations for partnership items does not expire
before three years after the date on which the partnership information return
is filed. Any adverse determination following an audit of the return of the
Trust by the appropriate taxing authorities could result in an adjustment of
the returns of the Certificateholders, and, under certain circumstances, a
Certificateholder may be precluded from separately litigating a proposed
adjustment to the items of the Trust. An adjustment could also result in an
audit of a Certificateholder's returns and adjustments of items not related to
the income and losses of the Trust.
Tax Consequences to Foreign Certificateholders. It is not clear whether the
Trust will be considered to be engaged in a trade or business in the United
States for purposes of federal withholding taxes with respect to non-U.S.
persons because there is no clear authority dealing with that issue under
facts substantially similar to those
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described herein. Although it is not expected that the Trust will be engaged
in a trade or business in the United States for such purposes, the Trust will
withhold as if it were so engaged in order to protect the Trust from possible
adverse consequences of a failure to withhold. It is expected that the Trust
will withhold on the portion of its taxable income that is allocable to
foreign Certificateholders pursuant to Section 1446 of the Code, as if such
income were effectively connected to a U.S. trade or business, at a rate of
35% for foreign holders that are taxable as corporations and 39.6% for all
other foreign Certificateholders. Subsequent adoption of Treasury regulations
or the issuance of other administrative pronouncements may require the Trust
to change its withholding procedures. In determining a Certificateholder's
nonforeign status, the Trust may rely on Form W-8, Form W-9 or the
Certificateholder's certification of nonforeign status signed under penalties
of perjury.
Each foreign Certificateholder might be required to file a U.S. individual
or corporate income tax return (including, in the case of a corporation, the
branch profits tax) on its share of the Trust's income. Each foreign
Certificateholder must obtain a taxpayer identification number from the
Service and submit that number to the Trust on Form W-8 in order to assure
appropriate crediting of the taxes withheld. A foreign Certificateholder
generally will be entitled to file with the Service a claim for refund with
respect to taxes withheld by the Trust, taking the position that no taxes are
due because the Trust is not engaged in a U.S. trade or business. However, the
Service may assert that additional taxes are due, and no assurance can be
given as to the appropriate amount of tax liability.
Backup Withholding. Under certain circumstances, a Certificateholder may be
subject to "backup withholding" at a 31% rate. See the discussion above under
"Tax Consequences to Noteholders--Backup Withholding."
Proposed Tax Legislation. Legislation previously introduced in Congress
would apply special rules to "large partnerships," defined as partnerships
with at least 250 partners during a taxable year (counting towards such total
each owner during the year of a partnership interest that is transferred
during the year). Under the legislation, certain computations are made at the
partnership level rather than the partner level. In particular, taxable income
is calculated at the partnership level and is calculated generally in the same
manner as for an individual, except that 70% of miscellaneous itemized
deductions (such as expenses for the production of nonbusiness income) are
disallowed. As a result, all partners in a large partnership (including
corporations) might have a portion of their share of partnership deductions
disallowed. Moreover, large partnerships would become subject to new audit
procedures; among other things, an adjustment to taxable income of the
partnership for a prior year would flow through to current partners in the
year the audit was settled, and the partnership itself (rather than the
partners) would be subject to any applicable interest or penalties. Under the
previous proposal, these rules would apply to partnership taxable years ending
on or after December 31, 1994. No prediction can be made whether such
legislation will be enacted, the form in which it might be enacted, or the
ultimate effective date of such legislation.
GRANTOR TRUST SERIES
TAX STATUS OF THE TRUST
With respect to each series of Securities which includes only Certificates,
Counsel will deliver its opinion that the Trust will be classified as a
grantor trust for federal income tax purposes and not as an association which
is taxable as a corporation. The Trust will be classified as a trust
regardless of whether the Seller is considered to retain an interest in the
Contracts, as discussed below. While such a retained interest might be viewed
as a second class of beneficial interest in the Trust and Treasury Regulations
Section 301.7701-4(c) generally provides that an investment trust with more
than one class of ownership interest will be classified as an association
taxable as a corporation or a partnership, that regulation would treat the
Trust as a grantor trust because there will be no power under the Pooling and
Servicing Agreement to vary the investment of the Certificateholders, the
purpose of the Trust will be to facilitate direct investment in the Contracts,
and the existence of multiple classes of ownership interests in the Trust will
be incidental to that purpose.
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TAX CONSEQUENCES TO CERTIFICATEHOLDERS
Because the Trust will be classified as a grantor trust, each
Certificateholder will be treated for federal income tax purposes as the owner
of an undivided interest in the Contracts and other Trust Property.
Accordingly, subject to the discussion below of certain limitations on
deductions and the "stripped bond" rules of the Code, each Certificateholder
must report on its federal income tax return its pro rata share of the entire
income from the Contracts and other Trust Property, and may deduct its pro
rata share of the fees paid by the Trust, at the same time as such items would
be reported under the Certificateholder's tax accounting method if it held
directly a pro rata interest in the assets of the Trust and received and paid
directly the amounts received and paid by the Trust. A Certificateholder's
share of expenses of the Trust will be miscellaneous itemized deductions
subject to certain limits on deductibility. See the discussion above under
"OWNER TRUST SERIES--Tax Consequences to Certificateholders--Partnership
Taxation."
A purchaser of a Certificate will be treated as purchasing an interest in
each Contract in the Trust at a price determined by allocating the purchase
price paid for the Certificate among all Contracts in proportion to their fair
market values at the time of purchase of the Certificate. To the extent that
the portion of the purchase price of a Certificate allocated to a Contract is
greater than or less than the portion of the principal balance of the Contract
allocable to the Certificate, that interest in the Contract will be deemed to
have been acquired with premium or discount, respectively. See the discussions
above under "OWNER TRUST SERIES--Tax Consequences to Noteholders--Market
Discount" and "--Amortizable Bond Premium."
The treatment of any discount will depend on whether the discount represents
original issue discount or market discount. It is not anticipated that the
Contracts will have original issue discount, unless they are subject to the
"stripped bond" rules of the Code described below. If the Contracts are
subject to the stripped bond rules of the Code, the market discount rules
discussed above may not apply.
Stripped Certificates. The Servicing Fee to be received by the Servicer and
the Credit Enhancement Fee to be received by the Seller may be questioned by
the Service with respect to certain Contracts as exceeding a reasonable fee
for the services performed by the Servicer and the Seller with respect to such
Contract, and a portion of such Servicing Fee or Credit Enhancement Fee could
be recharacterized as an ownership interest retained by the Servicer or the
Seller in a portion of the interest payments to be made pursuant to such
Contract. In such event, those Contracts may be treated as "stripped bonds"
within the meaning of Section 1286 of the Code, and Certificates that
represent an interest in stripped bonds ("Stripped Certificates") purchased at
a discount may be subject to the original issue discount rules of the Code
rather than to the market discount and premium rules discussed above. In this
regard, Certificateholders should note that the Servicing Fee for Contracts
held by the Trust exceeds a "safe harbor" reasonable servicing fee set forth
in Rev. Proc. 91-50 applicable only to residential mortgages. Under rules
similar to those provided in Rev. Proc. 91-49 applicable to mortgages secured
by real property, a Certificateholder may be required to account for any
discount on a Stripped Certificate as market discount rather than original
issue discount if either (i) the amount of original issue discount with
respect to the Certificate was treated as zero under the original issue
discount de minimis rule when the Certificate was stripped or (ii) no more
than 100 basis points (including any amount of servicing in excess of
reasonable servicing) is stripped off the Contract. Certificateholders are
encouraged to consult their tax advisors concerning the application of the
original issue discount rules to Stripped Certificates.
Disposition of Certificates. If a Certificate is sold, gain or loss will be
recognized equal to the difference between the amount realized on the sale and
the Certificateholder's adjusted tax basis in the Certificate. See the
discussion above under "OWNER TRUST SERIES--Tax Consequences to Noteholders--
Disposition of Notes."
Foreign Holders. Generally, interest paid to a Certificateholder who is a
nonresident alien individual or a foreign corporation and who does not hold
the Certificates in connection with a United States trade or business will be
treated as "portfolio interest." See the discussion above under "OWNER TRUST
SERIES--Tax Consequences to Noteholders--Foreign Holders."
47
<PAGE>
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. In addition, the Trustee will furnish, within a reasonable
time after the end of each calendar year, to each Certificateholder who was a
Certificateholder at any time during such year, information regarding the
amount of servicing compensation received by the Servicer and such other
factual information as the Seller deems necessary to enable Certificateholders
to prepare their tax returns. Reports will be made annually to the Internal
Revenue 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. See the discussion above under "OWNER TRUST
SERIES--Tax Consequences to Noteholders--Backup Withholding."
ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit a pension, profit
sharing or other employee benefit plan from engaging in certain transactions
involving "plan assets" with persons that are "parties in interest" under
ERISA or "disqualified persons" under the Code with respect to the plan. ERISA
also imposes certain duties and certain prohibitions on persons who are
fiduciaries of plans subject to ERISA. Under ERISA, generally any person who
exercises any authority or control with respect to the management or
disposition of the assets of a plan is considered to be a fiduciary of such
plan. A violation of these "prohibited transaction" rules may generate excise
tax and other liabilities under ERISA and the Code for such persons.
Certain transactions involving the related Trust might be deemed to
constitute prohibited transactions under ERISA and the Code with respect to a
Benefit Plan that purchased Securities if assets of the related Trust were
deemed to be assets of the Benefit Plan. Under a regulation issued by the
United States Department of Labor (the "Plan Assets Regulation"), the assets
of a Trust would be treated as plan assets of a Benefit Plan for the purposes
of ERISA and the Code only if the Benefit Plan acquired an "equity interest"
in the Trust and none of the exceptions contained in the Plan Assets
Regulation was applicable. An equity interest is defined under the Plan Assets
Regulation as an interest other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features. The likely treatment of Notes and Certificates will be discussed in
the related Prospectus Supplement.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of
ERISA) are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Securities should consult its
tax and/or legal advisors regarding whether the assets of the Trust would be
considered plan assets, the possibility of exemptive relief from the
prohibited transaction rules and other issues and their potential
consequences.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement (the
"Underwriting Agreement") with respect to each Trust, the Seller will agree to
sell to each of the underwriters named therein and in the related Prospectus
Supplement, and each of such underwriters will severally agree to purchase
from the Seller, the principal amount of each class of Securities of the
related series set forth therein and in the related Prospectus Supplement.
In each Underwriting Agreement, the several underwriters will agree, subject
to the terms and conditions set forth therein, to purchase all the Securities
described therein which are offered hereby and by the related Prospectus
Supplement if any of such Securities are purchased. In the event of a default
by any such underwriter,
48
<PAGE>
each Underwriting Agreement will provide that, in certain circumstances,
purchase commitments of the nondefaulting underwriters may be increased, or
the Underwriting Agreement may be terminated.
Each Prospectus Supplement will either (i) set forth the price at which each
class of Securities being offered thereby will be offered to the public and
any concessions that may be offered to certain dealers participating in the
offering of such Securities or (ii) specify that the related Securities are to
be resold by the underwriters in negotiated transactions at varying prices to
be determined at the time of such sale. After the initial public offering of
any Securities, the public offering price and such concessions may be changed.
Each Underwriting Agreement will provide that Green Tree will indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act.
The Indenture Trustee, if any, may, from time to time, invest the funds in
the Designated Accounts in Eligible Investments acquired from the
underwriters.
Under each Underwriting Agreement, the closing of the sale of any class of
Securities subject thereto will be conditioned on the closing of the sale of
all other such classes.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the related Prospectus
Supplement.
LEGAL MATTERS
Certain matters with respect to the validity of the Certificates and the
Notes will be passed upon for the Seller by Dorsey & Whitney P.L.L.P.,
Minneapolis, Minnesota. The validity of the Certificates and the Notes will be
passed upon for the underwriters named in the related Prospectus Supplement by
Brown & Wood, New York, New York.
49
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred in connection
with the offering of the Asset-Backed Certificates and the Asset-Backed Notes,
other than underwriting discounts and commissions, described in this
Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $137,931.04
Printing and Engraving..........................................
Legal Fees and Expenses.........................................
Blue Sky Filing and Counsel Fees................................
Accounting Fees and Expenses....................................
Trustee Fees and Expenses.......................................
Rating Agencies' Fees...........................................
Miscellaneous Expenses..........................................
-----------
Total....................................................... $
===========
</TABLE>
- --------
* All fees and expenses, other than the Securities and Exchange Commission
Registration Fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Green Tree Financial Corporation 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 proceedings,
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 identify 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 Green Tree Financial
Corporation 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.
ITEM 16. EXHIBITS.
The Exhibits filed as part of this Registration Statement are:
<TABLE>
<C> <S>
1.1 --Form of Underwriting Agreement.
3.1 --Certificate of Incorporation of Green Tree (incorporated by reference
to Exhibit 3.1 to the registrant's Registration Statement No. .
3.2 --By-Laws of Green Tree (incorporated by reference to Exhibit 3.2 to
the registrant's Registration Statement No. .
4.1 --Form of Pooling and Servicing Agreement between Green Tree, as Seller
and as Servicer, and the Owner Trustee (for Grantor Trusts).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
4.2 --Form of Sale and Servicing Agreement relating to Owner Trusts.
4.3 --Form of Trust Agreement relating to Owner Trusts.
4.4 --Form of Indenture between the Trust and the Indenture Trustee,
including form of Note.
*5.1 --Opinion and consent of Dorsey & Whitney with respect to legality.
*8.1 --Opinion and consent of Dorsey & Whitney with respect to tax matters.
*23.1 --Consent of Dorsey & Whitney (included as part of Exhibit 5.1).
*23.2 --Consent of Dorsey & Whitney (included as part of Exhibit 8.1).
*23.3 --Consent of KPMG Peat Marwick.
*25.1 --Form of T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Indenture Trustee.
**99.1 --Form of Prospectus Supplement for Grantor Trusts.
**99.2 --Form of Prospectus Supplement for Owner Trusts.
</TABLE>
- --------
*To be filed by amendment.
**Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant on behalf of the Trust hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933,
each filing of the Owner Trust's annual report pursuant to section 13(a) or
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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change to such information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change in the information set forth in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under section 305(b)(2) of the Trust
Indenture Act.
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
THE 30TH DAY OF NOVEMBER, 1995.
Green Tree Financial Corporation
/s/ John W. Brink
By __________________________________
JOHN W. BRINK
Executive Vice President,
Treasurer and Chief Financial
Officer
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.
SIGNATURE TITLE DATE
* Chairman of the
- ------------------------------------- Board and Chief November 30,
LAWRENCE M. COSS Executive Officer 1995
(Principal
Executive Officer
and Director)
/s/ John W. Brink Executive Vice
- ------------------------------------- President, November 30,
JOHN W. BRINK Treasurer and Chief 1995
Financial Officer
(Principal
Financial Officer)
* Vice President and
- ------------------------------------- Controller November 30,
ROBLEY D. EVANS (Principal 1995
Accounting Officer)
* Director
- ------------------------------------- November 30,
RICHARD G. EVANS 1995
Director
- -------------------------------------
W. MAX MCGEE
Director
- -------------------------------------
TANIA A. MODIC
* Director
- ------------------------------------- November 30,
ROBERT S. NICKOLOFF 1995
* Director
- ------------------------------------- November 30,
ROBERT D. POTTS 1995
/s/ John W. Brink
*By _________________________________
JOHN W. BRINK
as Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
*1.1 --Form of Underwriting Agreement.
3.1 --Certificate of Incorporation of Green Tree (incorporated by
reference to Exhibit 3.1 to the registrant's Registration
Statement No. .
3.2 --By-Laws of Green Tree (incorporated by reference to Exhibit
3.2 to the registrant's Registration Statement No. .
4.1 --Form of Pooling and Servicing Agreement between Green Tree, as
Seller and as Servicer, and the Owner Trustee.
4.2 --Form of Sale and Servicing Agreement relating to Trusts
including Pre-Funding Accounts or issuing Notes.
4.3 --Form of Trust Agreement relating to Trusts including Pre-
Funding Accounts or issuing Notes.
4.4 --Form of Indenture between the Trust and the Indenture Trustee,
including form of Note.
*5.1 --Opinion and consent of Dorsey & Whitney with respect to
legality.
*8.1 --Opinion and consent of Dorsey & Whitney with respect to tax
matters.
*23.1 --Consent of Dorsey & Whitney (included as part of Exhibit 5.1).
*23.2 --Consent of Dorsey & Whitney (included as part of Exhibit 8.1).
*23.3 --Consent of KPMG Peat Marwick.
*25.1 --Form of T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of the Indenture Trustee.
**99.1 --Form of Prospectus Supplement for Grantor Trusts.
**99.2 --Form of Prospectus Supplement for Trusts including Pre-Funding
Accounts or issuing Notes.
</TABLE>
- --------
*To be filed by amendment.
**Previously filed.
<PAGE>
EXHIBIT 4.1
================================================================================
____% ASSET-BACKED CERTIFICATES
POOLING AND SERVICING AGREEMENT
between
GREEN TREE FINANCIAL CORPORATION
Seller and Servicer
and
--------------------------------
not in its individual capacity but solely as Owner Trustee of
GREEN TREE ASSET RECEIVABLES TRUST 199_-_
Dated as of ________ 1, 199_
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I
DEFINITIONS
SECTION 1.01. General................................................ 1-1
SECTION 1.02. Specific Terms......................................... 1-1
ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS.............................. 2-1
SECTION 2.01. Closing................................................ 2-1
SECTION 2.02. Conditions to the Closing.............................. 2-1
SECTION 2.03. Acceptance by Trustee.................................. 2-3
SECTION 2.04. Grantor Trust Provisions............................... 2-3
ARTICLE III
REPRESENTATIONS AND WARRANTIES............................................. 3-1
SECTION 3.01. Representations and Warranties Regarding the
Company................................................ 3-1
SECTION 3.02. Representations and Warranties Regarding Each
Contract............................................... 3-2
SECTION 3.03. Representations and Warranties Regarding the
Contracts in the Aggregate............................. 3-4
SECTION 3.04. Representations and Warranties Regarding the
Contract Files......................................... 3-5
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS................ 4-1
SECTION 4.01. Custody of Contracts................................... 4-1
SECTION 4.02. Filing................................................. 4-2
SECTION 4.03. Name Change or Relocation.............................. 4-2
SECTION 4.04. Chief Executive Office................................. 4-2
SECTION 4.05. Costs and Expenses..................................... 4-3
ARTICLE V
SERVICING OF CONTRACTS..................................................... 5-1
SECTION 5.01. Responsibility for Contract Administration............. 5-1
SECTION 5.02. Standard of Care....................................... 5-1
SECTION 5.03. Records................................................ 5-1
SECTION 5.04. Inspection............................................. 5-1
SECTION 5.05. Collection Account..................................... 5-2
SECTION 5.06. Enforcement............................................ 5-3
SECTION 5.07. Trustee to Cooperate................................... 5-4
SECTION 5.08. Costs and Expenses..................................... 5-5
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 5.09. Maintenance of Insurance............................... 5-5
ARTICLE VI
REPORTS.................................................................... 6-1
SECTION 6.01. Monthly Reports........................................ 6-1
SECTION 6.02. Officer's Certificate.................................. 6-3
SECTION 6.03. Other Data............................................. 6-3
SECTION 6.04. Annual Report of Accountants........................... 6-3
SECTION 6.05. Statements to Certificateholders....................... 6-3
SECTION 6.06. Payment of Taxes....................................... 6-4
ARTICLE VII
SERVICE TRANSFER........................................................... 7-1
SECTION 7.01. Events of Termination.................................. 7-1
SECTION 7.02. Transfer............................................... 7-2
SECTION 7.03. Trustee to Act; Appointment of Successor............... 7-3
SECTION 7.04. Notification to Certificateholders..................... 7-3
SECTION 7.05. Effect of Transfer..................................... 7-4
SECTION 7.06. Transfer of Collection Account......................... 7-4
ARTICLE VIII
PAYMENTS AND CASH COLLATERAL ACCOUNT....................................... 8-1
SECTION 8.01. Monthly Payments....................................... 8-1
SECTION 8.02. Fees................................................... 8-1
SECTION 8.03. Voluntary Advances..................................... 8-1
SECTION 8.04. Payments............................................... 8-2
SECTION 8.05. Repurchases of Contracts for Breach of Representations
and Warranties......................................... 8-3
SECTION 8.06. Reassignment of Repurchased Contracts.................. 8-3
SECTION 8.07. Company's Repurchase Option............................ 8-3
ARTICLE IX
THE CERTIFICATES........................................................... 9-1
SECTION 9.01. The Certificates....................................... 9-1
SECTION 9.02. Registration of Transfer and Exchange of Certificates.. 9-1
SECTION 9.03. No Charge; Disposition of Void Certificates............ 9-2
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates...... 9-2
SECTION 9.05. Persons Deemed Owners.................................. 9-2
SECTION 9.06. Access to List of Certificateholders' Names and
Addresses.............................................. 9-3
SECTION 9.07. Authenticating Agents.................................. 9-3
SECTION 9.08. Presentation of Certificates Upon Maturity............. 9-3
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE X
INDEMNITIES................................................................ 10-1
SECTION 10.01. Product Liability...................................... 10-1
SECTION 10.02. Liabilities to Obligors................................ 10-1
SECTION 10.03. Tax Indemnification.................................... 10-1
SECTION 10.04. Servicer's Indemnities................................. 10-1
SECTION 10.05. Operation of Indemnities............................... 10-2
ARTICLE XI
THE TRUSTEE................................................................ 11-1
SECTION 11.01. Duties of Trustee...................................... 11-1
SECTION 11.02. Certain Matters Affecting the Trustee.................. 11-2
SECTION 11.03. Trustee Not Liable for Certificates or Contracts....... 11-3
SECTION 11.04. Trustee May Own Certificates........................... 11-4
SECTION 11.05. Rights of Certificateholders to Direct Trustee and to
Waive Events of Termination............................ 11-4
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses........ 11-4
SECTION 11.07. Eligibility Requirements for Trustee................... 11-5
SECTION 11.08. Resignation or Removal of Trustee...................... 11-5
SECTION 11.09. Successor Trustee...................................... 11-6
SECTION 11.10. Merger or Consolidation of Trustee..................... 11-7
SECTION 11.11. Tax Returns............................................ 11-7
SECTION 11.12. Obligor Claims......................................... 11-7
SECTION 11.13. Appointment of Co-Trustee or Separate Trustee.......... 11-8
ARTICLE XII
MISCELLANEOUS.............................................................. 12-1
SECTION 12.01. Servicer Not to Resign................................. 12-1
SECTION 12.02. Company Not to Engage in Certain Transactions with
Respect to the Trust................................... 12-1
SECTION 12.03. Maintenance of Office or Agency........................ 12-1
SECTION 12.04. Termination............................................ 12-1
SECTION 12.05. Acts of Certificateholders............................. 12-2
SECTION 12.06. Calculations........................................... 12-3
SECTION 12.08. Amendment.............................................. 12-3
SECTION 12.09. Notices................................................ 12-4
SECTION 12.10. Merger and Integration................................. 12-5
SECTION 12.11. Headings............................................... 12-5
SECTION 12.12. Governing Law.......................................... 12-6
EXHIBIT A
CERTIFICATE FOR _____% ASSET BACKED CERTIFICATES........................... A-1
EXHIBIT B
FORM OF ASSIGNMENT......................................................... B-1
</TABLE>
<PAGE>
<TABLE>
<S> <C>
EXHIBIT C
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE OF OFFICER..................................................... C-1
EXHIBIT D
FORM OF OPINION OF COUNSEL
FOR THE COMPANY............................................................ D-1
EXHIBIT E
FORM OF TRUSTEE'S ACKNOWLEDGMENT........................................... E-1
EXHIBIT F
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE OF SERVICING OFFICER........................................... F-1
EXHIBIT G
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE REGARDING REPURCHASED CONTRACTS................................ G-1
</TABLE>
<PAGE>
AGREEMENT, dated as of ______________, 199_, between Green Tree
Financial Corporation, a corporation organized and existing under the laws of
the State of Minnesota, as Seller and Servicer (the "Company"), and
_________________________, a _________, not in its individual capacity but
solely as Owner Trustee (the "Trustee") of Green Tree Asset Receivables Trust
199_-_ (the "Trust").
WHEREAS, in the regular course of its business, the Company purchases
and services retail installment sales contracts and promissory notes for the
purchase of a variety of consumer products, including but not limited to
motorcycles; marine products (including boats, boat trailers and outboard
motors); pianos and organs; horse trailers; sport vehicles (including
snowmobiles, personal watercraft and all-terrain vehicles); trucks; personal
aircraft; and recreational vehicles (collectively, the "Products"), each of
which contracts provide for installment payments by or on behalf of the
purchaser and grant a lien on or security interest in a Product; and
WHEREAS, the Company and the Trustee wish to set forth the terms and
conditions pursuant to which the Trust and the "Certificateholders," as
hereinafter defined, will acquire the "Contracts," as hereinafter defined, and
the Company will manage and service them;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Company and the Trustee agree as provided
herein:
-i-
<PAGE>
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. General.
For the purpose of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Article include the plural as well as the singular, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular article, section or other subdivision, and
Section references refer to Sections of the Agreement.
SECTION 1.02. Specific Terms.
"Advance Payment" means any payment by an Obligor in advance of the
Due Period in which it would be due under such Contract and which payment is not
a Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Agreement" means this Pooling and Servicing Agreement.
"Applicants" has the meaning assigned in Section 9.06.
"Authenticating Agent" means any authenticating agent appointed
pursuant to Section 9.07.
"Available Funds" has the meaning assigned in Section 8.05(a).
"Average Delinquency Ratio" as of any Payment Date means the
arithmetic average of the Delinquency Ratios for that Payment Date and the two
immediately preceding Payment Dates.
"Business Day" means any day other than (a) a Saturday or a Sunday, or
(b) another day on which banking institutions in the city in which the Person
taking action hereunder are authorized or obligated by law, executive order, or
governmental decree to be closed.
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"Certificate" means an Asset-Backed Certificate evidencing a
Fractional Interest executed and delivered by the Trustee substantially in the
form of Exhibit A.
"Certificate Register" means the register maintained pursuant to
Section 9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.
"Certificateholder" means the person in whose name a Certificate is
registered on the Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request or demand pursuant to this Agreement, any
Certificate registered in the name of the Company or any Affiliate shall be
deemed not to be outstanding and the Fractional Interest evidenced thereby shall
not be taken into account in determining whether the requisite Fractional
Interest necessary to effect any such consent, request, waiver or demand has
been obtained; provided, however, that in determining whether the Trustee shall
be protected in relying upon any such consent, waiver, request or demand only
Certificates which the Trustee knows to be so owned shall be so disregarded.
"Closing Date" means __________, 199_.
"Collection Account" means a trust account maintained in the name of
the Trust in an Eligible Institution.
"Computer Tape" means the computer tape generated by the Company which
provides information relating to the Contracts and which was used by the Company
in selecting the Contracts, and includes the master file and the history file.
"Contract File" means, as to each Contract, (a) the original copy of
the Contract, including the executed promissory note or other evidence of the
obligation of the Obligor, (b) if certificates of tile or similar documents are
issued with respect to goods of the class to which the relevant Product belongs,
the original title certificate to the Product, or, if such title has not yet
been issued, an application for such title, or other appropriate evidence of a
security interest in the covered Product; (c) if certificates of title are not
issued with respect to goods of the class to which the relevant Product belongs,
a copy of all recorded financing statements or other appropriate evidence of a
security interest in the covered Product; (d) the assignments of the Contract;
(e) any extension agreement(s); (f) a credit application signed by the Obligor,
or a copy thereof, and (g) a certificate of insurance or application form for
insurance signed by the Obligor, or copies thereof.
"Contract Rate" means, as to any Contract, the annual rate of interest
specified in the Contract.
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"Contracts" means the retain installment sales contracts and
promissory notes described in the List of Contracts and constituting part of the
corpus of the Trust, which Contracts are to be assigned and conveyed by the
Company to the Trust, and includes, without limitation, all related security
interests and any and all rights to receive payments which are due pursuant
thereto on or after the Cutoff Date, but excluding any rights to receive
payments which are due pursuant thereto prior to the Cutoff Date.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Agreement is
located at the address set forth in Section 12.09.
"Counsel for the Company" means Dorsey & Whitney or other legal
counsel for the Company.
"Cumulative Loss Ratio" as of any Quarterly Release Date means the
fraction (expressed as a percentage) computed by dividing the aggregate Net
Liquidation Losses since the Cutoff Date through the end of the immediately
preceding Due Period by the difference between the Initial Principal Amount and
the aggregate of the outstanding principal balances of all Contracts as of the
end of the immediately preceding Due Period.
"Cutoff Date" means ______________, 199_.
"Delinquency Amount" as of any Payment Date means the aggregate of the
outstanding balances of all Contracts that were delinquent 60 days or more as of
the end of the immediately preceding Due Period (including Contracts in respect
of which the related Products have been repossessed and are still in inventory).
"Delinquent Payment" means, as to any Contract, with respect to any
Due Period, any payment or portion of a payment of principal or interest that
was originally scheduled to be made during such Due Period under such Contract
and was not received or applied during such Due Period, whether or not any
payment extension has been granted by the Servicer.
"Delinquency Ratio" as of any Payment Date means the fraction
(expressed as a percentage) computed by dividing the Delinquency Amount by the
aggregate of the outstanding principal balances of all Contracts as of the end
of the immediately preceding Due Period.
"Determination Date" means the seventh Business Day following a Due
Period during the term of this Agreement.
"Due Period" means a calendar month during the term of this Agreement.
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"Electronic Ledger" means the electronic master record of retail sales
loan contracts and promissory notes of the Company.
"Eligible Institution" means any depository institution (which may be
the Trustee or an Affiliate of the Trustee) organized under the laws of the
United States or any State, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation, which is subject
to supervision and examination by Federal or State authorities and whose
unsecured short-term debt has been rated P-1 or higher by Moody's.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Company or a Person qualified to act as
servicer of the Contracts under applicable Federal and State laws and
regulations, which services not less than $10,000,000 in outstanding principal
amount of retail installment sales contracts and which is acceptable to the
Certificateholders with aggregate Fractional Interests representing more than
50% of the Trust, which approval shall not be unreasonably withheld.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, all as such policy
relates to Contracts comprising a portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Extension Fee" means any extension fee paid by the Obligor on a
Contract.
"Fractional Interest" means an undivided interest in the Trust and, as
to a particular Certificateholder, means the undivided interest in the Trust
owned by that Certificateholder.
"Initial Certificateholder" means a Certificateholder purchasing a
certificate from the Company on the Closing Date.
"Initial Principal Amount" means $__________ which is the aggregate
unpaid principal balance of the Contracts as of the Cutoff Date.
"Late Payment Fees" means any late payment fees paid by Obligors on
Contracts after all sums received have been allocated first to regular
installments due or overdue and all such installments are then paid in full.
"Liquidated Contract" means any defaulted Contract as to which the
Servicer has determined that all amounts which it expects to recover from or on
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account of such Contract have been recovered; provided that any defaulted
Contract in respect of which the related Product has been realized upon and
disposed of and the proceeds of such disposition have been realized shall be
deemed to be a Liquidated Contract.
"List of Contracts" means the list identifying each Contract
constituting part of the corpus of the Trust, which list (a) identifies each
Contract and (b) sets forth as to each Contract (i) the unpaid principal balance
as of the Cutoff Date, (ii) the amount of monthly payments due from the Obligor,
(iii) the Contract Rate and (iv) the maturity date, and which is attached to
this Agreement as Exhibit H.
"Monthly Interest" means, as of any Payment Date, the product of the
Pass-Through Rate times the Principal Balance immediately following the
preceding Payment Date, based on a 360-day year consisting of 12 months of 30
days each.
"Monthly Principal" means, as of any Payment Date, the amount
determined pursuant to Section 6.01(a).
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Payment Date, (a) one-twelfth
of the product of 1% and the remaining Principal Balance plus (b) all income and
gain from investments on amounts in the Collection Account invested pursuant to
Section 5.05 to the extent not applied to amounts paid pursuant to Section
8.05(b)(i), (ii) or (iii).
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"Net Liquidation Losses" means, with respect to a Liquidated Contract,
the amount, if any, by which (a) the outstanding principal balance of such
Liquidated Contract plus accrued and unpaid interest thereon to the date on
which such Liquidated Contract became a Liquidated Contract exceeds (b) the Net
Liquidation Proceeds for such Liquidated Contract.
"Net Liquidation Proceeds" means, as to any Liquidated Contract, the
proceeds realized on the sale or other disposition of the related Product,
including proceeds realized on the repurchase of such Product by the originating
dealer for breach of warranties, and the proceeds of any insurance relating to
such Product, after payment of all expenses incurred thereby, together, in all
instances, with the expected or actual proceeds of any recourse rights relating
to such Contract.
"Obligor" means a Product buyer or other person who owes payments
under a Contract.
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"Officer's Certificate" means a certificate signed by the Chairman of
the Board, President or any Vice President of the Company and delivered to the
Trustee.
"Pass-Through Rate" means _____% per annum.
"Paying Agent" has the meaning assigned in Section 8.01(b).
"Payment Date" means the fifteenth day of each calendar month during
the term of this Agreement, or if such day is not a Business Day, the next
succeeding Business Day, commencing _________ 15, 199_.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Factor" means, at any time, the percentage derived from a
fraction, the numerator of which is the Principal Balance at such time and the
denominator of which is the Initial Principal Amount.
"Principal Balance" means, at any time, the Initial Principal Amount
minus all payments of Monthly Principal made to the Certificateholders since the
Closing Date.
"Principal Prepayment" means a payment or other recovery of principal
on a Contract which is received in advance of its scheduled due date and applied
upon receipt (or, in the case of a partial prepayment, upon the next scheduled
payment date on such Contract) to reduce the outstanding principal amount due on
such Contract prior to the date or dates on which such principal amount is due.
"Product" means motorcycles; marine products (including boats, boat
trailers and outboard motors); pianos and organs; horse trailers; sport vehicles
(including snowmobiles, personal watercraft and all-terrain vehicles); trucks;
personal aircraft; and recreational vehicles.
"Quarterly Loss Ratio" as of any Quarterly Release Date means the
fraction (expressed as a percentage) computed by dividing the Net Liquidation
Losses for all Contracts that became Liquidated Contracts during the three
immediately preceding Due Periods by the difference between the aggregate of the
outstanding principal balances of all Contracts as of the end of the immediately
preceding Due Period and the aggregate of the outstanding principal balances of
all Contracts as of the end of the Due Period immediately prior to the previous
Quarterly Release Date.
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"Quarterly Release Date" means each Payment Date occurring in
________, ________, ________ and ________ of each year, commencing ________ 15,
199_.
"Record Date" means the last Business Day immediately preceding any
Payment Date.
"Repurchase Price" means, with respect to a Contract to be repurchased
hereunder, an amount equal to (a) the remaining principal amount outstanding on
such Contract, plus (b) interest at the Pass-Through Rate on such Contract from
the end of the Due Period with respect to which the Obligor last made a payment
through the end of the immediately preceding Due Period.
"Responsible Officer" means, with respect to the Trustee, the chairman
and any vice chairman of the board of directors, the president, the chairman and
vice chairman of any executive committee of the board of directors, every vice
president, assistant vice president, the secretary, every assistant secretary,
cashier or any assistant cashier, controller or assistant controller, the
treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicer" means the Company until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Servicing Fee" means (a) the Monthly Servicing Fee, (b) Late Payment
Fees, (c) Extension Fees, and (d) any amounts which the Company is entitled to
retain pursuant to Section 12.04.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Company, as the same may be amended from time to
time.
"Shortfall" has the meaning assigned in Section 8.04.
A "Trigger Event" shall be deemed to have occurred (i) on any Payment
Date on which the Average Delinquency Ratio is greater than 2.5%, or (ii) on any
Quarterly Release Date on which the Cumulative Loss Ratio exceeds 2.5%, or (iii)
on any Quarterly Release Date on which the Quarterly Loss Ratio exceeds 4.0%.
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"Trust" means the trust created by this Agreement, the corpus of which
consists of all the rights, benefits, and obligations arising from and in
connection with each Contract, including any liquidation proceeds therefrom, all
rights under any hazard or other individual insurance policy on a Product
securing a Contract for the benefit of the creditor of such Contract, all
security interests in each Product, and rights under the Errors and Omissions
Protection Policy, benefits under the Guarantee Agreement, and the remittances,
deposits and payments made into the Collection Account and amounts in the
Collection Account (including all proceeds of investments thereof), as provided
herein.
"Trustee's Fee" means the amount to be paid to the Trustee on any
Payment Date pursuant to Section 11.06(a).
"Uncollectible Advance" means, with respect to any Determination Date,
the amount, if any, advanced by the Servicer pursuant to Section 8.03 which the
Servicer has now determined in good faith will not be ultimately recoverable by
the Servicer from insurance policies on the Product, the Obligor or out of Net
Liquidation Proceeds. The determination by the Servicer that it has made an
Uncollectible Advance shall be evidenced by an Officer's Certificate delivered
to the Trustee.
"Voluntary Advance" means, with respect to any Payment Date, the
amounts, if any, deposited by the Servicer in the Collection Account for such
Payment Date pursuant to Section 8.03.
"Weighted Average Contractual Rate of Interest" of the Contracts
means, as of any Payment Date, the percentage obtained by multiplying (a) the
contractual rate of interest of each Contract by (b) the remaining unpaid
principal balance of such Contract, adding the results, and dividing the sum by
the aggregate principal balance of the Contracts.
"Weighted Average Remaining Maturity" of the Contracts means, as of
any Payment Date, the number (expressed in months) obtained by multiplying (a)
the remaining term to scheduled maturity of each Contract (expressed in months)
by (b) the remaining unpaid principal balance of such Contract, adding the
results, and dividing the sum by the aggregate principal balance of the
Contracts.
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ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
---------------------------------------------
SECTION 2.01. Closing.
a. On the Closing Date there shall be created, by the Company, as
settlor, a separate trust which shall be known as the Green Tree Asset
Receivables Trust 199_-_. The Trust shall be administered pursuant to the
provisions of this Agreement for the benefit of the Certificateholders. The
Trustee is hereby specifically empowered to conduct any business dealings with
the Company on behalf of the Trust.
b. On the Closing Date, the Company shall transfer, assign, set over
and otherwise convey to the Trust by execution of an assignment substantially in
the form of Exhibit B hereto (i) all the right, title and interest of the
Company in and to the Contracts, all interest and principal received by the
Company on or with respect to the Contracts, including any liquidation proceeds
therefrom (other than principal and interest due on the Contracts before the
Cutoff Date), (ii) all rights under all hazard and other individual insurance
policies on every Product securing a Contract for the benefit of the creditor of
such Contract, (iii) all rights under the Errors and Omissions Protection Policy
as such policy relates to the Contracts, (iv) all documents contained in the
Contract Files, and (v) all proceeds and products of the foregoing. Although
the Company and the Trustee agree that such transfer is intended to be a sale,
rather than a pledge, of all of the Company's right, title and interest in such
items (i) through (v) above, in the event such transfer is deemed to be a pledge
to secure indebtedness, the Company shall be deemed to have granted the Trustee
a perfected first priority security interest in such items.
SECTION 2.02. Conditions to the Closing.
On or before the Closing Date, the Company shall deliver or cause to
be delivered the following documents to the Trustee:
a. The List of Contracts, certified by the Chairman of the Board,
President or any Vice President of the Company.
b. A certificate of an officer of the Company substantially in the
form of Exhibit C hereto.
c. An opinion of Counsel for the Company substantially in the form of
Exhibit D hereto.
d. A letter from ______________________, or another nationally
recognized accounting firm, stating that such firm has reviewed the Contracts on
a statistical sampling basis and, based on such sampling, concluding that the
Contracts
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conform in all material respects to the List of Contracts, to a confidence level
of 97.5%, with an error rate of 1.8%, specifying those Contracts which do not so
conform.
e. Copies of resolutions of the board of directors of the Company or
of the executive committee of the board of directors of the Company approving
the execution, delivery and performance of this Agreement and the transactions
contemplated hereunder, certified in each case by the secretary or an assistant
secretary of the Company.
f. Officially certified recent evidence of due incorporation and good
standing of the Company under the laws of Minnesota.
g. Evidence of filing with the appropriate office in Minnesota of a
UCC-1 financing statement executed by the Company as debtor, naming the Trust as
secured party and listing the Contracts as collateral.
h. An Officer's Certificate listing the Servicer's Servicing
Officers.
i. Evidence of continued coverage of the Company under the Errors and
Omissions Protection Policy.
j. Evidence of deposit in the Collection Account of all funds
received with respect to the Contracts from the Cutoff Date to the Closing Date,
other than amounts due before the Cutoff Date, together with an Officer's
Certificate to the effect that such amount is correct.
k. An Officer's Certificate confirming that the Company's internal
audit department has reviewed the original or a copy of each Contract and each
Contract File, that each Contract and Contract File conforms in all material
respects with the List of Contracts and each Contract File is complete, that the
face of each original Contract has been stamped with a notation that the
Contract has been assigned to the Trustee, and that each Product securing a
Contract is covered by insurance as required by Section 3.02(f), specifying the
expiration date of the insurance policy with respect to each Contract.
l. A fully executed copy of the Guarantee Agreement together with
evidence of deposit in the Cash Collateral Account of $________ by the Depositor
in accordance with the terms of the Guarantee Agreement.
m. Evidence of filing with the appropriate office in Minnesota of a
UCC-1 financing statement executed by the Depositor as debtor, naming the Trust
as secured party and listing the Cash Collateral Account, including the
investments and proceeds therein, and the Guarantee Fee up to the Requisite
Amount as collateral.
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n. Copies of resolutions of the Board of Directors of the Depositor
approving the execution, delivery and performance of the Guarantee Agreement and
the transactions contemplated thereunder, certified in each case by an officer
of the Depositor.
o. Officially certified recent evidence of due incorporation and good
standing of the Depositor under the laws of Minnesota.
SECTION 2.03. Acceptance by Trustee.
On the Closing Date, if the conditions set forth in Section 2.02 have
been satisfied, the Trustee shall deliver a certificate to the Company
substantially in the form of Exhibit E hereto acknowledging conveyance of the
Contracts and Contract Files to the Trustee and declaring that the Trustee,
through the Servicer, as agent for the Trustee and custodian, pursuant to
Section 4.01, will hold all Contracts that have been delivered in trust, upon
the trusts herein set forth, for the use and benefit of all Certificateholders,
and shall issue to or upon the order of the Company Certificates representing
ownership of a beneficial interest in 100% of the Trust.
SECTION 2.04. Grantor Trust Provisions.
The Company, as Servicer, the Trustee and the Certificateholders, by
acceptance of the Certificates, each agree that the Trust is intended to be
treated as a Grantor Trust for federal income tax purposes. In furtherance of
the foregoing, the Trustee (at the direction of the Company or the Servicer),
the Company and the Servicer shall take, or refrain from taking, all such action
as is necessary to maintain the status of the Trust as a Grantor Trust. After
the Closing Date, neither the Trustee, the Company nor any Servicer shall (i)
accept any contribution of assets to the Trust other than advances pursuant to
Section 8.02, (ii) dispose of any portion of the Trust other than as provided in
Sections 3.05 and 8.06, or (iii) engage in any activity which would, directly or
indirectly, adversely affect the status of the Trust as a Grantor Trust.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company makes the following representations and warranties, on
which the Trustee will rely in accepting the Contracts in trust and issuing the
Certificates on behalf of the Trust. The repurchase obligation of the Company
set forth in Section 8.06 constitutes the sole remedy available to the Trust or
Certificateholders for a breach of a representation or warranty of the Company
set forth in Section 3.02 or 3.03 of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Company.
The Company represents and warrants that:
a. Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Company or the
Trust.
b. Authorization; Binding Obligations. The Company has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and to create the Trust and cause
it to make, execute, deliver and perform its obligations under the Agreement and
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement and to cause the Trust to be created. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
c. No Consent Required. The Company is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.
d. No Violations. The execution, delivery and performance of this
Agreement by the Company will not violate any provision of any existing law or
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regulation or any order or decree of any court or the Articles of Incorporation
or Bylaws of the Company, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Company is a party or by
which the Company may be bound.
e. Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Company have a material
adverse effect on the transactions contemplated by this Agreement.
SECTION 3.02. Representations and Warranties Regarding Each Contract.
The Company represents and warrants as to each Contract:
a. List of Contracts. The information set forth in the List of
Contracts is true and correct as of its date.
b. Payments. As of the Cutoff Date, the most recent scheduled
payment was made or was not delinquent for more than 59 days. To the best of
the Company's knowledge, all payments on the Contract were made by the Obligor.
c. No Waivers. The terms of the Contract have not been waived,
altered or modified in any respect, except by instruments or documents
identified in the Contract File.
d. Binding Obligation. The Contract is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally.
e. No Defenses. The Contract is not subject to any right of
rescission, setoff, counterclaim or defense, including the defense of usury, and
the operation of any of the terms of the Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
f. Insurance. The Product securing the Contract is covered by
physical damage insurance (i) in an amount not less than the unpaid principal
balance under the Contract, (ii) naming the Company as a loss payee and (iii)
insuring against loss and damage due to fire, theft, transportation, collision
and other risks covered by
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comprehensive coverage. All premiums now due on such insurance have been paid
in full.
g. Origination. The Contract was originated by a dealer of goods of
the class including the Product in the regular course of such dealer's business
and purchased by the Company in the regular course of its business.
h. Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract under this Agreement or pursuant to transfers of Certificates
unlawful.
i. Compliance with Law. All requirements of any federal, state or
local law, including, without limitation, usury, truth in lending, installment
loan and equal credit opportunity laws, applicable to the Contract have been
complied with, and the Company shall, for at least the period of this Agreement,
maintain in its possession, available for the Trustee's inspection, and shall
deliver to the Trustee upon demand, evidence of compliance with all such
requirements.
j. Contract in Force. The Contract has not been satisfied or
subordinated in whole or in part or rescinded, and the Product securing the
Contract has not been released from the lien of the Contract in whole or in
part.
k. Valid Security Interest. The Contract creates a valid, subsisting
and enforceable first priority perfected security interest in favor of the
Company in the Product covered thereby, and such security interest has been
assigned by the Company to the Trust.
l. Capacity of Parties. All parties to the Contract had capacity to
execute the Contract.
m. Good Title. The Contract was purchased by the Company for value
and taken into possession prior to the Cutoff Date in the ordinary course of its
business, without knowledge that the Contract was subject to a security
interest. The Contract has not been sold, assigned or pledged to any other
person, and the Company has good and marketable title thereto free and clear of
any encumbrance, equity, loan, pledge, charge, claim or security interest and is
the sole owner thereof and has full right to transfer the Contract to the Trust
and as of the Closing Date the Trustee will have a first priority perfected
security interest therein.
n. No Defaults. As of the Cutoff Date, there was no default, breach,
violation or event permitting acceleration existing under the Contract and no
event which, with notice and the expiration of any grace or cure period, would
constitute such a default, breach, violation or event permitting acceleration
under such Contract (except payment delinquencies permitted by clause (b)
above). The Company has not waived any such default, breach, violation or event
permitting
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acceleration (except payment delinquencies permitted by clause (b) above), and
the Company has not granted any extension of payment terms on the Contract.
o. No Liens. As of the Closing Date there are, to the best of the
Company's knowledge, no liens or claims which have been filed for work, labor or
materials affecting the Product securing the Contract which are or may be liens
prior to, or equal or coordinate with, the lien of the Contract.
p. Equal Installments. The Contract has a fixed Contract Rate and
provides for level monthly payments which fully amortize the loan over its term.
q. Enforceability. The Contract contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security.
r. One Original. There is only one original executed Contract (other
than an original delivered to the Obligor), which Contract has been delivered to
the Trustee or its custodian on or before the Closing Date.
s. No Government Contracts. No Obligor is the United States
government or an agency, authority, instrumentality or other political
subdivision of the United States government.
SECTION 3.03. Representations and Warranties Regarding the Contracts
in the Aggregate.
The Company represents and warrants that:
a. Amounts. The aggregate principal amounts payable by Obligors
under the Contracts as of the Cutoff Date equal the Principal Balance on the
Closing Date, and each Contract has a Contract Rate greater than the Pass-
Through Rate plus 1%.
b. Characteristics. The Contracts have the following
characteristics: (i) all the Contracts are secured by Products; (ii) no
Contract has a remaining maturity of more than ___ months; and (iii) the final
scheduled payment date on the Contract with the latest maturity is in
__________. Approximately ___% of the Initial Principal Amount is attributable
to loans for purchases of __________ and approximately ___% is attributable to
loans for purchases of used Products. No Contract was originated before
__________ and no Contract was originated after the Cutoff Date. No Contract
has a Contract Rate less than ___%. The first payment on each Contract is due
on or before __________.
c. Computer Tape. The Computer Tape made available by the Company as
of ______________, 199_ to __________________ was complete
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and accurate as of its date and includes a description of the same Contracts
that are described in the List of Contracts.
d. Marking Records. By the Closing Date, the Company has caused the
portions of the Electronic Ledger relating to the Contracts constituting part of
the Trust to be clearly and unambiguously marked to indicate that such Contracts
constitute part of the Trust and are owned by the Trust in accordance with the
terms of the trust created hereunder.
e. No Adverse Selection. No adverse selection procedures have been
employed in selecting the Contracts.
SECTION 3.04. Representations and Warranties Regarding the
Contract Files.
The Company represents and warrants that:
a. Possession. Immediately prior to the Closing Date, the Company
will have possession of each original Contract and the related Contract File,
and there are and there will be no custodial agreements in effect materially and
adversely affecting the rights of the Company to make, or cause to be made, any
delivery required hereunder.
b. Bulk Transfer Laws. The transfer, assignment and conveyance of
the Contracts and the Contract Files by the Company pursuant to this Agreement
is not subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction.
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ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
-----------------------------------------------------------
SECTION 4.01. Custody of Contracts.
a. Subject to the terms and conditions of this Section the Servicer
shall act as custodian for the benefit of the Certificateholders and the
Trustee, and the Servicer shall maintain custody of the Contract Files for the
benefit of the Certificateholders and the Trustee and shall act as custodian
therefor.
b. The Servicer agrees to maintain the related Contract Files at its
offices where they are currently maintained, or at such other offices of the
Servicer in the State of Minnesota as shall from time to time be identified to
the Trustee by written notice. The Servicer may temporarily move individual
Contract Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures; provided, however, that the Servicer will take all
action necessary to maintain the perfection of the Trust's interest in the
Contracts and the proceeds thereof.
c. As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Certificateholders and
the Trustee, maintain accurate records pertaining to each Contract to
enable it to comply with the terms and conditions of this Agreement,
maintain a current inventory thereof, conduct annual physical inspections
of Contract Files held by it under this Agreement and certify to the
Trustee annually that it continues to maintain possession of such Contract
Files;
(ii) implement policies and procedures in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to the
Contract Files on the Servicer's premises and the receipting for Contract
Files taken from their storage area by an employee of the Servicer for
purposes of servicing or any other purposes; and
(iii) attend to all details in connection with maintaining custody of
the Contract Files on behalf of the Certificateholders and the Trustee.
d. In performing its duties under this Section, the Servicer agrees
to act with reasonable care, using that degree of skill and care that it
exercises with respect to similar contracts for the installment purchase of
consumer goods owned and/or serviced by it. The Servicer shall promptly report
to the Trustee any failure by it to hold the Contract Files as herein provided
and shall promptly take appropriate
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action to remedy any such failure. In acting as custodian of the Contract
Files, the Servicer agrees further not to assert any legal or beneficial
ownership interest in the Contracts or the Contract Files, except as provided in
Section 5.06. The Servicer agrees to indemnify the Certificateholders and the
Trustee for any and all liabilities, obligations, losses, damages, payments,
costs, or expenses of any kind whatsoever which may be imposed on, incurred or
asserted against the Certificateholders and the Trustee as the result of any act
or omission by the Servicer relating to the maintenance and custody of the
Contract Files; provided, however, that the Servicer will not be liable for any
portion of any such amount resulting from the gross negligence or willful
misconduct of any Certificateholder or the Trustee. The Trustee shall have no
duty to monitor or otherwise oversee the Servicer's performance as custodian
hereunder, subject to the requirements of Article VII herein.
SECTION 4.02. Filing.
On or prior to the Closing Date, the Company shall cause the UCC-1
financing statement referred to in Section 2.02(g) to be filed and from time to
time the Servicer shall take and cause to be taken such actions and execute such
documents as are necessary to perfect and protect the Certificateholders'
interests in the Contracts and their proceeds and the Products against all other
persons, including, without limitation, the filing of financing statements,
amendments thereto and continuation statements, the execution of transfer
instruments and the making of notations on or taking possession of all records
or documents of title.
SECTION 4.03. Name Change or Relocation.
a. During the term of this Agreement, the Company shall not change
its name, identity or structure or relocate its chief executive office without
first giving notice to the Trustee.
b. If any change in the Company's name, identity or structure or the
relocation of its chief executive office or other action with the passage of
time would make any financing or continuation statement or notice of lien filed
under this Agreement seriously misleading within the meaning of applicable
provisions of the Uniform Commercial Code or any title statute, the Company, no
later than five days after the effective date of such change, shall file such
amendments as may be required to preserve and protect the Certificateholders'
interests in the Contracts and proceeds thereof and in the Products and the
proceeds thereof.
SECTION 4.04. Chief Executive Office.
During the term of this Agreement, the Company will maintain its chief
executive office in one of the States of the United States, except Tennessee.
SECTION 4.05. Costs and Expenses.
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The Servicer agrees to pay all costs and disbursements in connection
with the perfection and the maintenance of perfection required under this
Agreement, as against all third parties, of the Certificateholders' right, title
and interest in and to the Contracts (including, without limitation, the
security interest in the Products granted thereby).
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ARTICLE V
SERVICING OF CONTRACTS
----------------------
SECTION 5.01. Responsibility for Contract Administration.
The Servicer will have the sole obligation to manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. The Trustee, at the request of a Servicing Officer,
shall furnish the Servicer with any powers of attorney or other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. The Company is hereby appointed the Servicer
until such time as any Service Transfer shall be effected under Article VII.
SECTION 5.02. Standard of Care.
In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise that degree of
skill and care consistent with the highest degree of skill and care that the
Servicer exercises with respect to similar contracts (including manufactured
housing contracts) serviced by the Servicer; provided, however, that
notwithstanding the foregoing, the Servicer shall not release or waive the right
to collect the unpaid balance on any Contract.
SECTION 5.03. Records.
The Servicer shall, during the period it is servicer hereunder,
maintain such books of account and other records as will enable the Trustee to
determine the status of each Contract.
SECTION 5.04. Inspection.
a. At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records relating to the Contracts and will cause its personnel
to assist in any examination of such records by the Trustee. The examination
referred to in this Section will be conducted in a manner which does not
unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Trustee may make, the Trustee may, using generally accepted audit procedures,
verify the status of each Contract and review the Electronic Ledger and records
relating thereto for conformity to Monthly Reports prepared pursuant to Article
VI and compliance with the standards represented to exist as to each Contract in
this Agreement.
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b. At all times during the term hereof, the Servicer shall keep
available a copy of the List of Contracts at its principal executive office for
inspection by Certificateholders.
c. A Certificateholder holding Certificates representing in the
aggregate at least 5% of the Fractional Interest in the Trust shall have the
rights of inspection afforded to the Trustee pursuant to this Section 5.04.
SECTION 5.05. Collection Account.
a. On or before the Closing Date, the Company shall establish the
Collection Account in the name of the Trustee for the benefit of the
Certificateholders with an Eligible Institution. The Servicer shall pay into
the Collection Account as promptly as practicable (not later than the next
Business Day) following receipt thereof all amounts, including Advance Payments,
received from Obligors (other than Late Payment Fees, Extension Fees and
assumption fees, which fees shall be retained by the Servicer as additional
compensation for servicing the Contracts); the aggregate of the Repurchase
Prices for Contracts to be repurchased by the Company pursuant to Section 8.06;
and any Net Liquidation Proceeds. All amounts paid into the Collection Account
under this Agreement shall be held in trust for the Certificateholders until
payment of any such amounts is authorized under this Agreement.
b. If the Servicer so directs, the Eligible Institution maintaining
the Collection Account shall, in the name of the Trustee in its capacity as
such, invest the amounts in the Collection Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Payment
Date. Once such funds are invested, such Eligible Institution shall not change
the investment of such funds. All income and gain from such investments shall
to the extent provided in this Agreement be paid to the Servicer as part of its
Monthly Servicing Fee. Any loss on such investments shall be deposited in the
Collection Account by the Servicer out of its own funds immediately as realized.
Funds in the Collection Account not so invested must be insured to the extent
permitted by law by the Federal Deposit Insurance Corporation.
"Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Trustee or any Affiliate of the
Trustee, acting in
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its commercial capacity) incorporated under the laws of the United States
of America or any state thereof and subject to supervision and examination
by federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such investment, the
commercial paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated at least A-1 by Standard & Poor's and (B) any other demand or time
deposit or certificate of deposit which is fully insured by the Federal
Deposit Insurance Corporation;
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act
of 1933 and rated AAAm or AAAm-G by Standard & Poor's, and whose only
investments are in securities described in clauses (i) and (ii) above;
(iv) repurchase obligations with respect to (A) any security described
in clause (i) above or (B) any other security issued or guaranteed by an
agency or instrumentality of the United States of America, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a credit rating of at least AAA from Standard
& Poor's at the time of such investment; provided, however, that securities
issued by any particular corporation will not be Eligible Investments to
the extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation and held as part
of the corpus of the Trust to exceed 10% of amounts held in the Certificate
Account; and
(vi) commercial paper having a rating of at least A-1 from Standard &
Poor's at the time of such investment or pledge as security.
The Trustee may trade with itself or an Affiliate in the purchase or sale
of such Eligible Investments.
SECTION 5.06. Enforcement.
a. The Servicer will, consistent with customary servicing procedures,
act with respect to the Contracts in such manner as will maximize the receipt of
principal and interest on such Contracts.
b. The Servicer may sue to enforce or collect upon Contracts, in its
own name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal
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proceeding to enforce a Contract, the act of commencement shall be deemed to be
an automatic assignment of the Contract to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce a Contract on the ground that it is not a
real party in interest or a holder entitled to enforce the Contract, the Trustee
on behalf of the Trust shall, at the Servicer's expense, take such steps as the
Servicer deems necessary to enforce the Contract, including bringing suit in its
name or the names of the Certificateholders.
c. The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Trustee's behalf to reassign the Contract or the related
Product to the person against whom recourse exists at the price set forth in the
document creating the recourse.
d. The Servicer may grant to the Obligor on any Contract any rebate,
refund or adjustment out of the Collection Account that the Servicer in good
faith believes is required because of prepayment in full of the Contract. The
Servicer will not permit any rescission or cancellation of any Contract.
e. The Servicer may, consistent with customary servicing procedures
for similar contracts and consistent with Section 5.02, grant to the Obligor on
any Contract an extension of payments due under such Contract, provided that
Obligors may not be solicited for extensions and no more than one extension of
payments under a Contract may be granted in any twelve-month period.
Notwithstanding the foregoing, the Servicer may not grant any extension on any
Contract later than __________, 199_. If the amount of funds in the Cash
Collateral Account has been reduced to zero, the Servicer may not grant any
extension on any Contract.
f. The Servicer will not add to the outstanding balance of any
Contract the premium of any physical damage or other individual insurance on a
Product securing such Contract it obtains on behalf of the Obligor under the
terms of such Contract, but may separately add such premium to the Obligor's
obligation as provided by the Contract.
g. If the Servicer shall have repossessed a Product on behalf of the
Trust, the Servicer shall either (i) maintain at its expense physical damage
insurance with respect to such Product, or (ii) indemnify the Trust against any
damage to such Product prior to resale or other disposition.
SECTION 5.07. Trustee to Cooperate.
Upon payment in full on any Contract, the Servicer will notify the
Trustee and the Company (if the Company is not the Servicer) on the next
succeeding Payment Date by certification of a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payments which are required to be deposited in the
Collection Account
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pursuant to Section 5.05 have been so deposited) and shall (if the Servicer is
not then in possession of the Contracts and Contract Files) request delivery of
the Contract and Contract File to the Servicer. Upon receipt of such delivery
and request, the Trustee shall promptly release or cause to be released such
Contract and Contract File to the Servicer. Upon receipt of such Contract and
Contract File, each of the Company (if different from the Servicer) and the
Servicer is authorized to execute an instrument in satisfaction of such Contract
and to do such other acts and execute such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the security
interest in the Product related thereto. The Servicer shall determine when a
Contract has been paid in full; to the extent that insufficient payments are
received on a Contract credited by the Servicer as prepaid or paid in full and
satisfied, the shortfall shall be paid by the Servicer out of its own funds.
From time to time as appropriate for servicing and repossession in connection
with any Contract, if the Servicer is not then in possession of the Contracts
and Contract Files, the Trustee shall, upon written request of a Servicing
Officer and delivery to the Trustee of a receipt signed by such Servicing
Officer, cause the original Contract and the related Contract File to be
released to the Servicer and shall execute such documents as the Servicer shall
deem necessary to the prosecution of any such proceedings. Such receipt shall
obligate the Servicer to return the original Contract and the related Contract
File to the Trustee when the Servicer's need for the Contract and related
Contract File has ceased unless the Contract shall be repurchased as described
in Section 8.07. Upon request of a Servicing Officer, the Trustee shall perform
such other acts as reasonably requested by the Servicer and otherwise cooperate
with the Servicer in enforcement of the Certificateholders' rights and remedies
with respect to Contracts.
SECTION 5.08. Costs and Expenses.
All costs and expenses incurred by the Servicer in carrying out its
duties hereunder (including payment of the Trustee's fees pursuant to Section
11.06, fees and expenses of accountants, payments of all fees and expenses
incurred in connection with the enforcement of Contracts (including enforcement
of Defaulted Contracts and repossessions of Products securing such Contracts
when such Contracts are not repurchased pursuant to Section 8.07) and all other
fees and expenses not expressly stated hereunder to be for the account of the
Trust) shall be paid by the Servicer and the Servicer shall not be entitled to
reimbursement hereunder.
SECTION 5.09. Maintenance of Insurance.
The Servicer will at all times maintain its coverage under an Errors
and Omissions Protection Policy, and will force-place an insurance policy
providing the coverage specified in Section 3.02(f) with respect to every
Product securing a Contract upon expiration of a policy providing such coverage
and nonrenewal by the Obligor, with no lapse in coverage.
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ARTICLE VI
REPORTS
-------
SECTION 6.01. Monthly Reports.
No later than one Business Day following each Determination Date, the
Servicer shall cause the Trustee and Moody's to receive a "Monthly Report"
substantially in the form of Exhibit J hereto, which report the Trustee shall
send to the Certificateholders concurrently with the distribution of Monthly
Principal and Monthly Interest on the immediately following Payment Date and
which report shall include the following information as adjusted on the
immediately following Payment Date:
a. The amount of "Monthly Principal" distributed on such Payment Date
pursuant to Section 8.01, which shall be:
(i) The amount of regular principal payments on Contracts paid or
applied during the prior Due Period (other than the amount
attributable to principal of any payment received during such Due
Period and due in a previous Due Period, if such payment was
previously advanced as a Voluntary Advance pursuant to Section 8.03);
plus
(ii) The amount of full Principal Prepayments received and
partial Principal Prepayments applied during the prior Due Period;
plus
(iii) The amount of Delinquent Payments during the prior Due
Period that is attributable to principal on the related Contracts,
which will be advanced pursuant to Section 8.03; plus
(iv) The aggregate of the outstanding principal balances of all
Contracts that became Liquidated Contracts during the prior Due
Period; plus
(v) The amount of the Repurchase Price paid by the Company for
any Contract repurchased in respect of such Determination Date as
described in Section 8.06 that is attributable to the principal amount
outstanding on such Contract; plus
(vi) The amount of any reduction in the principal amount owed by
the Obligor as a result of the Obligor's bankruptcy; plus
(vii) The aggregate principal amount specified in clauses (i)
through (vi) above, for all prior Payment Dates that was not
previously
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distributed because of an insufficient amount available in the
Collection Account and Cash Collateral Account.
b. the amount of Monthly Interest paid on such Payment Date;
c. the remaining Principal Balance after giving effect to the payment
of Monthly Principal on such Payment Date (on which Monthly Interest will be
calculated on the next succeeding Payment Date);
d. the amounts of the Servicing Fees and Guarantee Fees paid on such
Payment Date, separately identifying with respect to Servicing Fees the Monthly
Servicing Fee and any Late Payment Fees and Extension Fees paid during the prior
Due Period;
e. the Pool Factor immediately before and immediately after such
Payment Date;
f. the number of Contracts with Delinquent Payments, identifying such
Contracts and the amount of such Delinquent Payments, and the number of and
aggregate unpaid principal balance of Contracts with payments delinquent more
than one day;
g. the Delinquency Ratio as of such Payment Date;
h. the number, identity and unpaid principal balance of Liquidated
Contracts;
i. all amounts paid to the Servicer to reimburse the Servicer for
payments previously made pursuant to Section 8.03 to cover Delinquent Payments
on Contracts;
j. the Requisite Amount for such Payment Date;
k. the Cumulative Loss Ratio and the Quarterly Loss Ratio for the most
recent Quarterly Release Date;
l. the Weighted Average Remaining Maturity for such Payment Date; and
m. the Weighted Average Contractual Rate of Interest for such
Payment Date.
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SECTION 6.02. Officer's Certificate.
Each Monthly Report pursuant to Section 6.01 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit F,
certifying the accuracy of the Monthly Report and that no Event of Termination
or event that with notice or lapse of time or both would become an Event of
Termination has occurred, or if such event has occurred and is continuing,
specifying the event and its status.
SECTION 6.03. Other Data.
In addition, the Company and (if different from the Company) the
Servicer shall, on request of the Trustee, Moody's or any Initial
Certificateholder, furnish the Trustee, Moody's or such Initial
Certificateholder, as the case may be, such underlying data as may be reasonably
requested.
SECTION 6.04. Annual Report of Accountants.
On or before May 1 of each year, commencing May 1, 1996, the Servicer
at its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Trustee and Standard & Poor's to the effect that such firm has
examined certain documents and records relating to the servicing of the home
improvement contracts and promissory notes under pooling and servicing
agreements substantially similar one to another (such statement to have attached
thereto a schedule setting forth the pooling and servicing agreements covered
thereby, including this Agreement) and that, on the basis of such examination,
conducted substantially in compliance with generally accepted auditing
standards, such servicing has been conducted in compliance with such pooling and
servicing agreements, except for such significant exceptions or errors in
records that, in the opinion of such firm, generally accepted auditing standards
requires it to report.
SECTION 6.05. Statements to Certificateholders.
a. Concurrently with each distribution to Certificateholders pursuant
to Article VIII, the Trustee, in its capacity as Certificate Registrar and
Paying Agent, shall cause to be mailed to each Certificateholder at the address
appearing on the Certificate Register a statement as of the related Payment Date
prepared by the Servicer setting forth:
(i) the amount of the aggregate distribution to the Certificateholders
which constitutes Monthly Principal, specifying the amounts attributable to
scheduled payments by Obligors, to Principal Prepayments by Obligors, and
to other payments with respect to principal;
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(ii) the amount of the aggregate distribution to the
Certificateholders which constitutes Monthly Interest;
(iii) the remaining Principal Balance;
(iv) the amount deposited in the Cash Collateral Account on such
Payment Date;
(v) the amount on deposit in the Cash Collateral Account after giving
effect to all deposits and withdrawals on the Payment Date;
(vi) the Pool Factor immediately before and immediately after such
Payment Date;
(vii) the amount of fees payable out of the Trust;
(viii) the number and aggregate principal balance of Contracts
delinquent more than one day, 31-59 days, 60-89 days and 90 or more days;
(ix) the number of Contracts that became Liquidated Contracts during
the immediately preceding Due Period; and
(x) such other customary factual information as is available to the
Company or the Servicer (if different from the Company) as the Servicer
deems necessary and can reasonably obtain from its existing data base to
enable Certificateholders to prepare their tax returns.
b. Within 75 days after the end of each calendar year, the
Certificate Registrar shall mail to each Certificateholder of record at any time
during such year a report prepared by the Servicer as to the aggregate amounts
of Monthly Interest and Monthly Principal paid to such Certificateholder and any
additional information reported pursuant to subsection (a)(x) of this Section
6.05, attributable to such Certificateholder.
c. A Certificateholder holding Certificates representing in the
aggregate at least 5% of the Fractional Interest in the Trust shall, upon
written request to the Trustee, be entitled to receive copies of all reports
provided to the Trustee.
SECTION 6.06. Payment of Taxes.
The Servicer shall be responsible for and agrees to prepare, make and file
all federal, state, local or other tax returns, information statements and other
returns and documents of every kind and nature whatsoever required to be made or
filed by or on behalf of the Trust pursuant to the Code and other applicable tax
laws and regulations. Each such return, statement and document shall, to the
extent required
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by the Code or other applicable law and at the request of the Servicer, be
signed on behalf of the Trust by the Trustee. The Trustee shall have no
responsibility whatsoever for the accuracy or completeness of any such return,
statement or document. The Servicer agrees to indemnify the Trustee and hold it
harmless for, from, against and in respect to any and all liability, loss,
damage and expense which may be incurred by the Trustee based upon or as a
result of the Trustee's execution of any and all such tax returns, statements
and documents.
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ARTICLE VII
SERVICE TRANSFER
----------------
SECTION 7.01. Events of Termination.
"Event of Termination" means the occurrence of any of the following:
a. Any failure by the Servicer to make any payment or deposit
required to be made hereunder and the continuance of such failure for a period
of four Business Days;
b. Failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement in this Agreement (other than a
covenant or agreement which is elsewhere in this Section specifically dealt
with) which continues unremedied for 30 days;
c. Any assignment by the Servicer of its duties or rights hereunder
except as specifically permitted hereunder, or any attempt to make such an
assignment;
d. A court having jurisdiction in the premises shall have entered a
decree or order for relief in respect of the Servicer in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Servicer, as the case may be,
or for any substantial liquidation of its affairs;
e. The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or
f. The failure of the Servicer to be an Eligible Servicer.
g. The failure of the Servicer to make one or more payments due with
respect to aggregate recourse debt or other obligations exceeding $250,000, or
the occurrence of any event or the existence of any condition, the effect of
which event or condition is to cause (or permit one or more persons to cause)
more than $250,000 of aggregate recourse debt or other obligations of the
Servicer to become due before its (or their) stated maturity or before its (or
their) regularly scheduled dates of
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payment so long as such failure, event or condition shall be continuing and
shall not have been waived by the person or persons entitled to performance.
h. The Servicer shall fail for 60 days to pay, or bond against, an
unappealable, undischarged, unvacated and unstayed final judgment by a court of
competent jurisdiction in an aggregate amount of $250,000 or more.
SECTION 7.02. Transfer.
a. If an Event of Termination has occurred and is continuing, the
Trustee or Certificateholders with aggregate Fractional Interests representing
25% or more of the Trust, may terminate all (but not less than all) of the
Servicer's management, administrative, servicing and collection functions solely
at the expense of the Servicer (such termination being herein called a "Service
Transfer"). The Trustee may cause a Service Transfer by delivering notice in
writing of such Service Transfer to the Servicer. The Certificateholders with
aggregate Fractional Interests representing 25% or more of the Trust may cause a
Service Transfer by giving notice in writing to the Trustee.
b. On receipt of the notice required by Section 7.02(a) (or, if
later, on a date designated therein), all authority and power of the Servicer
under this Agreement, whether with respect to the Contracts, the Contract Files
or otherwise (except with respect to the Collection Account, the transfer of
which shall be governed by Section 7.06), shall pass to and be vested in the
Trustee pursuant to and under this Section 7.02; and, without limitation, the
Trustee is authorized and empowered to execute and deliver on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do any and all acts or things necessary or appropriate to
effect the purposes of such notice of termination. Each of the Company and the
Servicer agrees to cooperate with the Trustee in effecting the termination of
the responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to the Trustee for administration by it of all cash
amounts which shall at the time be held by the Servicer for deposit, or have
been deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts. In addition to any other amounts which are then or
may become payable to the Servicer under this Agreement, and notwithstanding the
termination of its activities as Servicer, the Servicer shall be entitled to
receive out of any Delinquent Payment due during any period prior to the notice
pursuant to this Section 7.02 which terminates the obligations and rights of the
Servicer hereunder and received after such notice, that portion of such payment
which it would have received pursuant to Section 8.02 if such notice had not
been given. The Servicer shall transfer to the new servicer (i) the Servicer's
records relating to the Contracts in such electronic form as the new servicer
may reasonably request and (ii) any Contract Files in the Servicer's possession
(including all Contract Files in the Company's possession, if the Company is
terminated as Servicer).
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SECTION 7.03. Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.02, the Trustee shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that (i) the Trustee will not assume any obligations of the
Company pursuant to Sections 8.05, and (ii) the Trustee shall not be liable for
any acts or omissions of the Servicer occurring prior to such Service Transfer
or for any breach by the Servicer of any of its representations and warranties
contained herein or in any related document or agreement. As compensation
therefor, the Trustee shall, except as provided in Section 7.02, be entitled to
receive reasonable compensation out of the Monthly Servicing Fee.
Notwithstanding the above, the Trustee may, if it shall be unwilling so to act,
or shall, if it is legally unable so to act, appoint, or petition a court of
competent jurisdiction to appoint, an Eligible Servicer as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder. Pending appointment of a
successor to the Servicer hereunder, unless the Trustee is prohibited by law
from so acting, the Trustee shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Contracts
as it and such successor shall agree (following the receipt by the Trustee of
bids from at least two Eligible Servicers); provided, however, that no such
monthly compensation shall exceed 1/12 of 1% of the Principal Balance. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
SECTION 7.04. Notification to Certificateholders.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, to Moody's, and to
the Certificateholders at their respective addresses appearing on the
Certificate Register.
b. Within 10 days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to Moody's and to the Certificateholders at their
respective addresses appearing on the Certificate Register.
SECTION 7.05. Effect of Transfer.
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a. After the Service Transfer, the Trustee or new Servicer may notify
Obligors to make payments directly to the new Servicer that are due under the
Contracts after the effective date of the Service Transfer.
b. After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer will transmit or cause to be
transmitted directly to the new Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts.
c. A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Company pursuant to Article X and Sections 8.05, 11.06 and 11.12(f))
other than those relating to the management, administration, servicing or
collection of the Contracts.
SECTION 7.06. Transfer of Collection Account.
Notwithstanding the provisions of Section 7.02, if the Collection
Account shall be maintained with the Servicer and an Event of Termination shall
occur and be continuing, the Servicer shall, after five days' written notice
from the Trustee, or in any event within ten days after the occurrence of the
Event of Termination, establish a new account or accounts in trust for the
Certificateholders conforming with the requirements of this Agreement at the
trust department of the Trustee or with an Eligible Institution other than the
Servicer and promptly transfer all funds in the Collection Account to such new
account, which shall thereafter be deemed the Collection Account for the
purposes hereof.
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ARTICLE VIII
PAYMENTS AND CASH COLLATERAL ACCOUNT
------------------------------------
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Certificateholder
as of a Record Date shall be paid on the next succeeding Payment Date by check
mailed to such Certificateholder at the address for such Certificateholder
appearing on the Certificate Register (or, if such Certificateholder holds
Certificates with an aggregate initial Principal Balance of at least $500,000,
by wire transfer of immediately available funds pursuant to instructions
delivered to the Trustee at least 10 days prior to such Payment Date), the sum
equal to such Certificateholder's Fractional Interest of Monthly Interest and
Monthly Principal.
b. The Trustee shall appoint an Eligible Institution to be the paying
agent (the "Paying Agent") and cause it to make the payments to the
Certificateholders required hereunder. The Trustee initially appoints itself,
with an office at __________________________________, as such Paying Agent. The
Trustee shall require the Paying Agent (if other than the Trustee) to agree in
writing that all amounts held by it for payment hereunder will be held in trust
for the benefit of the Certificateholders and that it will notify the Trustee of
any failure by the Servicer to make funds available to the Paying Agent for the
payment of amounts due on the Certificates.
SECTION 8.02. Fees.
Subject to the terms of this Article VIII, on each Payment Date, (a)
the Trustee shall be paid the Trustee's Fee, and (b) the Servicer shall be paid
the Monthly Servicing Fee.
SECTION 8.03. Voluntary Advances.
Not later than one Business Day following the Determination Date, the
Servicer may in its sole discretion advance all Delinquent Payments for the
immediately preceding Due Period by depositing the aggregate amount of such
Delinquent Payments in the Collection Account, provided, however, that the
Servicer shall be obligated to advance Delinquent Payments only to the extent
that the Servicer, in its sole discretion, expects to be able to recover such
advances from subsequent collections, including Net Liquidation Proceeds.
SECTION 8.04. Payments.
a. On each Determination Date the Servicer shall determine the
following amount of funds (the "Available Funds"): (i) the amount of funds in
the Collection Account (including all interest earned on such funds but
excluding
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(a) amounts constituting Advance Payments with respect to the Due Period ending
immediately prior to such Determination Date and (b) amounts received after such
Due Period); plus (ii) the aggregate of the Repurchase Prices for Contracts to
be repurchased by the Company in respect of such Determination Date pursuant to
Section 8.05.
b. Subject to Section 8.04(c), on each Payment Date, the Available
Funds in the Collection Account (plus, as to (i), (ii) and (iii), Voluntary
Advances) will be distributed to Certificateholders or deposited in the amounts,
and in the priorities set forth below:
(i) the reimbursement of the Servicer for Uncollectible Advances and for
Delinquent Payments that were the subject of a Voluntary Advance on a prior
Payment Date and were recovered during the prior Due Period;
(ii) the Monthly Interest to the Certificateholders;
(iii) the Monthly Principal to the Certificateholders;
(iv) the payment of the Monthly Servicing Fee;
(v) any remaining Available Funds shall be paid to __________.
c. Notwithstanding the foregoing, in the event that for any Payment
Date the Trustee has not received the Monthly Report by the date prescribed by
Section 6.01 and if the Monthly Report is received prior to such Payment Date
but is not received in sufficient time, within the sole judgment of the Trustee,
to enable the Trustee to calculate the amount of Monthly Principal to be paid to
Certificateholders on such Payment Date, the amount of Monthly Interest for such
Payment Date shall be distributed on such Payment Date, to Certificateholders
from Available Funds in the Collection Account (plus Voluntary Advances) prior
to making any other distribution or application of amounts required to be
distributed or applied pursuant to Section 8.04(b). Within three Business Days
of the later of (a) the date of the Trustee's receipt of such Monthly Report for
such Payment Date or (b) such Payment Date, the Available Funds in the
Collection Account (plus, as to amounts described in Section 8.04(b)(i) and
(iii), plus Voluntary Advances) will be distributed or deposited as required by
Sections 8.04(b)(i), (iii), (iv) and (v), in order of priority, prior to the
distribution or application of any amounts required to be distributed or applied
pursuant to Section 8.04(b) on any subsequent Payment Date.
SECTION 8.05. Repurchases of Contracts for Breach of Representations
and Warranties.
The Company shall repurchase a Contract, at its Repurchase Price, not
later than one Business Day after the first Determination Date which is more
than 90 days after the Company becomes aware, or should have become aware, or
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receives written notice from the Trustee, of a breach of a representation or
warranty of the Company set forth in Sections 3.02 or 3.03 of this Agreement
that materially adversely affects the Trust's interest in such Contract and
which breach has not been cured; provided, however, that with respect to any
Contract incorrectly described on the List of Contracts with respect to unpaid
principal balance or Contract Rate, which the Company would otherwise be
required to repurchase pursuant to this Section 8.05, the Company may, in lieu
of repurchasing such Contract, deposit in the Collection Account not later than
one Business Day after such Determination Date cash in an amount sufficient to
cure such deficiency or discrepancy. Notwithstanding any other provision of
this Agreement, the obligation of the Company under this Section shall not
terminate upon a Service Transfer pursuant to Article VII.
SECTION 8.06. Reassignment of Repurchased Contracts.
Upon receipt by the Trust by deposit in the Collection Account of the
Repurchase Price under Section 8.05, and upon receipt of a certificate of a
Servicing Officer in the form attached hereto as Exhibit G, the Trustee shall
assign to the Company all of the Certificateholders' right, title and interest
in the repurchased Contract without recourse, representations or warranty,
except as to the absence of liens, charges or encumbrances created by or arising
as a result of actions of the Trustee.
SECTION 8.07. Company's Repurchase Option.
On written notice to the Trustee at least 20 days prior to a Payment
Date, provided the Principal Balance is then less than 10% of the Initial
Principal Amount, the Company may (but is not required to) repurchase on that
Payment Date all outstanding Contracts at a price equal to the Principal Balance
on the previous Payment Date plus Monthly Interest thereon. Such price will be
deposited in the Collection Account one Business Day before such Payment Date,
against the Trustee's release of the Contracts and the Contract Files to the
Company. In the event that the long-term unsecured debt of the Company shall be
rated less than Baa3 at the time the Company repurchases Contracts pursuant to
this Section 8.07, the Company or Servicer, as the case may be, will provide
Moody's with an opinion that such transfer is not a fraudulent conveyance under
the federal bankruptcy code. The Trustee shall send written notice to each
Certificateholder of the Company's intention to repurchase Contracts pursuant to
this Section 8.07 within five Business Days following the Trustee's receipt of
written notice from the Company of the Company's intention to repurchase.
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ARTICLE IX
THE CERTIFICATES
----------------
SECTION 9.01. The Certificates.
The Certificates shall be substantially in the form of Exhibit A.
Certificates shall be issued in denominations of $250,000 and any integral
multiple of $1,000 in excess thereof, except that one Certificate may be issued
in a denomination representing the remainder of the Initial Principal Amount.
Each Certificate shall be executed by the Trustee on behalf of the Trust by the
manual signature of a duly authorized Responsible Officer or authorized
signatory of the Trustee. Certificates bearing the signatures of individuals
who were at any time the proper officers or authorized signatories of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices or positions prior to the delivery of such
Certificates or did not hold such offices or positions at the date of such
Certificates. All Certificates shall be dated the date of their execution.
SECTION 9.02. Registration of Transfer and Exchange of Certificates.
a. The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.03 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.
b. No transfer of a Certificate shall be made to any employee benefit
plan, trust or account that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or that is described in Section
4975(e)(1) of the Code. By accepting and holding a Certificate, each
Certificateholder shall be deemed to have represented and warranted that it is
not (A) an employee benefit plan (as defined in Section 3(3) of ERISA) whether
or not it is subject to the provisions of Title I of ERISA, (B) a plan described
in Section 4975(e)(1) of the Code, or (C) an entity whose underlying assets are
deemed to be assets of a plan described in (A) or (B) above by reason of such
plan's investment in the entity (as determined under Department of Labor
Regulations, 29 C.F.R. (S) 2510.3-101 (1991)).
c. At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
original denomination, upon surrender of the Certificates to be exchanged at
such office. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute and deliver the Certificates which the Certificateholder
making the
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exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall be duly endorsed by, or shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the holder thereof or his or her
attorney duly authorized in writing.
SECTION 9.03. No Charge; Disposition of Void Certificates.
No service charge shall be made to a Certificateholder for any
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for transfer and exchange shall be disposed of in a
manner approved by the Trustee.
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) the Certificateholder
delivers to the Certificate Registrar and the Trustee (at the expense of the
Certificateholder) such security or indemnity as may be required by each to save
it harmless (which indemnity may be provided by written agreement of the Initial
Certificateholder, if the Initial Certificateholder is making the request for a
new Certificate under this Section 9.04), then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and original denomination. Upon the issuance of any
new Certificate under this Section 9.04, the Trustee may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto. Any duplicate Certificate issued pursuant to this
Section 9.04 shall constitute complete and indefeasible evidence of ownership of
the Fractional Interest, as if originally issued, whether or not the mutilated,
destroyed, lost or stolen Certificate shall be found at any time.
SECTION 9.05. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Servicer, the Company, the Trustee, the Paying Agent and the
Certificate Registrar may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
remittances pursuant to Section 8.01 and for all other purposes whatsoever, and
none of the Servicer, the Company, the Trustee, the Certificate Registrar, the
Paying Agent or any agent of the Servicer, the Company, the Trustee, the Paying
Agent or the Certificate Registrar shall be affected by notice to the contrary.
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SECTION 9.06. Access to List of Certificateholders' Names and
Addresses.
The Certificate Registrar will furnish to the Trustee and the
Servicer, within five days after receipt by the Certificate Registrar of a
request therefor from the Trustee in writing, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If any Certificateholder
(hereinafter referred to as an "Applicant") applies in writing to the Trustee,
and such application states that the Applicant desires to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and is accompanied by a copy of the communication which such
Applicant proposes to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such Applicant access during
normal business hours to the most recent list of Certificateholders held by the
Trustee. If such list is as of a date more than 90 days prior to the date of
receipt of such Applicant's request, the Trustee shall promptly request from the
Certificate Registrar a current list as provided above, and shall afford such
Applicant access to such list promptly upon receipt. Every Certificateholder,
by receiving and holding a Certificate, agrees with the Certificate Registrar
and the Trustee that none of the Company, the Certificate Registrar or the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Certificateholders hereunder,
regardless of the source from which such information was derived.
SECTION 9.07. Authenticating Agents.
The Trustee may appoint one or more Persons with power to act on its
behalf and subject to its direction in the execution and delivery of the
Certificates (collectively, "Authenticating Agents"). For all purposes of this
Agreement, the execution and delivery of Certificates by the Authenticating
Agent pursuant to this Section shall be deemed to be the execution and delivery
of Certificates "by the Trustee."
SECTION 9.08. Presentation of Certificates Upon Maturity. Each
Certificateholder does hereby agree to present any and all Certificates
registered in the name of such Certificateholder to the Trustee for cancellation
within fifteen days of the earlier of (a) __________. 199_ or (b) the Payment
Date on which the Company repurchases the Contracts pursuant to Section 8.07.
Each Certificateholder does hereby agree to indemnify the Trustee, the Company,
and the Certificate Registrar against any liability that may result from the
failure of the Certificateholder to present such Certificate to the Trustee for
cancellation following such final payment.
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ARTICLE X
INDEMNITIES
-----------
SECTION 10.01. Product Liability.
The Company will defend and indemnify the Trust, the Trustee, any
agents of the Trustee and the Certificateholders against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation arising out of or resulting from
the use, ownership or operation of any Product by the Company or the Servicer or
any Affiliate of either. Notwithstanding any other provision of this Agreement,
the obligation of the Company under this Section shall not terminate upon a
Service Transfer pursuant to Article VII.
SECTION 10.02. Liabilities to Obligors.
No obligation or liability to any Obligor under any of the Contracts
is intended to be assumed by the Trust or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby and, to the
maximum extent permitted and valid under mandatory provisions of law, the Trust
and the Certificateholders expressly disclaim such assumption.
SECTION 10.03. Tax Indemnification.
The Company agrees to pay, and to indemnify, defend and hold harmless
the Trust, the Trustee and the Certificateholders from, any taxes which may at
any time be asserted with respect to, and as of the date of, the transfer of the
Contracts to the Trust, including, without limitation, any sales, gross
receipts, general corporation, personal property, privilege or license taxes
(but not including any federal, state or other taxes arising out of the creation
of the Trust and the issuance of the Certificates) and costs, expenses and
reasonable counsel fees in defending against the same, whether arising by reason
of the acts to be performed by the Company or the Servicer under this Agreement
or imposed against the Trust, a Certificateholder or otherwise. Notwithstanding
any other provision of this Agreement, the obligation of the Company under this
Section shall not terminate upon a Service Transfer pursuant to Article VII.
SECTION 10.04. Servicer's Indemnities.
The Servicer shall defend and indemnify the Trust, the Trustee and the
Certificateholders against any and all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel and expenses
of litigation, in respect of any action, consistent with the standard of care
required under Section 5.02 of this Agreement, taken or omitted to be taken by
the Servicer with respect to any Contract. This indemnity shall survive any
Service Transfer
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(but the original Servicer's obligations under this Section 10.04 shall not
relate to any actions of any subsequent Servicer after a Service Transfer) and
any payment of the amount owing under, or any repurchase by the Company of, any
such Contract.
SECTION 10.05. Operation of Indemnities.
Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Company or the Servicer has made any indemnity payments to the Trustee pursuant
to this Article and the Trustee thereafter collects any of such amounts from
others, the Trust will repay such amounts collected to the Company or the
Servicer, as the case may be, without interest.
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ARTICLE XI
THE TRUSTEE
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SECTION 11.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Termination and
after the curing of all Events of Termination which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Termination has occurred (which has not
been cured), the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement.
Subject to Section 11.02, no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act (including actions or omissions within its
control resulting in the failure of Certificateholders to receive timely payment
of Monthly Interest and Monthly Principal) or its own misconduct; provided,
however, that:
a. Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer of the Trustee, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
c. The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders with aggregate Fractional Interests
representing 25% or more of the Trust relating to the time, method and place of
conducting any
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proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement; and
d. The Trustee shall not be charged with knowledge of any event
referred to in Section 7.01 unless a Responsible Officer of the Trustee at the
Corporate Trust Office obtains actual knowledge of such event or the Trustee
receives written notice of such event from the Servicer or Certificateholders
with aggregate Fractional Interests representing 25% or more of the Trust.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Company or the Servicer under this Agreement,
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, certificate
of a Servicing Officer, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any
counsel for the Company or the Servicer shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such opinion of counsel;
c. The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been
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cured), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs;
d. Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Certificateholders with aggregate Fractional
Interests representing 25% or more of the Trust; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition to
so proceeding. The reasonable expense of every such examination shall be paid
by the Servicer or, if paid by the Trustee, shall be reimbursed by the Servicer
upon demand; and
e. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions of
such agents, attorneys or custodians if appointed by it with due care hereunder.
f. The Trustee, itself or through the Servicer, is hereby authorized
to sell, convey, pledge, mortgage, lease or transfer title to any interest in a
Product or other collateral securing a Contract which has defaulted and been
repossessed on terms the Trustee in its sole discretion deems appropriate.
SECTION 11.03. Trustee Not Liable for Certificates or Contracts.
The Trustee assumes no responsibility for the correctness of the
recitals contained herein or in the Certificates (other than the Trustee's
execution thereof). The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (other than its execution
thereof) or of any Contract, Contract File or related document. The Trustee
shall not be accountable for the use or application by the Servicer or the
Company of funds paid to the Company in consideration of conveyance of the
Contracts to the Trust by the Company or deposited in or withdrawn from the
Collection Account by the Servicer.
SECTION 11.04. Trustee May Own Certificates.
The Trustee in its individual or other capacity may become the owner
or pledgee of Certificates representing less than all the beneficial interest in
the Trust with the same rights as it would have if it were not Trustee.
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SECTION 11.05. Rights of Certificateholders to Direct Trustee and to
Waive Events of Termination.
Certificateholders with aggregate Fractional Interests representing
25% or more of the Trust shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that,
subject to Section 11.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee being advised by counsel determines that the
action so directed may not lawfully be taken, or if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction by the Certificateholders.
Certificateholders with aggregate Fractional Interests representing 51% or more
of the Trust may on behalf of Certificateholders waive any past Event of
Termination hereunder and its consequences, except a default in respect of a
covenant or provision hereof which under Section 12.08 cannot be modified or
amended without the consent of all Certificateholders, and upon any such waiver,
such Event of Termination shall cease to exist and shall be deemed to have been
cured for every purpose of this Agreement; but no such waiver shall extend to
any subsequent or other Event of Termination or impair any right consequent
thereon.
SECTION 11.06. The Servicer to Pay Trustee's Fees and Expenses.
The Servicer agrees:
a. to pay to the Trustee, on each Payment Date, reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
b. except as otherwise expressly provided herein, to reimburse the
Trustee, to the extent requested by the Trustee, for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
c. to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust and its duties hereunder, including the costs and expenses of defending
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itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The covenants in this Section 11.06 shall be for the benefit of the
Trustee in its capacities as Trustee, Paying Agent and Certificate Registrar
hereunder, and shall survive the termination of this Agreement.
SECTION 11.07. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any State, authorized under such laws to exercise corporate trust powers, whose
unsecured debt is rated at least Baa3 by Moody's and shall have a combined
capital and surplus of at least $50,000,000 or shall be a member of a bank
holding system the aggregate combined capital and surplus of which is
$50,000,000, provided that the Trustee's separate capital and surplus shall at
all times be at least the amount required by Section 310(a)(2) of the Trust
Indenture Act of 1939, as amended and shall be acceptable to the Initial
Certificateholders with aggregate Fractional Interests representing more than
50% of the Trusts, which approval shall not be unreasonably withheld. By
accepting a Certificate the Initial Certificateholders are deemed to have
consented to the appointment of _______________________ as Trustee. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a supervising or examining authority, then for the purposes
of this Section 11.07, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 11.07, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 11.08.
SECTION 11.08. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Servicer, the Company and
the Initial Certificateholders. Upon receiving such notice of resignation, the
Company, with the approval of Initial Certificateholders with aggregate
Fractional Interests representing more than 50% of the Trust, which approval
shall not be unreasonably withheld, shall promptly appoint a successor Trustee
by written instrument, in duplicate, one copy of which instrument shall be
delivered to each of the Servicer and the Company and one copy to the successor
Trustee. The appointment of a successor Trustee shall be deemed to have been
approved by Initial Certificateholders with aggregate Fractional Interests
representing more than 50% of the Trust if Initial Certificateholders with
aggregate Fractional Interests representing more than 50% of the Trust shall
have failed to object in writing to such appointment within seven (7) Business
Days following such Initial Certificateholders' receipt of a copy of the
written instrument of appointment required by this Section 11.08, which copy
shall be properly addressed and mailed by
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certified first-class mail, return receipt requested or sent by overnight
courier service or delivered by personal delivery to such Initial
Certificateholder at the address shown in the Certificate Register. If no
successor Trustee shall have been so appointed and shall have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.07 and shall fail to resign after written
request therefor by the Company, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Company may
remove the Trustee. If the Company shall have removed the Trustee under the
authority of the immediately preceding sentence, the Company shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.08 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 11.09.
SECTION 11.09. Successor Trustee.
Any successor Trustee appointed as provided in Section 11.08 shall
execute, acknowledge and deliver to the Servicer, the Company and to its
predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The predecessor Trustee shall deliver or cause to be
delivered to the successor Trustee the Contracts and the Contract Files and any
related documents and statements held by it hereunder; and, if the Contracts are
then held by a custodian pursuant to a custodial agreement, the predecessor
Trustee and the custodian shall amend such custodial agreement to make the
successor Trustee the successor to the predecessor Trustee thereunder; and the
Servicer, the Company and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 11.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 11.07.
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Upon acceptance of appointment by a successor Trustee as provided in
this Section 11.09, the Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to Moody's and to each Certificateholder at their
addresses as shown in the Certificate Register. If the Servicer fails to mail
such notice within ten days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Servicer.
SECTION 11.10. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such Person shall be eligible under
the provisions of Section 11.07, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. Upon such occasion, the Servicer shall cause notice
thereof to be mailed to Moody's. If the Servicer fails to mail such notice
within ten days after such succession, the successor Trustee shall cause such
notice to be mailed at the expense of the Servicer.
SECTION 11.11. Tax Returns.
The Servicer, on behalf of the Trust, shall request that the Trustee
furnish the Servicer with all such information as may be reasonably required in
connection with the preparation of all tax returns of the Trust and the Trustee
shall, upon such request, furnish such information and execute such returns.
SECTION 11.12. Obligor Claims.
In connection with any offset defenses, or affirmative claims for
recovery, asserted in legal actions brought by Obligors under one or more
Contracts based upon provisions therein complying with, or upon other rights or
remedies arising from, any legal requirements applicable to the Contracts,
including, without limitation, the Federal Trade Commission's Trade Regulation
Rule Concerning Preservation of Consumers' Claims and Defenses (16 C.F.R. (S)
433) as amended from time to time:
a. The Trustee is not, and shall not be deemed to be, either in any
individual capacity, as trustee hereunder or otherwise, a creditor, or a
joint venturer with or an Affiliate of, or acting in concert or cooperation
with, any seller of Products, in the arrangement, origination or making of
Contracts. The Trustee is the holder of the Contracts only as trustee on
behalf of the Certificateholders, and not as a principal or in any
individual or personal capacity;
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b. The Trustee shall not be personally liable for or obligated to pay
Obligors, any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments, pursuant to such legal actions;
c. The Trustee will pay, solely from available Trust monies, affirmative
claims for recovery by Obligors only pursuant to final judicial orders or
judgments, or judicially approved settlement agreements, resulting from
such legal actions;
d. The Trustee will comply with judicial orders and judgments which require
its actions or cooperation in connection with Obligors' legal actions to
recover affirmative claims against Certificateholders.
e. The Trustee will cooperate with and assist Certificateholders in their
defense of legal actions by Obligors to recover affirmative claims if such
cooperation and assistance is not contrary to the interests of the Trustee
as a party to such legal actions and if the Trustee is satisfactorily
indemnified for all liability, costs and expenses arising therefrom; and
f. The Company hereby agrees to indemnify, hold harmless and defend the
Trustee and Certificateholders from and against any and all liability,
loss, costs and expenses of the Trustee and Certificateholders resulting
from any affirmative claims for recovery asserted or collected by Obligors
under the Contracts. Notwithstanding any other provision of this Agreement,
the obligation of the Company under this Section 11.12(f) shall not
terminate upon a Service Transfer pursuant to Article VII.
SECTION 11.13. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction having authority
over the Trust, the Contracts or the Obligors, the Company and Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or co-
trustees, jointly with the Trustee, or separate trustee or separate trustees, of
all or any part of the Trust, and to vest in such Person or Persons, in such
capacity, such title to the Trust, or any part thereof, and, subject to the
other provisions of this Section 11.13, such powers, duties, obligations, rights
and trusts as the Company and the Trustee may consider necessary or desirable.
If the Company shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in case an Event of Termination
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.07 hereunder and no notice to Certificateholders
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of the appointment of co-trustee(s) or separate trustee(s) shall be required
under Section 11.09 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 11.13 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such co-trustee or separate trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such co-trustee or separate trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then co-trustees and separate trustees,
as effectively as if given to each of them. Every instrument appointing any co-
trustee or separate trustee shall refer to this Agreement and the conditions of
this Article XI. Each co-trustee and separate trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any co-trustee or separate trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any co-trustee or separate trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
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ARTICLE XII
MISCELLANEOUS
-------------
SECTION 12.01. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon determination that the performance of its duties
hereunder is no longer permissible under applicable law. Any such determination
permitting the resignation of the Servicer shall be evidenced by an opinion of
Counsel for the Servicer to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a successor servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 7.03.
SECTION 12.02. Company Not to Engage in Certain Transactions with
Respect to the Trust.
The Company shall not:
a. Provide credit to any Certificateholder for the purpose of
enabling such Certificateholder to purchase Certificates;
b. Purchase any Certificates in an agency or trustee capacity; or
c. Loan any money to the Trust.
SECTION 12.03. Maintenance of Office or Agency.
The Trustee will maintain in Minneapolis or St. Paul, Minnesota, an
office or agency where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and this Agreement may be served. On the date
hereof the Trustee's office for such purposes is located at ___________________
______________________, Minnesota 55___, Attention: Corporate Trust Department.
The Trustee will give prompt written notice to Certificateholders of any change
in the location of the Certificate Register or any such office or agency.
SECTION 12.04. Termination.
This Agreement shall terminate (after distribution of all Monthly
Principal and Monthly Interest due to Certificateholders pursuant to Sections
8.01 and 8.04) on the earlier of (a) the Payment Date on which the Principal
Balance is reduced to zero; or (b) the Payment Date on which the Company
repurchases the Contracts pursuant to Section 8.07; provided, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the
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United States to the Court of St. James, living on the date hereof, and
provided, further, that the Servicer's and the Company's representations and
warranties and indemnities by the Company and the Servicer shall survive
termination. Upon such termination, any amounts remaining in the Collection
Account shall be paid to the Servicer as part of its Servicing Fee.
SECTION 12.05. Acts of Certificateholders.
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver,
or other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Certificateholders with aggregate Fractional Interests representing 51% or
more of the Trust.
b. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where required, to the Servicer. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and (subject to Section 11.01)
conclusive in favor of the Trustee, the Servicer and the Company if made in the
manner provided in this Section.
c. The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
d. The ownership of Certificates shall be proved by the Certificate
Register.
e. Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done
by the Trustee, the Servicer or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
f. The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
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SECTION 12.06. Calculations.
Except as otherwise provided in this Agreement, all interest rate and
basis point calculations under this Agreement will be made on the basis of a
360-day year and twelve 30-day months and will be carried out to at least three
decimal places.
SECTION 12.07. Assignment or Delegation by Company.
Except as specifically authorized hereunder, and except for its
obligations as Servicer which are dealt with under Article V and Article VII,
the Company may not convey and assign or delegate any of its rights or
obligations hereunder absent the prior written consent of Certificateholders
with aggregate Fractional Interests representing 66-2/3% or more of the Trust,
and any attempt to do so without such consent shall be void.
SECTION 12.08. Amendment.
a. This Agreement may be amended from time to time by the Company,
the Servicer and the Trustee, without the consent of any of the
Certificateholders, to correct manifest error, to cure any ambiguity, to correct
or supplement any provisions herein or therein which may be inconsistent with
any other provisions herein or therein, as the case may be, or to add any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not adversely affect in any material respect the
interests of any Certificateholder, as evidenced by an opinion of Counsel for
the Company, which counsel shall be acceptable to the Initial Certificateholders
with aggregate Fractional Interests representing more than 50% of the Trust,
which acceptance shall not be unreasonably withheld. The Counsel to the Company
shall be deemed acceptable to the Initial Certificateholders with aggregate
Fractional Interests representing more than 50% of the Trust if Initial
Certificateholders with aggregate Fractional Interests representing more than
50% of the Trust shall have failed to object in writing to the engagement by the
Company of such Counsel for such purpose within seven (7) Business Days
following such Initial Certificateholders' receipt of a copy of the opinion of
such Counsel required by this Section 12.08(a), which copy shall be properly
addressed and mailed by certified first-class mail, return receipt requested or
sent by overnight courier service or delivered by personal delivery to such
Initial Certificateholder at the address shown in the Certificate Register.
b. This Agreement may also be amended from time to time by the
Servicer, the Company and the Trustee, with the consent of Certificateholders
with aggregate Fractional Interests representing 66-2/3% or more of the Trust,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificateholders and any Event of Termination may be
waived by
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Certificateholders with aggregate Fractional Interests representing 100% of the
Trust; provided, however, that no such amendment or waiver shall (a) reduce in
any manner the amount of, or delay the timing of, collections of payments on the
Contracts or distributions which are required to be made on any Certificate or
(b) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the holders of all Certificates then outstanding.
c. Promptly after the execution of any amendment or consent pursuant
to this Section 12.08, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and to Moody's.
d. It shall not be necessary for the consent of Certificateholders
under this Section 12.08 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
e. The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's own rights, duties or immunities
under this Agreement or otherwise.
f. In connection with any amendment pursuant to this Section, the
Trustee shall be entitled to receive an opinion of counsel to the Servicer to
the effect that such amendment is authorized or permitted by the Agreement.
g. Upon the execution of any amendment or consent pursuant to this
Section 12.08, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Holder of Certificates theretofore or thereafter issued hereunder
shall be bound thereby.
SECTION 12.09. Notices.
All communications and notices pursuant hereto to the Servicer, the
Company, and the Trustee shall be in writing and delivered or mailed to it at
the appropriate following address:
If to the Company or the Servicer:
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: 612/293-5746
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If to the Trustee:
-----------------------
-----------------------
-----------------------
-----------------------
If to Moody's:
Moody's Investors Service
99 Church Street
New York, New York 10007
Attention: ABS Monitoring Department
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder
shall be in writing and delivered or mailed at the address shown in the
Certificate Register.
SECTION 12.10. Merger and Integration.
Except as specifically stated otherwise herein, this Agreement sets
forth the entire understanding of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded by this
Agreement. This Agreement may not be modified, amended, waived, or supplemented
except as provided herein.
SECTION 12.11. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SECTION 12.12. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized
this ______ day of __________, 199_.
GREEN TREE FINANCIAL CORPORATION
Attest:
By:____________________________ By:_______________________________
Name:__________________________ Name:_____________________________
Title:_________________________ Title:____________________________
------------------------------------
not in its individual capacity but
Attest: solely as Trustee
By:____________________________ By:_______________________________
Name:__________________________ Name:_____________________________
Title:_________________________ Title:____________________________
Signature page to that certain Pooling and Servicing Agreement dated as of
______________, 199_ between Green Tree Financial Corporation, as Seller and
Servicer, and ________________________, as Trustee.
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EXHIBIT A
---------
CERTIFICATE FOR _____% ASSET BACKED CERTIFICATES
Green Tree Asset Receivables Trust 199_-_
Initial Principal Amount of the Trust: $___________
______% Pass-Through Rate
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT (AS DEFINED BELOW). THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY
NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH CERTIFICATE UNDER SUCH ACT AND LAWS OR UNLESS THE CONDITIONS
SET FORTH IN SECTION 9.02 OF THE AGREEMENT HAVE BEEN COMPLIED WITH.
THE PRINCIPAL REPRESENTED BY THIS CERTIFICATE IS PAYABLE IN
INSTALLMENTS, AS DESCRIBED HEREIN AND IN THE AGREEMENT. ACCORDINGLY, THE UNPAID
PRINCIPAL AMOUNT OF THE TRUST MAY BE LESS THAN THAT SET FORTH ABOVE. FINAL
PAYMENT OF THE CERTIFICATE MAY OCCUR PRIOR TO THE DATE THAT THE CERTIFICATE IS
PRESENTED TO THE TRUSTEE FOR CANCELLATION. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN THE CURRENT UNPAID PRINCIPAL AMOUNT REPRESENTED BY THIS CERTIFICATE BY
INQUIRY OF THE TRUSTEE.
No. ____________________________ $___________________________________
This certifies that __________________________________________________
is the registered owner of the undivided Fractional Interest represented by the
original principal amount set forth above in Green Tree Asset Receivables Trust
199_-_ (the "Trust"), which includes among its assets a pool of retail
installment contracts and promissory notes for the purpose of a variety of
consumer products [including but not limited to motorcycles; marine products
(including boats, boat trailers and outboard motors); pianos and organs; horse
trailers; sport vehicles (including snowmobiles, personal watercraft and all-
terrain vehicles); trucks; personal aircraft; and recreational vehicles
(including, without limitation, all security interests and any and all rights to
receive payments which are due pursuant thereto on or after ______________,
199_) (the "Contracts") and benefits under the Cash Collateral
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Account described herein. The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of ______________, 199_, between
Green Tree Financial Corporation, as Seller and Servicer (the "Company"), and
_____________________________, as Trustee of the Trust (the "Trustee"). This
Certificate is one of the Certificates described in the Agreement and is issued
pursuant and subject to the Agreement. By acceptance of this Certificate the
holder assents to and becomes bound by the Agreement. To the extent not defined
herein, all capitalized terms have the meanings assigned to such terms in the
Agreement.
The Agreement contemplates, subject to its terms, payment on the
fifteenth day (or if such day is not a Business Day, the next succeeding
Business Day) (the "Payment Date") of each calendar month commencing ________,
199_, so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Certificates with an aggregate initial Principal Balance
of at least $500,000, by wire transfer of immediately available funds pursuant
to instructions delivered to the Trustee at least 10 days prior to such Payment
Date) from funds drawn from the Collection Account to the registered
Certificateholder at the address appearing on the Certificate Register as of the
last Business Day immediately preceding such Payment Date, an amount equal to
the Certificateholder's Fractional Interest of Monthly Principal and Monthly
Interest. The final scheduled Payment Date of this Certificate is ________,
199_.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Collection Account (and to the
extent Available Funds have been deposited therein from the Cash Collateral
Account) to the extent available for distribution to the Certificateholder as
provided in the Agreement for payment hereunder and that the Trustee in its
individual capacity is not personally liable to the Certificateholder for any
amounts payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement. By
acceptance of this Certificate, the Certificateholder agrees to disclosure of
his, her or its name and address to other Certificateholders under the
conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee, at its Corporate Trust Department,
_______________________, Minnesota 55___.
"Monthly Interest" means, as of any Payment Date, the product of the
Pass-Through Rate and the Principal Balance immediately following the preceding
Payment Date, based on a 360-day year consisting of 12 months of 30 days each;
"Monthly Principal" means, as of any Payment Date, the sum of (a) the amount of
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regular principal payments on Contracts paid or applied during the prior
calendar month (each such month during the term of this Agreement constituting a
"Due Period") (other than the amount attributable to principal of any payment
received during such Due Period, if such payment was previously advanced as a
Delinquent Payment pursuant to Section 8.03 of the Agreement); (b) the amount of
full Principal Prepayments received and partial Principal Prepayments applied
during the prior Due Period; (c) the amount of Delinquent Payments during the
prior Due Period that is attributable to principal on the related Contracts,
which are advanced pursuant to Section 8.03; (d) the aggregate of the
outstanding principal balances of all Contracts that became Liquidated Contracts
during the prior Due Period; (e) the amount of the Repurchase Price paid by the
Company for any Contract repurchased on such Payment Date as described in
Section 8.05 of the Agreement that is attributable to the principal amount
outstanding on such Contract; (f) the amount of any reduction in the principal
amount owed by the Obligor as a result of the Obligor's bankruptcy; and (g) the
aggregate principal amount specified in clauses (a) through (f) above, for all
prior Payment Dates that was not previously distributed because of an
insufficient amount available in the Collection Account and the Cash Collateral
Account; and "Principal Balance" means, at any time, the Initial Principal
Amount minus all prior payments of Monthly Principal.
On each Payment Date the Trustee will direct the transfer of funds in
the Collection Account as necessary to make the following payments: (a)
reimbursement of the Servicer for Uncollectible Advances and prior Voluntary
Advances that have been recovered, (b) Monthly Interest, (c) Monthly Principal,
and (d) the Monthly Servicing Fee. Any Available Funds remaining in the
Collection Account after such distribution will be paid to the Depositor as the
Guarantee Fee, provided, however, that the Guarantee Fee shall be paid to the
Collateral Agent in accordance with Section 3(c) of the Guarantee Agreement for
deposit in the Cash Collateral Account or for distribution to the Depositor, as
the case may be.
As provided in the Agreement and subject to the limitations set forth
therein, the Company will repurchase a Contract by depositing the Repurchase
Price for such Contract into the Collection Account no later than one Business
Day after the Determination Date which is more than ninety days after the
Company becomes aware, or should have become aware or receives written notice
from the Trustee, of breach of a warranty of the Company set forth in Sections
3.02 and 3.03 of the Agreement that materially adversely affects the Trust's
interest in such Contract, which breach has not been cured (the Company's
obligation to repurchase such Contract constituting the Certificateholders' sole
remedy with respect to such a breach).
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Servicer, the Company and the Trustee with the consent of the holders of
Certificates evidencing 66-2/3% of the aggregate Fractional Interests. Any such
A-3
<PAGE>
consent by the holder of this Certificate shall be conclusive and binding on
such holder and upon all future holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of any of the Certificateholders.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
Minneapolis or St. Paul, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and upon receipt by the Trustee of either (i) evidence of the
effectiveness or continued effectiveness of a registration statement under the
Securities Act of 1933, as amended, with respect to this Certificate, and
registration under the applicable state laws, or (ii) a certificate in writing
of the transferee substantially in the form of Exhibit H to the Agreement and
satisfactory to the Company regarding the facts surrounding such disposition;
provided, however, that with respect to any transfer other then a transfer by
the Initial Certificateholder, at the election of the Company, the Company may,
in addition, require the delivery of an opinion of counsel satisfactory to the
Company (which shall not be at the expense of the Company or the Trustee) that
no such registration is required, and thereupon one or more new Certificates
evidencing the same aggregate Fractional Interest will be issued to the
designated transferee or transferees.
The Certificateholder, by acceptance of this Certificate, agrees to
present this Certificate to the Trustee for cancellation within 15 days of the
earlier of (a) ________, 199_ or (b) the Payment Date on which the Company
repurchases the Contracts pursuant to Section 8.07 of the Agreement. The
Certificateholder agrees to indemnify the Trustee, the Company, and the
Certificate Registrar against any liability that may result from the failure of
the Certificateholder to present this Certificate to the Trustee for
cancellation following final payment of the Certificate.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate Fractional Interest as
requested by the holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Certificate Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Company, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Company, the Servicer, the Trustee,
the Paying Agent or the Certificate Registrar may treat the person in whose name
this
A-4
<PAGE>
Certificate is registered as the owner hereof for all purposes, and neither the
Company, the Servicer, the Trustee, the Paying Agent, the Certificate Registrar
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate (after distribution of all Monthly
Principal and Monthly Interest) on the Payment Date (a) on which the Principal
Balance is reduced to zero or (b) on which the Company repurchases the Contracts
pursuant to Section 8.07 of the Agreement.
IN WITNESS WHEREOF, Green Tree Asset Receivables Trust 199_-_ has
caused this Certificate to be duly executed by the manual signature of a duly
authorized officer of the Trustee or of a duly appointed Authenticating Agent.
GREEN TREE ASSET RECEIVABLES TRUST 199_-_
Dated: ___________, 199_ ___________________________________________,
not in its individual capacity but solely as
Trustee
By_________________________________________
Authorized Officer
A-5
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ the within ______% Asset Backed Receivables
Certificate, Green Tree Asset Receivables Trust 199_-_, and does hereby
irrevocably constitute and appoint ______________________ Attorney to transfer
the said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
------------------------------------
Signature
A-6
<PAGE>
EXHIBIT B
---------
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of ______________, 199_, between the undersigned and
__________________________, as Trustee (the "Trustee"), the undersigned does
hereby transfer, convey and assign, set over and otherwise convey to Green Tree
Asset Receivables Trust 199_-_, created by the Agreement, to be held in trust as
provided in the Agreement, (i) all right, title and interest in the retail
installment contracts and promissory notes for the purpose of a variety of
consumer products [including but not limited to motorcycles; marine products
(including boats, boat trailers and outboard motors); pianos and organs; horse
trailers; sport vehicles (including snowmobiles, personal watercraft and all-
terrain vehicles); trucks; personal aircraft; and recreational vehicles
(including, without limitation, all security interests and any and all rights to
receive payments which are due pursuant thereto on or after ______________, 199_
but excluding any rights to receive payments which were due pursuant thereto
prior to ______________, 199_) identified in the List of Contracts delivered
pursuant to Section 2.02(a) of the Agreement and attached thereto as Exhibit H,
(ii) all rights under any hazard or other individual insurance policy on a
Product (as defined in Section 1.02 of the Agreement) securing a Contract for
the benefit of the creditor of such Contract, (iii) all rights under the Errors
and Omissions Protection Policy (as defined in Section 1.02 of the Agreement)
and (iv) all documents contained in the Contract Files (as defined in Section
1.02 of the Agreement).
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this _______ day of __________, 199_.
GREEN TREE FINANCIAL CORPORATION
[Seal] By_______________________________________
[Name]
[Title]
B-1
<PAGE>
EXHIBIT C
---------
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE OF OFFICER
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Minnesota corporation (the "Company"), and that as such he is
duly authorized to execute and deliver this certificate on behalf of the Company
in connection with the Pooling and Servicing Agreement dated as of
______________, 199_ (the "Agreement") between the Company
and___________________________, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
(i) the representations and warranties of the Company contained in Sections
3.01 and 3.04 of the Agreement are true and correct on and as of the date hereof
and, to the best of his knowledge, the representations and warranties of the
Company contained in Sections 3.02 and 3.03 of the Agreement are true and
correct on and as of the date hereof;
(ii) no event with respect to the Company has occurred and is continuing
which would constitute an Event of Termination or an event that with notice or
lapse of time or both would become an Event of Termination under the Agreement;
and
(iii) each of the agreements and conditions of the Company to be performed
on or before the date hereof pursuant to the Agreement have been performed in
all material respects.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
_____ day of __________, 199_.
By____________________________________________
[Name]
[Title]
C-1
<PAGE>
EXHIBIT D
---------
FORM OF OPINION OF COUNSEL
FOR THE COMPANY
The opinion of Dorsey & Whitney P.L.L.P. shall be to the effect that
(capitalized terms have the meanings set forth in the Pooling and Servicing
Agreement):
1. Green Tree is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Minnesota, with corporate power to
execute, deliver and perform its obligations under the Pooling and Servicing
Agreement, the Underwriting Agreement and the Certificates.
2. The Pooling and Servicing Agreement (including the Limited Guaranty
contained therein) and the Underwriting Agreement have been duly authorized by
all requisite corporate action, duly executed and delivered by Green Tree, and
constitute the valid and binding obligations of Green Tree enforceable in
accordance with their terms. The Certificates have been duly authorized by all
requisite corporate action and, when duly and validly executed by the Trustee in
accordance with the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing Agreement.
The participants to whose accounts The Depository Trust Company has credited the
Certificates have acquired all the Trust's rights in the Certificates free of
any adverse claim, assuming that such participants purchased the Certificates
for value and without notice of any adverse claim.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by Green Tree
for the consummation of the transactions contemplated by the Pooling and
Servicing Agreement and the Underwriting Agreement except such as may be
required under blue sky laws under any jurisdiction in connection with the
offering of the Certificates by the Underwriter pursuant to the Underwriting
Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Contracts to the Trustee, nor the issuance
or sale of the Certificates, nor the execution and delivery of the Pooling and
Servicing Agreement or the Underwriting Agreement, nor the consummation of any
other of the transactions contemplated in the Pooling and Servicing Agreement or
the Underwriting Agreement, or the consummation of any other of the transactions
D-1
<PAGE>
contemplated in the Pooling and Servicing Agreement or the Underwriting
Agreement, nor the fulfillment of the terms of the Certificates, the Pooling and
Servicing Agreement or the Underwriting Agreement by Green Tree will conflict
with, or result in a breach, violation or acceleration of, or constitute a
default under, any term or provision of the Restated Articles of Incorporation
or Bylaws of Green Tree or of any indenture or other agreement or instrument
known to us to which Green Tree is a party or by which it is bound, or result in
a violation of, or contravene the terms of any statute, order or regulation,
applicable to Green Tree, of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it.
6. There are no actions or proceedings pending or, to the best of our
knowledge, actions, proceedings or investigations pending or overtly threatened
against Green Tree before any court, administrative agency or other tribunal (A)
asserting the invalidity of the Underwriting Agreement, the Pooling and
Servicing Agreement, the Certificates, the hazard or flood insurance policies
applicable to any Contracts or the Errors and Omissions Protection Policy, (B)
seeking to prevent the issuance of the Certificates or the consummation of any
of the transactions contemplated by the Underwriting Agreement or the Pooling
and Servicing Agreement, (C) which is likely materially and adversely to affect
the performance by Green Tree of its obligations under, or the validity or
enforceability of, the Underwriting Agreement, the Pooling and Servicing
Agreement or the Certificates or (D) seeking adversely to affect the federal
income tax attributes of the Certificates described in the Prospectus and the
Prospectus Supplement under the heading "Certain Federal Income Tax
Consequences."
7. The transfer of the Contracts to the Trust in accordance with Section
2.01 of the Pooling and Servicing Agreement would not be avoidable as a
preferential transfer under Section 547 of the United States Bankruptcy Code (11
U.S.C. (S) 547), as in effect on the date hereof, in the event that Green Tree
became a debtor under the United States Bankruptcy Code.
8. Pursuant to the Pooling and Servicing Agreement Green Tree has
transferred to the Trustee acting on behalf of the Trust all of Green Tree's
right, title and interest in the Contracts, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Contracts, and has delivered the Contract Files to the Trustee or its
custodian. No filing or other action, other than the filing of a financing
statement on Form UCC-1 with the Secretary of State of the State of Minnesota
identifying the Contracts as collateral and naming Green Tree as debtor and the
Trust as secured party, and the filing of continuation statements as required by
Section 4.02 of the Pooling and Servicing Agreement, is necessary to perfect as
against third parties the assignment of the Contracts by Green Tree to the
Trust. We have separately provided you with our opinion concerning whether such
assignment could be recharacterized as a pledge rather than a sale in the event
Green Tree became a debtor under the United States
D-2
<PAGE>
Bankruptcy Code. However, in the event such assignment were characterized as a
pledge securing a loan from the Certificateholders to Green Tree, it is our
opinion that the Trustee would be deemed to have a valid and perfected first
priority security interest in the Contracts and the proceeds thereof, which
security interest would be prior to any other security interest that may be
perfected under the Uniform Commercial Code as in effect in the State of
Minnesota and over any "lien creditor" (as defined in Minn. Stat. (S)336.9-
301(3)) who becomes such after the Closing Date, except that a subsequent
purchaser of any Contract who gives new value and takes possession thereof in
the ordinary course of his business would have priority over the Trustee's
security interest in such Contract, if such purchaser acts without knowledge
that such Contract was subject to a security interest. We have assumed for the
purposes of this opinion that during the term of the Pooling and Servicing
Agreement the Trustee, or its custodian, shall maintain possession of the
Contract Files for the purpose of perfecting the assignment to the Trustee of
the Contracts. We express no opinion with respect to the enforceability of any
individual Contract or the existence of any claims, rights or other matters in
favor of any Obligor or the owner of any financed home improvement.
9. For federal income tax purposes, the Trust created pursuant to the
Pooling and Servicing Agreement will be treated as a grantor trust under Subpart
E, Part I, of Subchapter J of the Internal Revenue Code of 1986, as amended (the
"Code") and not as an association taxable as a corporation under the Code, and
under Section 671 of the Code, each Certificateholder will be treated as the
owner of an undivided pro rata interest in each of the Contracts in the Trust.
10. The transfer of the Contracts and the proceeds thereof by Green Tree
to the Trustee on the date hereof pursuant to the Pooling and Servicing
Agreement would not be avoidable as fraudulent transfers under the Uniform
Fraudulent Transfer Act as in effect in Minnesota on the date hereof (Minn.
Stat. (S)(S) 513.41 through 513.51), nor, should Green Tree become a debtor
under the United States Bankruptcy Code, as fraudulent transfers under Section
548 of the United States Bankruptcy Code (11 U.S.C. (S) 548) as in effect on the
date hereof.
D-3
<PAGE>
EXHIBIT E
---------
FORM OF TRUSTEE'S ACKNOWLEDGMENT
_______________________, a national banking association organized
under the laws of the United States, acting as trustee (the "Trustee") of Green
Tree Asset Receivables Trust 199_-_ (the "Trust") created pursuant to the
Pooling and Servicing Agreement dated as of ______________, 199_ between Green
Tree Financial Corporation and the Trustee (the "Agreement") (all capitalized
terms used herein without definition having the respective meanings specified in
the Agreement) acknowledges, pursuant to Section 2.03 of the Agreement, that the
Trustee has received (by conveyance in the form of Exhibit B to the Agreement)
the following: (i) all right, title and interest in the retail installment
contracts and promissory notes for the purpose of a variety of consumer products
[including but not limited to motorcycles; marine products (including boats,
boat trailers and outboard motors); pianos and organs; horse trailers; sport
vehicles (including snowmobiles, personal watercraft and all-terrain vehicles);
trucks; personal aircraft; and recreational vehicles (including, without
limitation, all security interests and any and all rights to receive payments
which are due pursuant thereto on or after ______________, 199_ but excluding
any rights to receive payments which were due pursuant thereto prior to
______________, 199_) identified in the List of Contracts delivered pursuant to
Section 2.02 of the Agreement, (ii) all rights under all hazard and other
individual insurance policies on every Product securing a Contract for the
benefit of the creditor of such Contract, (iii) all rights under the Errors and
Omissions Protection Policy, as such policy relates to the Contracts, and (iv)
all documents contained in the Contract Files (as defined in Section 1.02 of the
Agreement); provided that such Contract Files will be held by the Servicer, as
custodian, for the benefit of the Certificateholders and the Trustee.
IN WITNESS WHEREOF, __________________________, as Trustee, has caused
this acknowledgment to be executed by its duly authorized officer and its
corporate seal affixed hereto as of this ________ day of __________, 199_.
--------------------------------------------,
as Trustee
By
------------------------------------------
[Name]
[Title]
[Seal]
E-1
<PAGE>
EXHIBIT F
---------
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE OF SERVICING OFFICER
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Minnesota corporation (the "Company"), and that as such he is
duly authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of ___________, 199_ between the Company and
______________________, as Trustee of Green Tree Asset Receivables Trust 199_-_
(all capitalized terms used herein without definition having the respective
meanings specified in the Agreement), and further certifies that:
1. The Monthly Report for the period from _____________ to__________
attached to this certificate is complete and accurate in accordance with the
requirements of Sections 6.01 and 6.02 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
_________ day of __________, 199_.
GREEN TREE FINANCIAL CORPORATION
By
------------------------------------
[Name]
[Title]
F-1
<PAGE>
EXHIBIT G
---------
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Minnesota corporation (the "Company"), and that as such he is
duly authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 8.06 of the Pooling and Servicing Agreement (the
"Agreement") dated as of ____________, 199_ between the Company and
_____________________, as Trustee of Green Tree Asset Receivables Trust 199_-_
(all capitalized terms used herein without definition having the respective
meanings specified in the Agreement), and further certifies that:
1. The Contracts on the attached schedule are to be repurchased by
the Company on the date hereof pursuant to Sections 8.05 or 8.07 of the
Agreement.
2. Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to Section 8.06 or Section 8.07 of the Agreement, be
assigned by the Trustee to the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
______ day of __________, 199_.
GREEN TREE FINANCIAL CORPORATION
By
-----------------------------
[Name]
[Title]
G-1
<PAGE>
EXHIBIT H
---------
LIST OF CONTRACTS
[TO BE SUPPLIED]
H-1
<PAGE>
EXHIBIT I
---------
CERTIFICATES FOR PRODUCT CONTRACTS
GREEN TREE ASSET RECEIVABLES TRUST 199_-_
_____% PASS THROUGH RATE
MONTHLY REPORT
Distribution Date: __________
Trust Account No ____________
<TABLE>
<CAPTION>
A. Monthly Principal
<S> <C> <C>
(1) Regular Principal Payments $__________
(2) Principal Prepayments __________
(3) Delinquent Payments Advanced __________
(4) Defaulted Contracts __________
(5) Breach of Representations and
Warranties (see attached) __________
(6) Delinquent Payments Recovered __________
(7) Reduction due to Obligors' bankruptcy __________
Total Principal $__________
B. Monthly Interest $__________
C. Remaining Principal Balance $__________
D. Loss Ratios
(1) Quarterly Loss Ratio __________
(2) Cumulative Loss Ratio __________
E. Servicing Fee
(1) Monthly Servicing Fee $__________
(2) Late Payment Fees $__________
(3) Extension Fees $__________
F. Pool Factor
(1) Pool Factor immediately before Payment Date $__________
(2) Pool Factor immediately after Payment Date $__________
G. Delinquency
(1) Contracts Delinquent (see attached)
(a) One Day or More #__________ $__________
(b) 31-59 Days #__________ $__________
(c) 60-89 Days #__________ $__________
(d) 90 or More Days #__________ $__________
(2) Delinquency Ratio __________
H. Liquidated Contracts (see attached) __________
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
I. Net Liquidation Losses $__________
J. Delinquent Payments Recovered $__________
K. Unreimbursed Losses $__________
L. Number of Loans Remaining $__________
M. Weighted Average Remaining Maturity __________
N. Weighted Average Contracted Rate of Interest __________
</TABLE>
I-2
<PAGE>
EXHIBIT 4.2
SALE AND SERVICING AGREEMENT
Dated as of ____________ 1, 199_
among
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
Issuer
GREEN TREE FINANCIAL CORPORATION
Seller and Servicer
and
_________________________________________________
Backup Servicer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INTRODUCTION.............................................................. 1
ARTICLE I DEFINITIONS................................................. 1
Section 1.1. Definitions............................................ 1
Section 1.2. Usage of Terms......................................... 25
Section 1.3. Calculations........................................... 25
Section 1.4. Section References..................................... 25
Section 1.5. No Recourse............................................ 25
ARTICLE II CONVEYANCE OF CONTRACTS..................................... 25
Section 2.1. Conveyance of Initial Contracts........................ 25
Section 2.2. Custody of Contract Files.............................. 26
Section 2.3. Conditions to Acceptance by Owner Trustee.............. 27
Section 2.4. Conveyance of Subsequent Contracts..................... 28
Section 2.5. Representations and Warranties of Seller............... 31
Section 2.6. Repurchase of Contracts Upon Breach of
Warranty............................................... 32
Section 2.7. Nonpetition Covenant................................... 33
Section 2.8. Collecting Evidence of Perfection Not
Delivered on the Closing Date or Subsequent Transfer
Date................................................... 33
Section 2.9. Trust's Assignment of Administrative Contracts and
Warranty Contracts..................................... 34
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS................... 34
Section 3.1. Duties of the Servicer................................. 34
Section 3.2. Collection of Contract Payments; Modifications of
Contracts.............................................. 36
Section 3.3. Realization Upon Contracts............................. 37
Section 3.4. Insurance.............................................. 38
Section 3.5. Maintenance of Security Interests in Products.......... 39
Section 3.6. Covenants, Representations, and Warranties of Servicer. 40
Section 3.7. Purchase of Contracts Upon Breach of Covenant.......... 42
Section 3.8. Total Servicing Fee; Payment of Certain Expenses by
Servicer............................................... 43
Section 3.9. Servicer's Certificate................................. 43
Section 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event...................................... 44
Section 3.11. Annual Independent Accountants' Report................. 44
Section 3.12. Access to Certain Documentation and Information
Regarding Contracts.................................... 45
Section 3.13. Monthly Tape........................................... 45
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 3.14. Retention and Termination of Servicer.................. 46
Section 3.15. Fidelity Bond.......................................... 46
Section 3.16. Duties of the Servicer under the Indenture............. 46
Section 3.17. Certain Duties of the Servicer under the Trust
Agreement.............................................. 48
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS................................................. 48
Section 4.1. Trust Accounts......................................... 48
Section 4.2. Collections............................................ 50
Section 4.3. Application of Collections............................. 50
Section 4.4. Monthly Advances....................................... 51
Section 4.5. Additional Deposits.................................... 52
Section 4.6. Distributions.......................................... 52
Section 4.7. Pre-Funding Account.................................... 53
Section 4.8. Net Deposits........................................... 54
Section 4.9. Statements to Certificateholders and Noteholders....... 55
Section 4.10. Indenture Trustee as Agent............................. 57
Section 4.11. Eligible Accounts...................................... 57
ARTICLE V THE RESERVE ACCOUNT......................................... 57
Section 5.1. Withdrawals from the Reserve Account................... 57
ARTICLE VI THE SELLER.................................................. 58
Section 6.1. Liability of Seller.................................... 58
Section 6.2. Limitation on Liability of Seller and Others........... 58
Section 6.3. Seller May Own Certificates or Notes................... 58
ARTICLE VII THE SERVICER................................................ 59
Section 7.1. Liability of Servicer; Indemnities..................... 59
Section 7.3. Limitation on Liability of Servicer, Backup Servicer
and Others............................................. 61
Section 7.4. Delegation of Duties................................... 62
Section 7.5. Servicer and Backup Servicer Not to Resign............. 62
ARTICLE VIII SERVICER TERMINATION EVENTS................................. 63
Section 8.1. Servicer Termination Event............................. 63
Section 8.2. Consequences of a Servicer Termination Event........... 64
Section 8.3. Appointment of Successor............................... 65
Section 8.4. Notification to Certificateholders and Noteholders..... 66
Section 8.5. Waiver of Past Defaults................................ 66
ARTICLE IX TERMINATION................................................. 66
Section 9.1. Optional Purchase of All Contracts; Liquidation of
Trust Estate........................................... 66
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE X MISCELLANEOUS PROVISIONS................................... 68
Section 10.1. Amendment.............................................. 68
Section 10.2. Protection of Title to Trust Property.................. 69
Section 10.3. Governing Law.......................................... 71
Section 10.4. Severability of Provisions............................. 71
Section 10.5. Assignment............................................. 72
Section 10.6. Third-Party Beneficiaries.............................. 72
Section 10.7. Counterparts........................................... 72
Section 10.8. Intention of Parties................................... 72
Section 10.9. Notices................................................ 72
Section 10.10. Limitation of Liability................................ 73
</TABLE>
-iii-
<PAGE>
SCHEDULES
Schedule A -- Representations and Warranties of Seller
Schedule B -- Servicing Policies and Procedures
EXHIBITS
Exhibit A -- Schedule of Initial Contracts
Exhibit B-1 -- Form of Custodian Agreement (Seller)
Exhibit B-2 -- Form of Custodian Agreement (Other)
Exhibit C -- Form of Servicer's Certificate
Exhibit D -- Form of Subsequent Transfer Agreement
-iv-
<PAGE>
THIS SALE AND SERVICING AGREEMENT, dated as of _______ 1, 199_, is
made among Green Tree Asset Receivables Trust, 199_-_ (the "Issuer"), Green Tree
Financial Corporation, a Delaware corporation, as Seller (in its capacity as
Seller, the "Seller") and as Servicer (in its capacity as Servicer, the
"Servicer") and ___________________, a ____________________________, as Backup
Servicer (the "Backup Servicer").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All terms defined in the Indenture or the
Trust Agreement (each as defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
Accountants' Report: The report of a firm of nationally recognized
independent accountants described in Section 3.11.
Accounting Date: With respect to a Distribution Date, the last day of
the Monthly Period immediately preceding such Distribution Date.
Actual Funds: With respect to a Distribution Date, the sum of (i)
Available Funds for such Distribution Date, plus (ii) the portion of the Reserve
Amount, if any, deposited pursuant to Section 5.1(a) into the Collection Account
with respect to such Distribution Date.
Addition Notice: With respect to any transfer of Subsequent Contracts
to the Trust pursuant to Section 2.4, a notice, which shall be given not later
than 15 days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Contracts to be transferred to the Issuer and the
aggregate Principal Balance of such Subsequent Contracts.
Administrative Contract: With respect to any Monthly Period, a
Contract which the Servicer is required to purchase pursuant to Section 3.7 or
which the Servicer has elected to purchase pursuant to Section 3.4(c).
Affiliate: With respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used
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with respect to any specified Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Aggregate Principal Balance: With respect to any Determination Date,
the sum of the Principal Balances (computed as of the related Accounting Date)
for all Contracts (other than (i) any Contract that became a Liquidated Contract
during the related Monthly Period and (ii) any Contract that became a Purchased
Contract as of the immediately preceding Accounting Date).
Agreement or "this Agreement": This Sale and Servicing Agreement, all
amendments and supplements thereto and all exhibits and schedules to any of the
foregoing.
Amount Financed: With respect to a Contract, the aggregate amount
advanced under such Contract toward the purchase price of the Financed Product
and related costs, including amounts advanced in respect of accessories,
insurance premiums, service and warranty contracts, other items customarily
financed as part of retail installment sale contracts or promissory notes for
purchase of goods similar to the Products, and related costs. The term "Amount
Financed" shall not include any Insurance Add-On Amounts.
Annual Percentage Rate or APR: With respect to a Contract, the rate
per annum of finance charges stated in such Contract as the "annual percentage
rate" (within the meaning of the Federal Truth-in-Lending Act). If after the
Closing Date, the rate per annum with respect to a Contract as of the Closing
Date is reduced as a result of (i) an insolvency proceeding involving the
Obligor or (ii) pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940,
Annual Percentage Rate or APR shall refer to such reduced rate.
Available Funds: With respect to any Determination Date, the sum of
(i) the Collected Funds for such Determination Date, (ii) all Purchase Amounts
deposited in the Collection Account as of the related Deposit Date, (iii) all
Monthly Advances made by the Servicer as of the related Deposit Date, and (iv)
all net income from investments of funds in the Trust Accounts and the
Certificate Distribution Account during the related Monthly Period.
Backup Servicer: _________________________________, or its
successor in interest pursuant to Section 8.2, or such Person as shall have been
appointed as Backup Servicer or successor Servicer pursuant to Section 8.3.
Basic Servicing Fee: With respect to any Monthly Period, the fee
payable to the Servicer for services rendered during such Monthly Period, which
shall be equal to one-twelfth of the Basic Servicing Fee Rate multiplied by the
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Aggregate Principal Balance as of the Determination Date falling in such Monthly
Period.
Basic Servicing Fee Rate: 1.00% per annum, payable monthly at one-
twelfth of the annual rate.
Business Day: Any day other than a Saturday, Sunday, legal holiday or
other day on which commercial banking institutions in Minneapolis, Minnesota,
New York, New York, Wilmington, Delaware or any other location of any successor
Servicer, successor Owner Trustee OR successor Indenture Trustee are authorized
or obligated by law, executive order or governmental decree to be closed.
Certificate Distribution Account: The meaning assigned to such term
in the Trust Agreement.
Certificate Majority: As to each class of Certificates, Holders of
Certificates of such class representing more than 50% of the Class B Certificate
Balance or more than 50% of the Notional Balance, as applicable.
Certificateholders' Distributable Amount: With respect to any
Distribution Date, the sum of the Class B Interest Distributable Amount, the
Class B Principal Distributable Amount and the Class B Prepayment Amount (if
any).
Certificateholders' Percentage: (i) with respect to any Determination
Date relating to a Distribution Date prior to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, 0%; (ii) with
respect to the Determination Date relating to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, 0% with respect to
that portion of the Principal Distribution Amount equal to the unpaid principal
balance of the Class A-1 Notes, and 100% minus the Noteholders' Percentage as
of such Determination Date (computed after giving effect to the retirement of
the Class A-1 Notes) with respect to the remaining portion of the Principal
Distribution Amount; (iii) with respect to any Determination Date relating to a
Distribution Date after the Distribution Date on which the principal balance of
the Class A-1 Notes is reduced to zero, 100% minus the Noteholders' Percentage
as of such Determination Date.
Class A-1 Final Scheduled Distribution Date: _______, 199_ (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
Class A-1 Holdback Amount: As of any Subsequent Transfer Date, an
amount equal to ____% of the amount, if any, by which the applicable "Target
Original Pool Balance" specified below is greater than the Original Pool Balance
after giving effect to the transfer of Subsequent Contracts on such Subsequent
Transfer Date:
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Subsequent Transfer Date Target Original Pool Balance
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Class A-1 Holdback Subaccount: The subaccount of the Reserve
Account, the funds in which shall consist of all Class A-1 Holdback Amounts
deposited therein during the Funding Period, other than investment earnings
thereon. Any funds in the Class A-1 Holdback Subaccount shall be withdrawn on
the Class A-1 Final Scheduled Distribution Date and distributed as specified in
Section 5.1(b).
Class A-1 Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class A-1 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-1 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-1 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-1 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
Class A-1 Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-1 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-1 Interest Carryover
Shortfall for such Distribution Date.
Class A-1 Interest Rate: _____% per annum.
Class A-1 Monthly Interest Distributable Amount: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class A-1 Interest Rate on the outstanding
principal balance of the Class A-1 Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to Class
A-1 Noteholders on or prior to such immediately preceding Distribution Date.
Class A-1 Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
A-1 Noteholders' pro rata share (based on the respective current outstanding
principal balance of each class of Notes and the current Class B Certificate
Balance) of the Pre-Funded Amount as of such Distribution Date.
Class A-1 Prepayment Premium: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount
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of interest that would accrue on the Class A-1 Prepayment Amount at the Class
A-1 Interest Rate during the period commencing on and including the
Distribution Date on which the Class A-1 Prepayment Amount is required to be
deposited in the Note Distribution Account pursuant to Section 4.7 to but
excluding _______, 199_, over (ii) the amount of interest that would have
accrued on the Class A-1 Prepayment Amount over the same period at a per annum
rate of interest equal to the bond equivalent yield to maturity on the
Determination Date preceding such Distribution Date on the United States
Treasury Bill due _______, 199_. Such excess shall be discounted to present
value to such Distribution Date at the yield described in clause (ii) above.
Class A-2 Final Scheduled Distribution Date: _______, 199_ (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
Class A-2 Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class A-2 Interest Distributable Amount
for the preceding Distribution Date, over the amount in respect of interest on
the Class A-2 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-2 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-2 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
Class A-2 Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-2 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-2 Interest Carryover
Shortfall for such Distribution Date.
Class A-2 Interest Rate: _____% per annum.
Class A-2 Monthly Interest Distributable Amount: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class A-2 Interest Rate on the outstanding
principal balance of the Class A-2 Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to Class
A-2 Noteholders on or prior to such immediately preceding Distribution Date.
Class A-2 Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
A-2 Noteholders' pro rata share (based on the respective current outstanding
principal balance of each class of Notes and the current Class B Certificate
Balance) of the Pre-Funded Amount as of such Distribution Date.
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Class A-2 Prepayment Premium: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class A-2 Prepayment Amount at the Class A-2
Interest Rate during the period commencing on and including the Distribution
Date on which the Class A-2 Prepayment Amount is required to be deposited in
the Note Distribution Account pursuant to Section 4.7 to but excluding _______,
199_, over (ii) the amount of interest that would have accrued on the Class A-2
Prepayment Amount over the same period at a per annum rate of interest equal to
the yield to maturity on the Determination Date preceding such Distribution Date
on the U.S. Treasury Bill due _______, 199_. Such excess shall be discounted to
present value to such Distribution Date at the yield described in clause (ii)
above.
Class A-3 Final Scheduled Distribution Date: _______, 199_ (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
Class A-3 Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class A-3 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-3 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-3 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-3 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
Class A-3 Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-3 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-3 Interest Carryover
Shortfall for such Distribution Date.
Class A-3 Interest Rate: _____% per annum.
Class A-3 Monthly Interest Distributable Amount: With respect to
any Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class A-3 Interest Rate on the outstanding
principal balance of the Class A-3 Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to Class
A-3 Noteholders on or prior to such immediately preceding Distribution Date.
Class A-3 Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
A-3 Noteholders' pro rata share (based on the respective current outstanding
principal balance of each class of Notes and the current Class B Certificate
Balance) of the Pre-Funded Amount as of such Distribution Date.
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Class A-3 Prepayment Premium: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class A-3 Prepayment Amount at the Class A-3
Interest Rate during the period commencing on and including the Distribution
Date on which the Class A-3 Prepayment Amount is required to be deposited in
the Note Distribution Account pursuant to Section 4.7 to but excluding August
31, 1997, over (ii) the amount of interest that would have accrued on the Class
A-3 Prepayment Amount over the same period at a per annum rate of interest
equal to the yield to maturity on the Determination Date preceding such
Distribution Date on the _____% U.S. Treasury Note due _______, 199_. Such
excess shall be discounted to present value to such Distribution Date at the
yield described in clause (ii) above.
Class A-4 Final Scheduled Distribution Date: _______, 199_ (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
Class A-4 Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class A-4 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-4 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-4 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-4 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
Class A-4 Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-4 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-4 Interest Carryover
Shortfall for such Distribution Date.
Class A-4 Interest Rate: _____% per annum.
Class A-4 Monthly Interest Distributable Amount: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class A-4 Interest Rate on the outstanding
principal balance of the Class A-2 Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to Class
A-4 Noteholders on or prior to such immediately preceding Distribution Date.
Class A-4 Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
A-4 Noteholders' pro rata share (based on the respective current outstanding
principal balance of each class of Notes and the current Class B Certificate
Balance) of the Pre-Funded Amount as of such Distribution Date.
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Class A-4 Prepayment Premium: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class A-4 Prepayment Amount at the Class A-4
Interest Rate during the period commencing on and including the Distribution
Date on which the Class A-4 Prepayment Amount is required to be deposited in
the Note Distribution Account pursuant to Section 4.7 to but excluding _______,
199_, over (ii) the amount of interest that would have accrued on the Class A-4
Prepayment Amount over the same period at a per annum rate of interest equal to
the yield to maturity on the Determination Date preceding such Distribution Date
on the ______% U.S. Treasury Note due _______, 199_. Such excess shall be
discounted to present value to such Distribution Date at the yield described in
clause (ii) above.
Class A-5 Final Scheduled Distribution Date: _______, 199_ (or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
Class A-5 Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class A-5 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-5 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-5 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-5 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
Class A-5 Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-5 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-5 Interest Carryover
Shortfall for such Distribution Date.
Class A-5 Interest Rate: _____% per annum.
Class A-5 Monthly Interest Distributable Amount: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class A-5 Interest Rate on the outstanding
principal balance of the Class A-5 Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to Class
A-5 Noteholders on or prior to such immediately preceding Distribution Date.
Class A-5 Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
A-5 Noteholders' pro rata share (based on the respective current outstanding
principal balance of each class of Notes and the current Class B Certificate
Balance) of the Pre-Funded Amount as of such Distribution Date.
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Class A-5 Prepayment Premium: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class A-5 Prepayment Amount at the Class A-5
Interest Rate during the period commencing on and including the Distribution
Date on which the Class A-5 Prepayment Amount is required to be deposited in
the Note Distribution Account pursuant to Section 4.7 to but excluding _______,
199_, over (ii) the amount of interest that would have accrued on the Class A-5
Prepayment Amount over the same period at a per annum rate of interest equal to
the yield to maturity on the Determination Date preceding such Distribution Date
on the ______% U.S. Treasury Note due _______, 199_. Such excess shall be
discounted to present value to such Distribution Date at the yield described in
clause (ii) above.
Class A-6 Final Scheduled Distribution Date: _______, 199_(or, if
such day is not a Business Day, the next succeeding Business Day thereafter).
Class A-6 Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class A-6 Interest Distributable Amount
for the preceding Distribution Date over the amount in respect of interest on
the Class A-6 Notes that was actually deposited in the Note Distribution
Account on such preceding Distribution Date, plus interest on the amount of
interest due but not paid to Class A-6 Noteholders on the preceding
Distribution Date, to the extent permitted by law, at the Class A-6 Interest
Rate from such preceding Distribution Date to but excluding the current
Distribution Date.
Class A-6 Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-6 Monthly Interest Distributable
Amount for such Distribution Date and the Class A-6 Interest Carryover
Shortfall for such Distribution Date.
Class A-6 Interest Rate: _____% per annum.
Class A-6 Monthly Interest Distributable Amount: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class A-6 Interest Rate on the outstanding
principal balance of the Class A-6 Notes on the immediately preceding
Distribution Date, after giving effect to all payments of principal to Class
A-6 Noteholders on or prior to such immediately preceding Distribution Date.
Class A-6 Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
A-6 Noteholders' pro rata share (based on the respective current outstanding
principal balance of each class of Notes and the current Class B Certificate
Balance) of the Pre-Funded Amount as of such Distribution Date.
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Class A-6 Prepayment Premium: An amount computed by the Servicer
equal to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class A-6 Prepayment Amount at the Class A-6
Interest Rate during the period commencing on and including the Distribution
Date on which the Class A-6 Prepayment Amount is required to be deposited in
the Note Distribution Account pursuant to Section 4.7 to but excluding _______,
199_, over (ii) the amount of interest that would have accrued on the Class A-6
Prepayment Amount over the same period at a per annum rate of interest equal to
the yield to maturity on the Determination Date preceding such Distribution Date
on the _____% U.S. Treasury Note due _______, 199_. Such excess shall be
discounted to present value to such Distribution Date at the yield described in
clause (ii) above.
Class B Certificate Balance: As of any date, $________ less all
amounts previously distributed to Class B Certificateholders in respect of
principal.
Class B Certificates: The Class B Trust Certificates (as defined in
the Trust Agreement).
Class B Final Scheduled Distribution Date: _______, 199_ (or, if such
day is not a Business Day, the next succeeding Business Day thereafter).
Class B Interest Carryover Shortfall: With respect to any
Distribution Date, the excess of the Class B Interest Distributable Amount for
the preceding Distribution Date over the amount in respect of interest on the
Class B Certificates that was actually deposited in the Certificate Distribution
Account on such preceding Distribution Date, plus interest on such excess, to
the extent permitted by law, at the Class B Pass-Through Rate from such
preceding Distribution Date to but excluding the current Distribution Date.
Class B Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class B Monthly Interest Distributable Amount
for such Distribution Date and the Class B Interest Carryover Shortfall for such
Distribution Date.
Class B Monthly Interest Distributable Amount: With respect to any
Distribution Date, 30 days of interest (or, in the case of the first
Distribution Date, interest accrued from and including the Closing Date to but
excluding _______, 199_) at the Class B Pass-Through Rate on the Class B
Certificate Balance as of the close of business on the preceding Distribution
Date (or, in the case of the first Distribution Date, on the Closing Date).
Class B Monthly Principal Distributable Amount: With respect to any
Distribution Date, the Certificateholders' Percentage of the Principal
Distribution Amount plus, with respect to the Distribution Date on which the
Class A-1 Note Balance is reduced to zero, the Certificateholders' Percentage
(calculated after giving effect to the retirement of the Class A-1 Notes on
such Distribution Date) of the
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remainder of the Principal Distribution Amount after payment of the remaining
principal balance of the Class A-1 Notes on such Distribution Date, plus, with
respect to the Distribution Date on which the outstanding principal balance of
the Class A-6 Notes is reduced to zero, the remainder of the Principal
Distribution Amount on such Distribution Date.
Class B Pass-Through Rate: _____% per annum.
Class B Pool Factor: With respect to any Distribution Date, an eight
digit decimal figure equal to the Class B Certificate Balance as of such
Distribution Date (after giving effect to distributions on such Distribution
Date) divided by the Class B Certificate Balance as of the Closing Date.
Class B Prepayment Amount: As of the Distribution Date on or
immediately following the last day of the Funding Period, after giving effect to
any transfer of Subsequent Contracts on such date, an amount equal to the Class
B Certificateholders' pro rata share (based on the respective current
outstanding principal balance of each class of Notes and the current Class B
Certificate Balance) of the Pre-Funded Amount as of such Distribution Date.
Class B Prepayment Premium: An amount computed by the Servicer equal
to the excess, if any, discounted as described below, of (i) the amount of
interest that would accrue on the Class B Prepayment Amount at the Class B Pass-
Through Rate during the period commencing on and including the Distribution Date
on which the Class B Prepayment Amount is required to be deposited in the
Certificate Distribution Account pursuant to Section 4.7(b) to but excluding
_______, 199_, over (ii) the amount of interest that would have accrued on the
Class B Prepayment Amount over the same period at a per annum rate of interest
equal to the yield to maturity on the Determination Date preceding such
Distribution Date on the _____% U.S. Treasury Note due _______, 199_. Such
excess shall be discounted to present value to such Distribution Date at the
yield described in clause (ii) above.
Class B Principal Carryover Shortfall: As of the close of any
Distribution Date, the excess of the sum of the Class B Principal Distributable
Amount over the amount in respect of principal that was actually deposited in
the Certificate Distribution Account on such Distribution Date.
Class B Principal Distributable Amount: With respect to any
Distribution Date (other than the Final Scheduled Distribution Date), the sum of
the Class B Monthly Principal Distributable Amount for such Distribution Date
and any Class B Principal Carryover Shortfall as of the close of the preceding
Distribution Date; provided, however, that the Class B Principal Distributable
Amount shall not exceed the Class B Certificate Balance. The "Class B
Principal Distributable Amount" on the Final Scheduled Distribution Date will
equal the Class B Certificate Balance as of the Final Scheduled Distribution
Date.
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Closing Date: _______, 199_.
Collected Funds: With respect to any Determination Date, the amount
of funds in the Collection Account representing collections on the Contracts
during the related Monthly Period, including all Liquidation Proceeds collected
during the related Monthly Period (but excluding any Monthly Advances and any
Purchase Amounts).
Collection Account: The account designated as the Collection Account
in, and which is established and maintained pursuant to, Section 4.1(a).
Collection Records: All manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Contracts.
Computer Tape: The computer tape generated on behalf of the Seller
which provides information relating to the Contracts and which was used by the
Seller in selecting the Contracts conveyed to the Trust hereunder.
Contract: A retail installment sale contract or promissory note (and
related security agreement) for a new or used Product (and all accessories
thereto) that is included in the Schedule of Contracts, and all rights and
obligations under such a contract, but not including (i) any Liquidated Contract
(other than for purposes of calculating Certificateholders' Distributable
Amounts and Noteholders' Distributable Amounts hereunder and for the purpose of
determining the obligations pursuant to Section 2.6 and 3.7 to purchase
Contracts), or (ii) any Purchased Contract on or after the Accounting Date
immediately preceding the Deposit Date on which payment of the Purchase Amount
is made in connection therewith pursuant to Section 4.5.
Contract File: The documents, electronic entries, instruments and
writings listed in Section 2.2 pertaining to a particular Contract.
Corporate Trust Office: With respect to the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the Closing Date
is located at ______________________________________________________, Attention:
Corporate Trust Administration; the telecopy number for the Corporate Trust
Office of the Owner Trustee on the date of the execution of this Agreement is
___________; with respect to the Indenture Trustee, the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office is located at _____________________________,
Attention: Corporate Trust Department; the telecopy number for the Corporate
Trust Office of the Indenture Trustee on the date of execution of this Agreement
is __________.
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Cram Down Loss: With respect to a Contract, if a court of appropriate
jurisdiction in an insolvency proceeding shall have issued an order reducing the
Principal Balance of such Contract, the amount of such reduction. A "Cram Down
Loss" shall be deemed to have occurred on the date of issuance of such order.
Custodian: Green Tree and any other Person named from time to time as
custodian in any Custodian Agreement acting as agent for the Trust.
Custodian Agreement: Any Custodian Agreement from time to time in
effect between the Custodian named therein and the Trust, substantially in the
form of Exhibit B-1 or B-2 hereto, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
Dealer: A seller of new or used Products that originated one or more
of the Contracts and sold the respective Contract, directly or indirectly, to
Green Tree under an existing agreement between such seller and Green Tree.
Dealer Agreement: An agreement between Green Tree and a Dealer
relating to the sale of retail installment sale contracts and installment notes
to Green Tree and all documents and instruments relating thereto.
Dealer Assignment: With respect to a Contract, the executed
assignment executed by a Dealer conveying such Contract to Green Tree.
Deficiency Claim Date: With respect to any Distribution Date, the
fourth Business Day immediately preceding such Distribution Date.
Deposit Date: With respect to any Monthly Period, the Business Day
immediately preceding the related Determination Date.
Depositary Agreements: Each of the Depositary Agreement as defined in
the Indenture and the Depositary Agreement as defined in the Trust Agreement.
Determination Date: With respect to any Monthly Period, the sixth
Business Day immediately preceding the related Distribution Date.
Distribution Date: The 15th day of each calendar month, or if such
15th day is not a Business Day, the next succeeding Business Day, commencing
_______, 199_ to and including the Final Scheduled Distribution Date.
Draw Date: With respect to any Distribution Date, the third Business
Day immediately preceding such Distribution Date.
Electronic Ledger: The electronic master record of the retail
installment sales contracts or installment loans of Green Tree.
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Eligible Account: A segregated direct deposit account maintained with
a depository institution or trust company organized under the laws of the United
States of America, or any of the States thereof, or the District of Columbia,
having a certificate of deposit, short term deposit or commercial paper rating
of at least "A-1+" by Standard & Poor's and "P-1" by Moody's.
Eligible Investments are any of the following:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, the Federal Home Loan Mortgage Corporation,
the Federal National Mortgage Association, or any agency or instrumentality
of the United States of America the obligations of which are backed by the
full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or any
Affiliate of the Indenture Trustee, acting in its commercial capacity)
incorporated under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or contractual
commitment providing for such investment, the commercial paper or other
short-term debt obligations of such depository institution or trust company
(or, in the case of a depository institution which is the principal
subsidiary of a holding company, the commercial paper or other short-term
debt obligations of such holding company) are rated at least A--1 by
Standard & Poor's and (B) any other demand or time deposit or certificate
of deposit which is fully insured by the Federal Deposit Insurance
Corporation;
(iii) shares of an investment company registered under the
Investment Company Act of 1940, whose shares are registered under the
Securities Act of 1933 and rated AAAm or AAAm-G by Standard & Poor's, and
whose only investments are in securities described in clauses (i) and (ii)
above;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America
or any State thereof which have a credit rating of at least AAA from
Standard & Poor's at the time of such investment; provided, however, that
securities
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issued by any particular corporation will not be Eligible Investments to
the extent that investment therein will cause the then outstanding
principal amount of securities issued by such corporation and held as part
of the corpus of the Trust to exceed 10% of amounts held in the Certificate
Account; and
(vi) commercial paper having a rating of at least A--1 from
Standard & Poor's at the time of such investment or pledge as security.
The Indenture Trustee may trade with itself or an Affiliate in the purchase or
sale of such Eligible Investments.
Eligible Servicer: Green Tree, the Backup Servicer or another Person
which at the time of its appointment as Servicer (i) is servicing a portfolio of
retail installment sales contracts and/or installment loans for goods similar to
the Products, (ii) is legally qualified and has the capacity to service the
Contracts, (iii) has demonstrated the ability professionally and competently to
service a portfolio of retail installment sales contracts and/or installment
loans, for goods similar to the Products, similar to the Contracts with
reasonable skill and care, and (iv) is qualified and entitled to use, pursuant
to a license or other written agreement, and agrees to maintain the
confidentiality of, the software which the Servicer uses in connection with
performing its duties and responsibilities under this Agreement or otherwise has
available software which is adequate to perform its duties and responsibilities
under this Agreement.
Evidence of Perfection: (i) with respect to any Product for which a
certificate of title is issued, a Lien Certificate; (ii) with respect to any
Product subject to a state or federal system for the recordation of liens other
than the Uniform Commercial Code or a Certificate of Title Act (such as
_______________), appropriate evidence demonstrating compliance with the
requirements of such recordation system; and (iii) with respect to Products not
described in the two preceding classes, one or more financing statements;
describing the Product, filed with all filing offices necessary to create a
perfected security interest in that Collateral under the UCC.
Final Scheduled Distribution Date: With respect to each class of
Notes, the Class A--1 Final Scheduled Distribution Date, the Class A--2 Final
Scheduled Distribution Date, the Class A--3 Final Scheduled Distribution Date,
the Class A--4 Final Scheduled Distribution Date, the Class A--5 Final Scheduled
Distribution Date and the Class A--6 Final Scheduled Distribution Date,
respectively; and with respect to the Class B Certificates, the Class B Final
Scheduled Distribution Date.
Final Scheduled Maturity Date: _______, 199_
Financed Product: A new or used Product, together with all
accessories thereto, securing or purporting to secure an Obligor's indebtedness
under a Contract.
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Force-Placed Insurance: The meaning set forth in Section 3.4(b).
Funding Period: The period beginning on the Closing Date and ending
on the first to occur of (a) the Distribution Date on which the Pre-Funded
Amount (after giving effect to any reduction in the Pre-Funded Amount in
connection with the transfer of Subsequent Contracts to the Trust on such
Distribution Date) is less than $100,000, (b) the date on which an Event of
Default (as defined in the Indenture) or a Servicer Termination Event occurs,
(c) the date on which an Insolvency Event occurs with respect to Green Tree and
(d) the close of business on the Distribution Date occurring in _______, 199_.
General Partners: GTGP I and GTGP II in their capacities as general
partners of the Trust, and any successors thereto as permitted by the Trust
Agreement.
Green Tree: Green Tree Financial Corporation, a Delaware corporation.
GTGP I: Green Tree First GP Inc., a Delaware corporation.
GTGP II: Green Tree Second GP Inc., a Delaware corporation.
Indenture: The Indenture, dated as of __________, 199_, between the
Trust and, as trustee, as the same may be amended and supplemented from time to
time.
Indenture Trustee: The Person acting as Trustee under the Indenture,
its successors in interest and any successor Trustee under the Indenture.
Independent Accountants: As defined in Section 3.11(a).
Initial Cutoff Date: __________, 199_.
Initial Cutoff Date Principal Balance: $_________.
Initial Contracts: The Contracts listed on the Schedule of Initial
Contracts on the Closing Date.
Insolvency Event: With respect to a specified Person, (a) the
commencement of an involuntary case against such Person under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law, and such case is not
dismissed within 60 days; or (b) the filing of a decree or entry of an order for
relief by a court having jurisdiction in the premises in respect of such Person
or any substantial part of its property in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver,
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liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs; or (c) the commencement by
such Person of a voluntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or the
consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
Insurance Add-On Amount: The premium charged to the Obligor in the
event that the Servicer obtains Force-Placed Insurance pursuant to Section 3.4.
Insurance Policy: With respect to a Contract, any insurance policy
benefiting the holder of the Contract providing loss or physical damage, credit
life, credit disability, theft, mechanical breakdown or similar coverage with
respect to the Financed Product or the Obligor.
Lien: Any security interest, lien, charge, pledge, preference, equity
or encumbrance of any kind, including tax liens, mechanics' liens and any liens
that attach by operation of law.
Lien Certificate: With respect to a Financed Product, an original
certificate of title, certificate of lien or other notification issued by the
Registrar of Titles of the applicable state to a secured party which indicates
that the lien of the secured party on the Financed Product is recorded on the
original certificate of title. In any jurisdiction in which the original
certificate of title is required to be given to the Obligor, the term "Lien
Certificate" shall mean only a certificate or notification issued to a secured
party.
Liquidated Contract: With respect to any Monthly Period, a defaulted
Contract as to which the Servicer has determined that all amounts it expects to
recover from or on account of such Contract have been recovered; provided that
any defaulted contract in respect of which the related Product has been realized
upon and disposed of and the proceeds of such disposition shall have been
realized shall be deemed to be a Liquidated Contract.
Liquidation Proceeds: With respect to a Liquidated Contract, all
amounts realized with respect to such Contract (other than amounts withdrawn
from the Reserve Account) net of (i) reasonable expenses incurred by the
Servicer in connection with the collection of such Contract and the repossession
and disposition of the Financed Product and (ii) amounts that are required to be
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refunded to the Obligor on such Contract; provided, however, that the
Liquidation Proceeds with respect to any Contract shall in no event be less than
zero.
Monthly Advance: The amount that the Servicer is required to advance
on any Contract pursuant to Section 4.4(a).
Monthly Period: With respect to a Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs (such calendar
month being referred to as the "related" Monthly Period with respect to such
Distribution Date). With respect to an Accounting Date, the calendar month in
which such Accounting Date occurs is referred to herein as the "related" Monthly
Period to such Accounting Date.
Monthly Records: All records and data maintained by the Servicer with
respect to the Contracts, including the following with respect to each Contract:
the account number; the identity of the originating Dealer; Obligor name;
Obligor address; Obligor home phone number; Obligor business phone number;
original Principal Balance; original term; Annual Percentage Rate; current
Principal Balance; current remaining term; origination date; first payment date;
final scheduled payment date; next payment due date; date of most recent
payment; new/used classification; collateral description; days currently
delinquent; number of contract extensions (months) to date; amount, if any, of
Force-Placed Insurance payable monthly; amount of the Scheduled Payment; current
Insurance Policy expiration date; and past due or late charges, if any.
Moody's: Moody's Investors Service, Inc., or any successor thereto.
Note Distribution Account: The account designated as such,
established and maintained pursuant to Section 4.1(c).
Note Majority: As to each class of Notes, Holders of Notes
representing a majority of the outstanding principal balance of such class of
Notes.
Note Pool Factor: With respect to any Distribution Date and each
class of Notes, an eight-digit decimal figure equal to the outstanding
principal balance of such class of Notes as of such Distribution Date (after
giving effect to all distributions on such date) divided by the original
outstanding principal balance of such class of Notes as of the Closing Date.
Noteholders' Interest Distributable Amount: With respect to any
Distribution Date, the sum of the Class A-1 Interest Distributable Amount, the
Class A-2 Interest Distributable Amount, the Class A-3 Interest Distributable
Amount, the Class A-4 Interest Distributable Amount, the Class A-5 Interest
Distributable Amount and the Class A-6 Interest Distributable Amount.
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Noteholders' Monthly Principal Distributable Amount: With respect to
any Distribution Date, the Noteholders' Percentage of the Principal Distribution
Amount. With respect to the Distribution Date on which the outstanding
principal balance of the Class A-1 Notes is reduced to zero, the "Noteholders'
Monthly Principal Distributable Amount" shall equal the sum of (i) the
outstanding principal balance of the Class A-1 Notes plus (ii) the Noteholders'
Percentage (after giving effect to the retirement of the Class A-1 Notes) of
the Principal Distribution Amount less the outstanding principal balance of the
Class A-1 Notes immediately prior to such Distribution Date.
Noteholders' Percentage: (i) with respect to any Determination Date
relating to a Distribution Date prior to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, 100%, (ii) with
respect to the Determination Date relating to the Distribution Date on which the
principal balance of the Class A-1 Notes is reduced to zero, 100% with respect
to that portion of the Principal Distribution Amount equal to the unpaid
principal balance of the Class A-1 Notes, and with respect to the remaining
portion of the Principal Distribution Amount, a percentage, expressed as a
fraction computed by the Servicer, the numerator of which is the aggregate
initial principal balance of the Class A-2, Class A-3, Class A-4, Class A-5
and Class A-6 Notes and the denominator of which is the Aggregate Principal
Balance (plus any remaining Pre-Funded Amount) as of the related Accounting Date
for the preceding Distribution Date, minus that portion of the Principal
Distribution Amount applied to retire the Class A-1 Notes, (iii) with respect
to any Determination Date relating to a Distribution Date thereafter to and
including the Distribution Date (if any) on which the aggregate principal
balance of the Notes is reduced to zero, a percentage, expressed as a fraction
computed by the Servicer, the numerator of which is the outstanding principal
balance of the Notes on the related Determination Date and the denominator of
which is the Aggregate Principal Balance (plus any remaining Pre-Funded Amount)
as of the related Accounting Date for the preceding Distribution Date, and (iv)
with respect to any Determination Date relating to a Distribution Date
thereafter (if any), zero.
Noteholders' Principal Carryover Shortfall: As of the close of
business on any Distribution Date, the excess of the sum of the Noteholders'
Monthly Principal Distributable Amount and any outstanding Noteholders'
Principal Carryover Shortfall from the immediately preceding Distribution Date
over the amount in respect of principal that is actually deposited in the Note
Distribution Account on such immediately preceding Distribution Date.
Noteholders' Principal Distributable Amount: With respect to any
Distribution Date (other than the Final Scheduled Distribution Date with respect
to any class of Notes), the sum of the Noteholders' Monthly Principal
Distributable Amount for such Distribution Date and any Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date. The
Noteholders' Principal Distributable Amount on the Final Scheduled Distribution
Date for any class of Notes will equal the sum of (i) the Noteholders' Monthly
Principal
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Distributable Amount for such Distribution Date, (ii) the Noteholders' Principal
Carryover Shortfall as of the close of the preceding Distribution Date, and
(iii) the excess of the outstanding principal balance of such class of Notes, if
any, over the amounts in clauses (i) and (ii). In no event may the Noteholders'
Principal Distributable Amount for any Distribution Date exceed the outstanding
principal balance of the Notes immediately prior to such Distribution Date.
Notes: The Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes.
Obligor: The purchaser or the co-purchasers of a Financed Product and
any other Person or Persons who are primarily or secondarily obligated to make
payments under a Contract.
Opinion of Counsel: A written opinion of counsel acceptable in form
and substance and from counsel acceptable to the Owner Trustee and, if such
opinion or a copy thereof is required to be delivered to the Indenture Trustee,
to the Indenture Trustee.
Original Pool Balance: As of any date, the sum of the Initial Cutoff
Date Principal Balance plus the aggregate Principal Balance (as of the related
Subsequent Cutoff Date) of all Subsequent Contracts sold to the Trust on any
Subsequent Transfer Date.
Outstanding Monthly Advances: With respect to a Contract and a
Determination Date, the sum of all Monthly Advances made on any Determination
Date prior to such Determination Date relating to that Contract which have not
been reimbursed pursuant to Section 4.6(i) or Section 4.8.
Owner Trustee: ___________________, acting not individually but
solely as trustee, or its successor in interest, and any successor Owner Trustee
appointed as provided in the Trust Agreement.
Person: Any legal person, including any individual, corporation,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.
Pre-Funded Amount: As of any date, $__________ minus the aggregate
Principal Balance (as of the related Subsequent Cutoff Date) of all Subsequent
Contracts sold to the Trust on or prior to such date.
Pre-Funding Account: The account designated as the Pre-Funding
Account in, and which is established and maintained pursuant to, Section 4.1(b).
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Principal Balance: With respect to any Contract, as of any date, the
Amount Financed minus (i) that portion of all amounts received on or prior to
such date and allocable to principal in accordance with the terms of the
Contract, and (ii) any Cram Down Loss in respect of such Contract.
Principal Distribution Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts with respect to the related
Monthly Period, in each case computed with respect to each Contract in
accordance with the method specified in the related retail installment sale
contract or promissory note: (i) that portion of all collections on Contracts
(other than Liquidated Contracts and Purchased Contracts) allocable to
principal, including all full and partial principal prepayments, (ii) the
Principal Balance (as of the related Accounting Date) of all Contracts that
became Liquidated Contracts during the related Monthly Period (other than
Purchased Contracts), (iii) the Principal Balance of all Contracts that became
Purchased Contracts as of the related Accounting Date, and (iv) the aggregate
amount of Cram Down Losses that shall have occurred during the related Monthly
Period.
Products: Motorcycles; marine products (including boats, boat
trailers and outboard motors); pianos and organs; horse trailers; sport vehicles
(including snowmobiles, personal watercraft and all-terrain vehicles); trucks;
personal aircraft; and recreational vehicles.
Purchase Amount: With respect to a Contract, the Principal Balance
and all accrued and unpaid interest on the Contract (without regard to any
Monthly Advances that may have been made with respect to the Contract) as of the
Accounting Date on which the obligation to purchase such Contract arises.
Purchased Contract: As of any Accounting Date, any Contract
(including any Liquidated Contract) that became a Warranty Contract or
Administrative Contract as of such Accounting Date (or which the Seller or the
Servicer has elected to purchase as of an earlier Accounting Date, as permitted
by Section 2.6 or 3.7), and as to which the Purchase Amount has been deposited
in the Collection Account by the Seller or the Servicer, as applicable, on or
before the related Deposit Date.
Rating Agency: Each of Moody's and Standard & Poor's, so long as such
Persons maintain a rating on the Certificates and the Notes; and if either
Moody's or Standard & Poor's no longer maintains a rating on the Certificates or
the Notes, such other nationally recognized statistical rating organization
selected by the Seller.
Rating Agency Condition: With respect to any action, that each Rating
Agency shall have been given 10 days' prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Owner Trustee
and the Indenture Trustee in writing that such action will not result in a
reduction or withdrawal of the then current rating of the Notes or the
Certificates.
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Registrar of Titles: With respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, Products and liens thereon.
Related Documents: The Trust Agreement, the Indenture, the
Certificates, the Notes, each Subsequent Transfer Agreement, the Custodian
Agreement, the Depository Agreements, and the Underwriting Agreement between the
Seller and the underwriter of the Certificates and the Notes. The Related
Documents executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
Required Deposit Rating: A rating on short-term unsecured debt
obligations of "P-1" by Moody's and at least "A-1+" by Standard & Poor's or
such other rating as may be acceptable to the Rating Agencies so as to not
affect the rating on the Certificates or the Notes.
Requisite Reserve Amount: As of the Closing Date, $________ and as of
any Distribution Date or Subsequent Transfer Date thereafter during the Funding
Period an amount equal to the difference between
(a) the product of (x) the weighted average of the Class A-1 Interest
Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the
Class A-4 Interest Rate, the Class A-5 Interest Rate, the Class A-6
Interest Rate and the Class B Pass-Through Rate (based on the
outstanding principal balance of the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5
Notes, the Class A-6 Notes and the Class B Certificate Balance on
such date), divided by 360, (y) the Pre-Funded Amount on such date and
(z) the number of days until the Distribution Date in __________,
199_, and
(b) the product of (x) ____%, divided by 360, (y) the Pre-Funded Amount on
such date and (z) the number of days until the Distribution Date in
__________, 199_.
The Requisite Reserve Amount for any Subsequent Transfer Date (i) shall be
calculated after taking into account the transfer of Subsequent Contracts to the
Trust on such Subsequent Transfer Date (unless such Subsequent Transfer Date
does not coincide with a Distribution Date and does not occur between a
Distribution Date and the related Determination Date) and (ii) (A) if such
Subsequent Transfer Date does not coincide with a Distribution Date but occurs
between a Distribution Date and the related Determination Date, shall be
calculated as of the Distribution Date immediately following such Subsequent
Transfer Date as if such Subsequent Transfer Date occurred on such Distribution
Date, (B) if such Subsequent Transfer Date coincides with a Distribution Date,
shall be calculated as of such Distribution Date or (C) if such Subsequent
Transfer Date does not coincide with a Distribution
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Date and does not occur between a Distribution Date and the related
Determination Date, shall be calculated as of the immediately preceding
Distribution Date (or as of the Closing Date, if such Subsequent Transfer Date
occurs before the Determination Date in __________, 199_) as if such Subsequent
Transfer Date occurred on such immediately preceding Distribution Date (or the
Closing Date).
Reserve Account: The account designated as the Reserve Account in,
and which is established and maintained pursuant to, Section 4.1(d), including
the Class A-1 Holdback Subaccount.
Reserve Amount: As of any date of determination, the amount on
deposit in the Reserve Account (other than the amount on deposit in the Class
A-1 Holdback Subaccount) on such date.
Responsible Officer: When used with respect to the Owner Trustee, any
officer of the Owner Trustee assigned by the Owner Trustee to administer its
corporate trust affairs relating to the Trust. When used with respect to any
other Person that is not an individual, the President, any Vice-President or
Assistant Vice-President or the Controller of such Person, or any other officer
or employee having similar functions.
Schedule of Initial Contracts: The schedule of all retail installment
sales contracts and promissory notes sold and transferred to the Trust pursuant
to this Agreement which is attached hereto as Exhibit A.
Schedule of Contracts: The Schedule of Initial Contracts attached
hereto as Exhibit A as supplemented by each Schedule of Subsequent Contracts
attached as Schedule A to each Subsequent Transfer Agreement.
Schedule of Representations: The Schedule of Representations and
Warranties attached hereto as Schedule A.
Schedule of Subsequent Contracts: The schedule of all retail
installment sales contracts and promissory notes sold and transferred to the
Trust pursuant to a Subsequent Transfer Agreement which is attached as Schedule
A to such Subsequent Transfer Agreement, which Schedule of Subsequent Contracts
shall supplement the Schedule of Initial Contracts.
Scheduled Payment: With respect to any Monthly Period for any
Contract, the amount set forth in such Contract as required to be paid by the
Obligor in such Monthly Period. If after the Closing Date, the Obligor's
obligation under a Contract with respect to a Monthly Period has been modified
so as to differ from the amount specified in such Contract as a result of (i)
the order of a court in an insolvency proceeding involving the Obligor, (ii)
pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940 or (iii)
modifications or extensions of the Contract permitted by Section 3.2(b), the
Scheduled Payment with respect to such Monthly
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Period shall refer to the Obligor's payment obligation with respect to such
Monthly Period as so modified.
Seller: Green Tree, or its successor in interest pursuant to Section
6.2.
Servicer: Green Tree, its successor in interest pursuant to Section
8.3 or, after any termination of the Servicer upon a Servicer Termination Event,
the Backup Servicer or any other successor Servicer.
Servicer Termination Event: An event described in Section 8.1.
Servicer's Certificate: With respect to each Determination Date, a
certificate, completed by and executed on behalf of the Servicer, in accordance
with Section 3.9, substantially in the form attached hereto as Exhibit C.
Standard & Poor's: Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or any successor thereto.
Subcollection Account: The account designated as the Subcollection
Account in, and which is established and maintained pursuant to Section 4.2(a).
Subsequent Cutoff Date: With respect to any Subsequent Contracts, the
date specified in the related Subsequent Transfer Agreement, which may in no
event be later than the Subsequent Transfer Date.
Subsequent Contracts: All Contracts sold and transferred to the Trust
pursuant to Section 2.4.
Subsequent Transfer Agreement: With respect to any Subsequent
Contracts, the related agreement described in Section 2.4.
Subsequent Transfer Date: Any date during the Funding Period on which
Subsequent Contracts are transferred to the Trust pursuant to Section 2.4.
Supplemental Servicing Fee: With respect to any Monthly Period, all
administrative fees, expenses and charges paid by or on behalf of Obligors,
including late fees, collected on the Contracts during such Monthly Period.
Total Servicing Fee: The sum of the Basic Servicing Fee and the
Supplemental Servicing Fee.
Trust: Green Tree Asset Receivables Trust, 199_-_.
Trust Accounts: The meaning specified in 4.1(e).
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Trust Agreement: The Trust Agreement dated as of ____________, 199_,
between the Seller, GTGP I, GTGP II and the Owner Trustee, as the same may be
amended and supplemented from time to time.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.
VSI Insurance: The meaning set forth in Section 3.4(e).
Warranty Contract: With respect to any Monthly Period, a Contract
which Seller has become obligated to repurchase pursuant to Section 2.6.
Section 1.2. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other gender; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
Section 1.3. Calculations. All calculations of the amount of
interest accrued on the Certificates and the Notes and all calculations of the
amount of the Basic Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months. All references to the Principal Balance of
a Contract as of an Accounting Date shall refer to the close of business on such
day.
Section 1.4. Section References. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
Section 1.5. No Recourse. No recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer, or
director, as such, of the Seller, the Servicer, the Indenture Trustee, the
Backup Servicer or the Owner Trustee or of any predecessor or successor of the
Seller, the Servicer, the Indenture Trustee, the Backup Servicer or the Owner
Trustee.
ARTICLE II
CONVEYANCE OF CONTRACTS
Section 2.1. Conveyance of Initial Contracts. Subject to the terms
and conditions of this Agreement, the Seller, pursuant to the mutually agreed
upon
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terms contained herein, hereby sells, transfers, assigns, and otherwise
conveys to the Trust, without recourse (but without limitation of its
obligations in this Agreement), all of the right, title and interest of the
Seller in and to the Initial Contracts, all monies at any time paid or payable
thereon or in respect thereof after the Initial Cutoff Date (including amounts
due on or before the Initial Cutoff Date but received by the Seller after the
Initial Cutoff Date), an assignment of security interests of the Seller in the
related Financed Products, the Insurance Policies and any proceeds from any
Insurance Policies relating to the Initial Contracts, the Obligors or the
related Financed Products, including rebates of premiums, all VSI Insurance and
any Force-Placed Insurance relating to the Initial Contracts, an assignment of
the rights of the Seller against Dealers with respect to the Initial Contracts
under the Dealer Agreements and the Dealer Assignments, all items contained in
the related Contract Files, any and all other documents that the Seller keeps on
file in accordance with its customary procedures relating to the Initial
Contracts, the Obligors or the related Financed Products, any property
(including the right to receive future Liquidation Proceeds) that secures an
Initial Contract and that has been acquired by or on behalf of the Trust
pursuant to liquidation of such Contract, all funds on deposit from time to time
in the Trust Accounts and all investments therein and proceeds thereof, and all
proceeds of the foregoing. It is the intention of the Seller that the transfer
and assignment contemplated by this Agreement and each Subsequent Transfer
Agreement shall constitute a sale of the Contracts and other Trust Property from
the Seller to the Trust and the beneficial interest in and title to the
Contracts and the other Trust Property shall not be part of the Seller's estate
in the event of the filing of a bankruptcy petition by or against the Seller
under any bankruptcy law. In the event that, notwithstanding the intent of the
Seller, the transfer and assignment contemplated hereby and each Subsequent
Transfer Agreement is held not to be a sale, this Agreement and each Subsequent
Transfer Agreement shall constitute a grant of a security interest to the Trust
in the property referred to in this Section 2.1 or transferred to the Trust
pursuant to the related Subsequent Transfer Agreement.
Section 2.2. Custody of Contract Files.
(a) In connection with the sale, transfer and assignment of the
Contracts and the other Trust Property to the Trust pursuant to this Agreement
and each Subsequent Transfer Agreement, and simultaneously with the execution
and delivery of this Agreement, the Trust shall enter into the Custodian
Agreement with the Custodian, dated as of the Closing Date, pursuant to which
the Owner Trustee, on behalf of the Trust, shall revocably appoint the
Custodian, and the Custodian shall accept such appointment, to act as the agent
of the Trust as Custodian of the following documents or instruments in its
possession which shall be delivered to the Custodian as agent of the Trust on or
before the Closing Date (with respect to each Initial Contract) or the
applicable Subsequent Transfer Date (with respect to each Subsequent Contract):
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(i) The fully executed original of the Contract (together with
any agreements modifying the Contract, including without limitation any
extension agreements);
(ii) Documents evidencing or related to any Insurance Policy, or
copies thereof;
(iii) The original credit application, or a copy thereof, of
each Obligor, fully executed by each such Obligor on the Seller's customary
form, or on a form approved by the Seller, for such application; and
(iv) The Evidence of Perfection (when received) and otherwise
such documents, if any, that the Seller keeps on file in accordance with
its customary procedures indicating that the Financed Product is owned by
the Obligor and subject to the interest of the Seller as first lienholder
or secured party, or, if such Evidence of Perfection has not yet been
received, a copy of the application therefor, showing the Seller as secured
party.
In connection with the grant of the security interest in the Trust
Estate to the Indenture Trustee for the benefit of the Note Owners pursuant to
the Indenture, the Trust agrees that from and after the Closing Date through the
date of release of such security interest pursuant to the terms of the
Indenture, the Custodian shall not be acting as agent of the Trust, but rather
shall be acting as agent of the Indenture Trustee for the benefit of the Note
Owners.
The Indenture Trustee may act as the Custodian, in which case the
Indenture Trustee shall be deemed to have assumed the obligations of the
Custodian specified in the Custodian Agreement, and the terms of Exhibit B-2
shall be deemed incorporated by reference herein.
(b) Upon payment in full on any Contract, the Servicer will notify the
Custodian by certification of an officer of the Servicer (which certification
shall include a statement to the effect that all amounts received in connection
with such payments which are required to be deposited in the Collection Account
pursuant to Section 3.2 have been so deposited) and shall request delivery of
the Contract and Contract File to the Servicer. From time to time as
appropriate for servicing and enforcing any Contract, the Custodian shall, upon
written request of an officer of the Servicer and delivery to the Custodian of a
receipt signed by such officer, cause the original Contract and the related
Contract File to be released to the Servicer. The Servicer's receipt of a
Contract and/or Contract File shall obligate the Servicer to return the original
Contract and the related Contract File to the Custodian when its need by the
Servicer has ceased unless the Contract shall be repurchased as described in
Section 2.6 or 3.7.
Section 2.3. Conditions to Acceptance by Owner Trustee. As
conditions to Owner Trustee's execution and delivery of the Notes on behalf of
the Trust and
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execution, authentication and delivery of the Certificates on behalf of the
Trust on the Closing Date, the Owner Trustee shall have received the following
on or before the Closing Date:
(a) The Schedule of Initial Contracts certified by the President,
Controller or Treasurer of the Seller;
(b) The acknowledgement of the Custodian that it holds the
Contract File relating to each Initial Contract;
(c) Copies of resolutions of the Board of Directors of the Seller
approving the execution, delivery and performance of this Agreement, the
Related Documents and the transactions contemplated hereby and thereby,
certified by a Secretary or an Assistant Secretary of the Seller; and
(d) Evidence that all filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken
or performed by any Person in any jurisdiction (other than those actions to
be taken with respect to Subsequent Contracts pursuant to Section 2.4) to
give the Owner Trustee a first priority perfected lien on, or ownership
interest in, the Contracts and the other Trust Property have been made,
taken or performed.
Section 2.4. Conveyance of Subsequent Contracts.
(a) Subject to the conditions set forth in paragraph (b) below, the
Seller, pursuant to the mutually agreed upon terms contained herein and pursuant
to one or more Subsequent Transfer Agreements, shall sell, transfer, assign, and
otherwise convey to the Trust, without recourse (but without limitation of its
obligations in this Agreement), all of the right, title and interest of the
Seller in and to the Subsequent Contracts, all monies at any time paid or
payable thereon or in respect thereof after the related Subsequent Cutoff Date
(including amounts due on or before the related Subsequent Cutoff Date but
received by the Seller after the related Subsequent Cutoff Date), an assignment
of security interests of the Seller in the related Financed Products, the
Insurance Policies and any proceeds from any Insurance Policies relating to the
Subsequent Contracts, the Obligors or the related Financed Products, including
rebates of premiums, all VSI Insurance and any Force-Placed Insurance relating
to the Subsequent Contracts, rights of the Seller against Dealers with respect
to the Subsequent Contracts under the Dealer Agreements and the Dealer
Assignments, all items contained in the Contract Files relating to the
Subsequent Contracts, any and all other documents that the Seller keeps on file
in accordance with its customary procedures relating to the Subsequent
Contracts, the Obligors or the related Financed Products, any property
(including the right to receive future Liquidation Proceeds) that secures a
Subsequent Contract and that has been acquired by or on behalf of the Trust
pursuant to liquidation of such Subsequent Contract, and all proceeds of the
foregoing.
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(b) The Seller shall transfer to the Trust the Subsequent Contracts
and the other property and rights related thereto described in paragraph (a)
above only upon the satisfaction of each of the following conditions on or prior
to the related Subsequent Transfer Date:
(i) The Seller shall have provided the Owner Trustee, the
Indenture Trustee and the Rating Agencies with a timely Addition Notice and
shall have provided any information reasonably requested by any of the
foregoing with respect to the Subsequent Contracts;
(ii) the Funding Period shall not have terminated;
(iii) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee a duly executed written assignment (including an
acceptance by the Indenture Trustee and the Owner Trustee) in substantially
the form of Exhibit D (the "Subsequent Transfer Agreement"), which shall
include a Schedule of Subsequent Contracts listing the Subsequent Contracts
and shall specify the Requisite Reserve Amount and the Class A-1 Holdback
Amount, if any, as of or for such Subsequent Transfer Date;
(iv) the Seller shall have delivered to the Custodian the
Contract Files relating to the Subsequent Contracts, and the Custodian
shall have delivered to the Seller, the Owner Trustee and the Indenture
Trustee an acknowledgement of receipt of such Contract Files;
(v) the Seller shall, to the extent required by Section 4.1, have
deposited in the Collection Account collections in respect of the
Subsequent Contracts;
(vi) as of each Subsequent Transfer Date, the Seller shall not be
insolvent nor have been made insolvent by such transfer nor be aware of any
pending insolvency;
(vii) the Reserve Amount on such Subsequent Transfer Date, after
taking into account any transfers of funds from the Reserve Account to the
General Partners in respect of the sale of the Subsequent Contracts to the
Trust, shall be no less than the Requisite Reserve Amount for such
Subsequent Transfer Date;
(viii) each Rating Agency shall have notified the Seller, the
Owner Trustee and the Indenture Trustee in writing that following such
transfer the Notes and the Certificates will be rated in the highest short-
term or long-term rating category, as applicable, by such Rating Agency;
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(ix) such addition will not result in a material adverse tax
consequence to the Trust, the Noteholders or the Certificateholders as
evidenced by an Opinion of Counsel to be delivered by the Seller;
(x) the Seller shall have delivered to the Owner Trustee and the
Indenture Trustee an Officers' Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b);
(xi) the Seller shall have delivered to the Rating Agencies one
or more Opinions of Counsel with respect to the transfer of the Subsequent
Contracts substantially in the form of the Opinions of Counsel delivered to
such Persons on the Closing Date;
(xii) (A) the Contracts in the Trust, including the Subsequent
Contracts to be conveyed to the Trust on the Subsequent Transfer Date,
shall meet the following criteria (based on the characteristics of the
Initial Contracts on the Initial Cutoff Date and the Subsequent Contracts
on each related Subsequent Cutoff Date): (1) the weighted average APR of
such Contracts will not be less than ____%, (2) the weighted average
remaining term of such Contracts will not be greater than ____ months nor
less than ____ months, (3) not more than ____% of the Aggregate Principal
Balances of such Contracts will represent used Financed Products, and (4)
not more than ____% of the Aggregate Principal Balance of such Contracts
will have an APR in excess of ____%, and the Trust, the Owner Trustee and
the Indenture Trustee shall have received written confirmation from a firm
of certified independent public accountants as to the satisfaction of such
criteria;
(xiii) the Seller shall have taken any action necessary to
maintain the first perfected ownership interest of the Trust in the Trust
Property and the first perfected security interest of the Indenture Trustee
in the Indenture Collateral; and
(xiv) no selection procedures adverse to the interests of the
Certificateholders or the Noteholders shall have been utilized in selecting
the Subsequent Contracts.
(c) On such Subsequent Transfer Date, if all the conditions specified
in paragraph (b) above have been satisfied, the Trust shall accept the transfer
of such Subsequent Contracts and shall pay to the Seller from the Pre-Funding
Account the amount specified in Section 4.7(a)(iii).
(d) The Seller covenants to transfer to the Trust pursuant to
paragraph (a) above Subsequent Contracts with an aggregate Principal Balance
equal to $__________; provided, however, that the sole remedy of the Trust, the
Owner Trustee, the Indenture Trustee, the Noteholders or the Certificateholders
with respect to a failure of such covenant shall be to enforce the provisions of
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Section 5.1(b) hereof (with respect to Class A-1 Holdback Amounts) and Section
4.7(c) hereof, Section 10.01(b) of the Indenture and Section 5.2 of the Trust
Agreement with respect to payment of the Class B Prepayment Premium, Class A-1
Prepayment Premium, Class A-2 Prepayment Premium, Class A-3 Prepayment
Premium, Class A-4 Prepayment Premium, Class A-5 Prepayment Premium and Class
A-6 Prepayment Premium.
Section 2.5. Representations and Warranties of Seller. By its
execution of this Agreement and each Subsequent Transfer Agreement, the Seller
makes the following representations and warranties on which the Trust relies in
accepting the Contracts and the other Trust Property in trust and on which the
Owner Trustee relies in issuing on behalf of the Trust, the Certificates and
Notes. Unless otherwise specified, such representations and warranties speak as
of the Closing Date or Subsequent Transfer Date, as appropriate, but shall
survive the sale, transfer, and assignment of the Contracts to the Trust.
(a) Schedule of Representations. The representations and
warranties set forth on the Schedule of Representations are true and
correct.
(b) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at all relevant
times, and now has, power, authority and legal right to acquire, own and
sell the Contracts and the other property transferred to the Trust.
(c) Due Qualification. The Seller is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of its property or the conduct of its business requires
such qualification.
(d) Power and Authority. The Seller has the power and authority
to execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; the Seller has full
power and authority to sell and assign the Trust Property to be sold and
assigned to and deposited with the Trust by it and has duly authorized such
sale and assignment to the Trust by all necessary corporate action; and the
execution, delivery and performance of this Agreement and the Seller's
Related Documents have been duly authorized by the Seller by all necessary
corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and the
related Subsequent Transfer Agreement, if any, effects a valid sale,
transfer and assignment of the Contracts and the other Trust Property,
enforceable
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against the Seller and creditors of and purchasers from the Seller; and
this Agreement and the related Subsequent Transfer Agreement, if any, and
the Seller's Related Documents, when duly executed and delivered, shall
constitute legal, valid and binding obligations of the Seller enforceable
in accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the related Subsequent Transfer
Agreement, if any, and the Related Documents and the fulfillment of the
terms of this Agreement and the related Subsequent Transfer Agreement, if
any, and the Related Documents shall not conflict with, result in any
breach of any of the terms and provisions of or constitute (with or without
notice, lapse of time or both) a default under the certificate of
incorporation or by-laws of the Seller, or any indenture, agreement,
mortgage, deed of trust or other instrument to which the Seller is a party
or by which it is bound, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement, mortgage, deed of trust or other instrument, other
than this Agreement, or violate any law, order, rule or regulation
applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the Seller's knowledge, threatened against the Seller,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Seller or its
properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the issuance of the Certificates
or the Notes or the consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents, or (D)
seeking to adversely affect the federal income tax or other federal, state
or local tax attributes of the Certificates or the Notes.
(h) Chief Executive Office. The chief executive office of the
Seller is at 1100 Landmark Towers, 345 St. Peter Street, St. Paul,
Minnesota 55102-1639.
Section 2.6. Repurchase of Contracts Upon Breach of Warranty. The
Owner Trustee, in accepting the Trust Property in trust and executing the
Certificates
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and Notes, and Trustee in authenticating the Notes, have relied on the
representations and warranties made by the Seller, and to be made by the Seller
on each Subsequent Transaction Date, pursuant to Section 2.5 and the Schedule of
Representations. Upon discovery by any of the Seller, the Servicer, the
Indenture Trustee or the Owner Trustee of a breach of any of the representations
and warranties contained in Section 2.5 that materially and adversely affects
the interests of the Noteholders, the Certificateholders or the Trust in any
Contract (including any Liquidated Contract), the party discovering such breach
shall give prompt written notice to the others; provided, however, that the
failure to give any such notice shall not affect any obligation of the Seller.
As of the second Accounting Date (or, at the Seller's election, the Seller's
first Accounting Date) following its discovery or its receipt of notice of any
breach of the representations and warranties set forth on the Schedule of
Representations that materially and adversely affects the interests of the
Noteholders, the Certificateholders or the Trust in any Contract (including any
Liquidated Contract) the Seller shall, unless such breach shall have been cured
in all material respects, purchase such Contract from the Trust and, on or
before the related Deposit Date, the Seller shall pay the Purchase Amount to the
Owner Trustee pursuant to Section 4.5. It is understood and agreed that, except
as set forth in this Section 2.6, the obligation of the Seller to repurchase any
Contract as to which a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Seller for such
breach available to the Indenture Trustee on behalf of the Noteholders or the
Owner Trustee on behalf of the Certificateholders.
In addition to the foregoing and notwithstanding whether the related
Contract shall have been purchased by the Seller, the Seller shall indemnify the
Owner Trustee, the Indenture Trustee, the Backup Servicer, the Trust, the
Noteholders and the Certificateholders against all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel, which may be asserted against or incurred by any of them as a result of
third party claims arising out of the events or facts giving rise to such
breach.
Section 2.7. Nonpetition Covenant. None of the Seller, the
Servicer, the Owner Trustee (in its individual capacity or on behalf of the
Trust), nor the Backup Servicer shall petition or otherwise invoke the process
of any court or government authority for the purpose of commencing or sustaining
a case against the Trust or either General Partner under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Trust.
Section 2.8. Collecting Evidence of Perfection Not Delivered on the
Closing Date or Subsequent Transfer Date. In the case of any Contract in
respect of which written evidence from the Dealer selling the related Financed
Product that the Lien Certificate or other Evidence of Perfection for such
Financed Product showing the Seller as first lienholder has been applied for
from the Registrar of
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Titles or other filing officer was delivered to the Custodian on the Closing
Date or Subsequent Transfer Date, as appropriate, in lieu of Evidence of
Perfection, the Servicer shall use its best efforts to collect such Evidence of
Perfection from the Registrar of Titles as promptly as practicable. If such
Evidence of Perfection showing the Seller as first lienholder is not received by
the Custodian within 180 days after the Closing Date or Subsequent Transfer
Date, as appropriate, then the representation and warranties in paragraphs 5 and
18 of the Schedule of Representations in respect of such Contract shall be
deemed to have been incorrect in a manner that materially and adversely affects
the Certificateholders, the Noteholders and the Trust.
Section 2.9. Trust's Assignment of Administrative Contracts and
Warranty Contracts. With respect to all Administrative Contracts and all
Warranty Contracts purchased by the Servicer or the Seller, the Owner Trustee
shall take any and all actions reasonably requested by the Seller or Servicer,
at the expense of the requesting party, to assign, without recourse,
representation or warranty, to the Seller or the Servicer, as applicable, all
the Trust's right, title and interest in and to such purchased Contract, all
monies due thereon, the security interests in the related Financed Products,
proceeds from any Insurance Policies, proceeds from recourse against Dealers on
such Contracts and the interests of the Trust in certain rebates of premiums and
other amounts relating to the Insurance Policies and any documents relating
thereto, such assignment being an assignment outright and not for security; and
the Seller or the Servicer, as applicable, shall thereupon own such Contract,
and all such security and documents, free of any further obligation to the Owner
Trustee, the Trust, the Indenture Trustee, the Certificateholders or the
Noteholders with respect thereto.
ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 3.1. Duties of the Servicer. The Servicer is hereby
authorized to act as agent for the Trust and in such capacity shall manage,
service, administer and make collections on the Contracts, and perform the other
actions required by the Servicer under this Agreement. The Servicer agrees that
its servicing of the Contracts shall be carried out in accordance with customary
and usual procedures of institutions which service retail installment sales
contracts for goods of the type included in the Products and, to the extent more
exacting, the degree of skill and attention that the Servicer exercises from
time to time with respect to all comparable contracts that it services for
itself or others. In performing such duties, so long as Green Tree is the
Servicer, it shall comply with the policies and procedures attached hereto as
Schedule B. The Servicer's duties shall include, without limitation, collection
and posting of all payments, responding to inquiries of Obligors on the
Contracts, investigating delinquencies, sending payment coupons to Obligors,
reporting any required tax information to Obligors, policing the collateral,
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accounting for collections and furnishing monthly and annual statements to the
Owner Trustee and the Indenture Trustee with respect to distributions,
monitoring the status of Insurance Policies with respect to the Financed
Products and performing the other duties specified herein. The Servicer shall
also administer and enforce all rights and responsibilities of the holder of the
Contracts provided for in the Dealer Agreements (and shall maintain possession
of the Dealer Agreements, to the extent it is necessary to do so), the Dealer
Assignments and the Insurance Policies, to the extent that such Dealer
Agreements, Dealer Assignments and Insurance Policies relate to the Contracts,
the Financed Products or the Obligors. To the extent consistent with the
standards, policies and procedures otherwise required hereby, the Servicer shall
follow its customary standards, policies, and procedures and shall have full
power and authority, acting alone, to do any and all things in connection with
such managing, servicing, administration and collection that it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Servicer is hereby authorized and empowered by the Owner Trustee to execute and
deliver, on behalf of the Certificateholders and the Trust or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Contracts and with respect to the Financed Products; provided, however, that
notwithstanding the foregoing, the Servicer shall not, except pursuant to an
order from a court of competent jurisdiction, release an Obligor from payment of
any unpaid amount under any Contract or waive the right to collect the unpaid
balance of any Contract from the Obligor, except that the Servicer may forego
collection efforts if the amount subject to collection is de minimis and if it
would forego collection in accordance with its customary procedures. The
Servicer is hereby authorized to commence, in its own name or in the name of the
Trust (provided the Servicer has obtained the Owner Trustee's consent, which
consent shall not be unreasonably withheld), a legal proceeding to enforce a
Contract pursuant to Section 3.3 or to commence or participate in any other
legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or involving a Contract, an Obligor or a Financed Product. If the
Servicer commences or participates in such a legal proceeding in its own name,
the Trust shall thereupon be deemed to have automatically assigned such Contract
to the Servicer solely for purposes of commencing or participating in any such
proceeding as a party or claimant, and the Servicer is authorized and empowered
by the Owner Trustee to execute and deliver in the Servicer's name any notices,
demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. The Owner Trustee shall
furnish the Servicer with any powers of attorney and other documents which the
Servicer may reasonably request and which the Servicer deems necessary or
appropriate and take any other steps which the Servicer may deem necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
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Section 3.2. Collection of Contract Payments; Modifications of
Contracts.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Contracts as and when
the same shall become due, and shall follow such collection procedures as it
follows with respect to all comparable contracts that it services for itself or
others and otherwise act with respect to the Contracts, the Dealer Agreements,
the Dealer Assignments, the Insurance Policies and the other Trust Property in
such manner as will, in the reasonable judgment of the Servicer, maximize the
amount to be received by the Trust with respect thereto. The Servicer is
authorized in its discretion to waive any prepayment charge, late payment charge
or any other similar fees that may be collected in the ordinary course of
servicing any Contract.
(b) The Servicer may at any time agree to a modification or amendment
of a Contract in order to (i) change the Obligor's regular due date to a date
within the Monthly Period in which such due date occurs or (ii) re-amortize the
scheduled payments on the Contract following a partial prepayment of principal.
(c) The Servicer may grant payment extensions on, or other
modifications or amendments to, a Contract (in addition to those modifications
permitted by Section 3.2(b)) in accordance with its customary procedures if the
Servicer believes in good faith that such extension, modification or amendment
is necessary to avoid a default on such Contract, will maximize the amount to be
received by the Trust with respect to such Contract, and is otherwise in the
best interests of the Trust; provided, however, that:
(i) The aggregate period of all extensions on a Contract shall
not exceed three months;
(ii) In no event may a Contract be extended beyond the Monthly
Period immediately preceding the Final Scheduled Distribution Date; and
(iii) No such extension, modification or amendment shall be
granted more than 90 days after the Closing Date if such action would have
the effect of causing such Contract to be deemed to have been exchanged for
another Contract within the meaning of Section 1001 of the Internal Revenue
Code of 1986, as amended, or any proposed, temporary or final Treasury
Regulations issued thereunder.
(d) So long as the Green Tree is Servicer, any collections in respect
of Contracts collected by Green Tree shall, prior to the deposit thereof in the
Certificate Account, be held in bank accounts entitled substantially as follows:
"[name of depository], as agent for ____________________________, as
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Trustee, other trustees, and Green Tree Financial Corporation, as their
interests may appear."
Section 3.3. Realization Upon Contracts.
(a) Consistent with the standards, policies and procedures required by
this Agreement, the Servicer shall use its best efforts to repossess (or
otherwise comparably convert the ownership of) and liquidate any Financed
Product securing a Contract with respect to which the Servicer has determined
that payments thereunder are not likely to be resumed, as soon as is practicable
after default on such Contract but in no event later than the date on which all
or any portion of a Scheduled Payment has become ___ days delinquent. The
Servicer is authorized to follow such customary practices and procedures as it
shall deem necessary or advisable, consistent with the standard of care required
by Section 3.1, which practices and procedures may include reasonable efforts to
realize upon any recourse to Dealers, the sale of the related Financed Product
at public or private sale, the submission of claims under an Insurance Policy
and other actions by the Servicer in order to realize upon such a Contract. The
foregoing is subject to the provision that, in any case in which the Financed
Product shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Financed Product
unless it shall determine in its discretion that such repair and/or repossession
shall increase the proceeds of liquidation of the related Contract by an amount
greater than the amount of such expenses. All amounts received upon liquidation
of a Financed Product shall be remitted directly by the Servicer to the
Subcollection Account without deposit into any intervening account as soon as
practicable, but in no event later than the Business Day after receipt thereof.
The Servicer shall be entitled to recover all reasonable expenses incurred by it
in the course of repossessing and liquidating a Financed Product into cash
proceeds, but only out of the cash proceeds of such Financed Product, any
deficiency obtained from the Obligor or any amounts received from the related
Dealer, which amounts may be retained by the Servicer (and shall not be required
to be deposited as provided in Section 3.2(e)) to the extent of such expenses.
The Servicer shall pay on behalf of the Trust any personal property taxes
assessed on repossessed Financed Products; the Servicer shall be entitled to
reimbursement of any such tax from Liquidation Proceeds with respect to such
Contract.
(b) If the Servicer elects to commence a legal proceeding to enforce a
Dealer Agreement or Dealer Assignment, the act of commencement shall be deemed
to be an automatic assignment from the Trust to the Servicer of the rights under
such Dealer Agreement and Dealer Assignment for purposes of collection only.
If, however, in any enforcement suit or legal proceeding, it is held that the
Servicer may not enforce a Dealer Agreement or Dealer Assignment on the grounds
that it is not a real party in interest or a Person entitled to enforce the
Dealer Agreement or Dealer Assignment, the Owner Trustee, at the Servicer's
expense, or the Seller, at the Seller's expense, shall take such steps as the
Servicer deems necessary to enforce the Dealer Agreement or Dealer Assignment,
including
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bringing suit in its name or the name of the Seller or of the Owner Trustee for
the benefit of the Certificateholders and the Indenture Trustee for the benefit
of the Note Owners. All amounts recovered shall be remitted directly by the
Servicer as provided in Section 3.2(e).
Section 3.4. Insurance.
(a) [The Servicer shall require that each Financed Product be insured
by the Insurance Policies referred to in Paragraph 24 of the Schedule of
Representations and Warranties and shall monitor the status of such physical
loss and damage insurance coverage thereafter, in accordance with its customary
servicing procedures. Each Contract requires the Obligor to maintain such
physical loss and damage insurance, naming the Seller and its successors and
assigns as additional insureds, and permits the holder of such Contract to
obtain physical loss and damage insurance at the expense of the Obligor if the
Obligor fails to maintain such insurance. If the Servicer shall determine that
an Obligor has failed to obtain or maintain a physical loss and damage Insurance
Policy covering the related Financed Product which satisfies the conditions set
forth in Paragraph 24 of the Schedule of Representations (including, without
limitation, during the repossession of such Financed Product) the Servicer shall
enforce the rights of the holder of the Contract under the Contract to require
the Obligor to obtain such physical loss and damage insurance.] [Need to
verify with Green Tree]
(b) The Servicer may, if an Obligor fails to obtain or maintain a
physical loss and damage Insurance Policy, obtain insurance with respect to the
related Financed Product and advance on behalf of such Obligor, as required
under the terms of the insurance policy, the premiums for such insurance (such
insurance being referred to herein as "Force-Placed Insurance"). All policies
of Force-Placed Insurance shall be endorsed with clauses providing for loss
payable to the Owner Trustee. Any cost incurred by the Servicer in maintaining
such Force-Placed Insurance shall only be recoverable out of premiums paid by
the Obligors or Liquidation Proceeds with respect to the Contract, as provided
in Section 3.4(c).
(c) In connection with any Force-Placed Insurance obtained hereunder,
the Servicer may, in the manner and to the extent permitted by applicable law,
require the Obligors to repay the entire premium to the Servicer. In no event
shall the Servicer include the amount of the premium in the Amount Financed
under the Contract. For all purposes of this Agreement, the Insurance Add-On
Amount with respect to any Contract having Force-Placed Insurance will be
treated as a separate obligation of the Obligor and will not be added to the
Principal Balance of such Contract, and amounts allocable thereto will not be
available for distribution on the Notes or the Certificates. The Servicer shall
retain and separately administer the right to receive payments from Obligors
with respect to Insurance Add-On Amounts or rebates of Forced-Placed Insurance
premiums. If an Obligor makes a payment with respect to a Contract having
Force-Placed Insurance, but the Servicer is unable to determine whether the
payment is allocable to the
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Contract or to the Insurance Add-On Amount, the payment shall be applied first
to any unpaid Scheduled Payments and then to the Insurance Add-On Amount.
Liquidation Proceeds on any Contract will be used first to pay the Principal
Balance and accrued interest on such Contract and then to pay the related
Insurance Add-On Amount. If an Obligor under a Contract with respect to which
the Servicer has placed Force-Placed Insurance fails to make scheduled payments
of such Insurance Add-On Amount as due, and the Servicer has determined that
eventual payment of the Insurance Add-On Amount is unlikely, the Servicer may,
but shall not be required to, purchase such Contract from the Trust for the
Purchase Amount on any subsequent Deposit Date. Any such Contract, and any
Contract with respect to which the Servicer has placed Force-Placed Insurance
which has been paid in full (excluding any Insurance Add-On Amounts) will be
assigned to the Servicer.
(d) The Servicer may sue to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Trust. If the
Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
the act of commencement shall be deemed to be an automatic assignment of the
rights of the Trust under such Insurance Policy to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it is
held that the Servicer may not enforce an Insurance Policy on the grounds that
it is not a real party in interest or a holder entitled to enforce the Insurance
Policy, the Owner Trustee, on behalf of the Trust, at the Servicer's expense, or
the Seller, at the Seller's expense, shall take such steps as the Servicer deems
necessary to enforce such Insurance Policy, including bringing suit in its name
or the name of the Owner Trustee for the benefit of the Certificateholders and
the Indenture Trustee for the benefit of the Note Owners.
(e) The Servicer shall maintain a vendor's single interest or other
collateral protection insurance policy with respect to all Financed Products
which policy shall by its terms insure against physical damage in the event any
Obligor fails to maintain physical loss and damage insurance with respect to the
related Financed Product ("VSI Insurance"). Costs incurred by the Servicer in
maintaining such insurance shall be paid by the Servicer. The Servicer will
cause itself to be named as named insured and the Owner Trustee to be named a
loss payee under all such policies. The Servicer may elect not to maintain such
insurance policy but in such event will be obligated to indemnify the Trust
against any losses arising from an Obligor's failure to maintain physical loss
and damage insurance with respect to the related Financed Product.
Section 3.5. Maintenance of Security Interests in Products.
(a) Consistent with the policies and procedures required by this
Agreement, the Servicer shall take such steps as are necessary to maintain
perfection of the security interest created by each Contract in the related
Financed Product on behalf of the Trust, including but not limited to obtaining
the execution by the Obligors and the recording, registering, filing, re-
recording, re-filing, and re-
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registering of all security agreements, financing statements and continuation
statements as are necessary to maintain the security interest granted by the
Obligors under the respective Contracts. The Owner Trustee hereby authorizes the
Servicer, and the Servicer agrees, to take any and all steps necessary to re-
perfect such security interest on behalf of the Trust as necessary because of
the relocation of a Financed Product or for any other reason. In the event that
the assignment of a Contract to the Owner Trustee on behalf of the Trust is
insufficient, without a notation on the related Financed Product's certificate
of title, or without fulfilling any additional administrative requirements under
the laws of the state in which the Financed Product is located, to perfect a
security interest in the related Financed Product in favor of the Trust, the
Servicer hereby agrees that the Servicer's designation as the secured party on
the certificate of title is in its capacity as agent of the Trust.
(b) Upon the occurrence of a Servicer Termination Event, the Owner
Trustee and the Servicer shall take or cause to be taken such action as may, in
the opinion of counsel to the Owner Trustee, be necessary to perfect or re-
perfect the security interests in the Financed Products securing the Contracts
in the name of the Trust by amending the title documents of such Financed
Products or by such other reasonable means as may, in the opinion of counsel to
the Owner Trustee, be necessary or prudent. The Seller hereby agrees to pay all
expenses related to such perfection or re-perfection and to take all action
necessary therefor.
Section 3.6. Covenants, Representations, and Warranties of Servicer.
By its execution and delivery of this Agreement, the Servicer makes the
following representations, warranties and covenants on which the Owner Trustee
relies in accepting the Contracts in trust and issuing the Certificates and the
Notes on behalf of the Trust and on which the Indenture Trustee relies in
authenticating the Notes.
(a) The Servicer covenants as follows:
(i) Liens in Force. The Financed Product securing each Contract
shall not be released in whole or in part from the security interest
granted by the Contract, except upon payment in full of the Contract or as
otherwise contemplated herein;
(ii) No Impairment. The Servicer shall do nothing to impair the
rights of the Trust, the Certificateholders or the Noteholders in the
Contracts, the Dealer Agreements, the Dealer Assignments, the Insurance
Policies or the other Trust Property; and
(iii) No Amendments. The Servicer shall not extend or otherwise
amend the terms of any Contract, except in accordance with Section 3.2.
(b) The Servicer represents, warrants and covenants as of the Closing
Date as to itself:
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(i) Organization and Good Standing. The Servicer has been duly
organized and is validly existing and in good standing under the laws of
its jurisdiction of organization, with power, authority and legal right to
own its properties and to conduct its business as such properties are
currently owned and such business is currently conducted, and had at all
relevant times, and now has, power, authority and legal right to enter into
and perform its obligations under this Agreement;
(ii) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Contracts as required by this Agreement) requires or
shall require such qualification;
(iii) Power and Authority. The Servicer has the power and
authority to execute and deliver this Agreement and its Related Documents
and to carry out its terms and their terms, respectively, and the
execution, delivery and performance of this Agreement and the Servicer's
Related Documents have been duly authorized by the Servicer by all
necessary corporate action;
(iv) Binding Obligation. This Agreement and the Servicer's
Related Documents shall constitute legal, valid and binding obligations of
the Servicer enforceable in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) No Violation. The consummation of the transactions
contemplated by this Agreement and the Servicer's Related Documents, and
the fulfillment of the terms of this Agreement and the Servicer's Related
Documents, shall not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of
time) a default under, the articles of incorporation or bylaws of the
Servicer, or any indenture, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of
trust or other instrument, other than this Agreement, or violate any law,
order, rule or regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or any
of its properties;
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(vi) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's knowledge, threatened against the Servicer,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality having jurisdiction over the Servicer or
its properties (A) asserting the invalidity of this Agreement or any of the
Related Documents, (B) seeking to prevent the issuance of the Certificates
or the Notes or the consummation of any of the transactions contemplated by
this Agreement or any of the Related Documents, or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the Related Documents or (D)
seeking to adversely affect the federal income tax or other federal, state
or local tax attributes of the Certificates or the Notes;
(vii) No Consents. The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or
authorization, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement;
(viii) VSI Insurance. The VSI Insurance is in full force and
effect.
Section 3.7. Purchase of Contracts Upon Breach of Covenant. Upon
discovery by any of the Servicer, the Owner Trustee or the Indenture Trustee of
a breach of any of the covenants set forth in Sections 3.5(a) or 3.6(a), the
party discovering such breach shall give prompt written notice to the others;
provided, however, that the failure to give any such notice shall not affect any
obligation of the Servicer. As of the second Accounting Date following its
discovery or receipt of notice of any breach of any covenant set forth in
Sections 3.5(a) or 3.6(a) which materially and adversely affects the interests
of the Certificateholders, the Noteholders or the Trust in any Contract
(including any Liquidated Contract) (or, at the Servicer's election, the first
Accounting Date so following), the Servicer shall, unless it shall have cured
such breach in all material respects, purchase from the Trust the Contract
affected by such breach and, on the related Deposit Date, the Servicer shall pay
the related Purchase Amount. It is understood and agreed that the obligation of
the Servicer to purchase any Contract (including any Liquidated Contract) with
respect to which such a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against the Servicer for
such breach available to the Certificateholders, the Noteholders, the Owner
Trustee on behalf of Certificateholders or the Indenture Trustee on behalf of
Noteholders; provided, however, that the Servicer shall indemnify the Owner
Trustee, the Backup Servicer, the Trust, the Indenture Trustee, the Noteholders
and the Certificateholders against all costs, expenses, losses, damages, claims
and liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or
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incurred by any of them as a result of third party claims arising out of the
events or facts giving rise to such breach.
Section 3.8. Total Servicing Fee; Payment of Certain Expenses by
Servicer. On each Distribution Date, the Servicer shall be entitled to receive
out of the Collection Account the Basic Servicing Fee and any Supplemental
Servicing Fee for the related Monthly Period pursuant to Section 4.6. The
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under this Agreement (including taxes imposed on the Servicer,
expenses incurred in connection with distributions and reports to
Certificateholders and Noteholders and all other fees and expenses of the Trust,
including taxes levied or assessed against the Trust, and claims against the
Trust in respect of indemnification, unless such fees, expenses or claims in
respect of indemnification are expressly stated not to be for the account of the
Servicer. The Servicer shall be liable for the fees and expenses of the Owner
Trustee, the Administrator, the Indenture Trustee, the Custodian, the Backup
Servicer and the Independent Accountants. Notwithstanding the foregoing, if the
Servicer shall not be Green Tree, a successor to Green Tree as Servicer
permitted by Section 7.2 or an Affiliate of any of the foregoing, such Servicer
shall not be liable for taxes levied or assessed against the Trust or claims
against the Trust in respect of indemnification.
Section 3.9. Servicer's Certificate. No later than 10:00 a.m. New
York City time on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee, the Backup Servicer and each Rating Agency
a Servicer's Certificate executed by a Responsible Officer of the Servicer
containing, among other things, (i) all information necessary to enable the
Indenture Trustee to make any withdrawal and deposit required by Section 5.1, to
make the distributions required by Sections 4.6 and 4.7(b), to make the
withdrawals, distributions and deliveries required by Section 4.7(a) and to
determine the amount to which the Servicer is entitled to be reimbursed or has
been reimbursed during the related Monthly Period for Monthly Advances pursuant
to Section 4.4(c), (ii) all information necessary to enable the Indenture
Trustee to send the statements to Noteholders and Certificateholders and
required by Section 4.9, (iii) a listing of all Warranty Contracts and
Administrative Contracts purchased as of the related Deposit Date, identifying
the Contracts so purchased and (iv) all information necessary to enable the
Indenture Trustee to reconcile all deposits to, and withdrawals from, the
Collection Account for the related Monthly Period and Distribution Date,
including the accounting required by Section 4.8. Contracts purchased by the
Servicer or by the Seller on the related Deposit Date and each Contract which
became a Liquidated Contract or which was paid in full during the related
Monthly Period shall be identified by account number (as set forth in the
Schedule of Contracts). A copy of such certificate may be obtained by any
Certificateholder or Noteholder (or by a Certificate Owner or Note Owner, upon
certification that such Person is a Certificate Owner or Note Owner and payment
of any expenses associated with the distribution thereof) by a request in
writing to the Indenture Trustee addressed to the Corporate Trust Office. In
addition to the
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information set forth in the preceding sentence, the Servicer's Certificate
delivered to the Indenture Trustee on the Determination Date shall also contain
the following information: the Delinquency Ratio, Average Delinquency Ratio,
Default Rate, Average Default Rate, Net Loss Rate and Average Net Loss Rate for
such Determination Date.
Section 3.10. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee, the Backup Servicer and each Rating Agency, on or before March 31 (or
90 days after the end of the Servicer's fiscal year, if other than December 31)
of each year, beginning on March 31, 199_, an officer's certificate signed by
any Responsible Officer of the Servicer, dated as of December 31 (or other
applicable date) of the immediately preceding year, stating that (i) a review of
the activities of the Servicer during the preceding 12-month period (or such
other period as shall have elapsed from the Closing Date to the date of the
first such certificate) and of its performance under this Agreement has been
made under such officer's supervision, and (ii) to such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Seller or the Servicer shall deliver to the Owner Trustee, the
Indenture Trustee, the Backup Servicer, the Servicer or the Seller (as
applicable) and each Rating Agency promptly after having obtained knowledge
thereof, but in no event later than 2 Business Days thereafter, written notice
in an officer's certificate of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Termination Event under any
other clause of Section 8.1.
Section 3.11. Annual Independent Accountants' Report.
On or before May 1 of each year, commencing May 1, 199_, the Servicer
at its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants (the "Indenture
Accountants") to furnish a statement (the "Accountants' Report) to the Owner
Trustee, the Indenture Trustee, the Backup Servicer and each Rating Agency to
the effect that such firm has examined certain documents and records relating to
the servicing of the retail installment and promissory notes under pooling and
servicing agreements substantially similar one to another (such statement to
have attached thereto a schedule setting forth the pooling and servicing
agreements covered thereby, including this Agreement) and that, on the basis of
such examination, conducted substantially in compliance with generally accepted
auditing standards, such servicing has been conducted in compliance with such
pooling and servicing agreements, except for such significant exceptions or
errors in
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records that, in the opinion of such firm, generally accepted auditing standards
requires it to report.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Seller and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(c) A copy of the Accountants' Report may be obtained by any
Certificateholder or Noteholder (or by any Certificate Owner or Note Owner, upon
certification that such Person is a Certificate Owner or Note Owner and payment
of any expenses associated with the distribution thereof) by a request in
writing to the Indenture Trustee addressed to the Corporate Trust Office.
Section 3.12. Access to Certain Documentation and Information
Regarding Contracts. The Servicer shall provide to representatives of the
Owner Trustee, Indenture Trustee and the Backup Servicer reasonable access to
the documentation regarding the Contracts. The Servicer shall provide such
access to any Certificateholder or Noteholder (or Certificate Owner or Note
Owner) only in such cases where the Servicer is required by applicable statutes
or regulations (whether applicable to the Servicer or to such Certificateholder
or Certificate Owner or Noteholder or Note Owner) to permit such
Certificateholder or Noteholder (or Certificate Owner or Note Owner) to review
such documentation. In each case, such access shall be afforded without charge
but only upon reasonable request and during normal business hours. Nothing in
this Section shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section. Any
Certificateholder or Noteholder (or Certificate Owner or Note Owner), by its
acceptance of a Certificate or Note (or by acquisition of its beneficial
interest therein), as applicable, shall be deemed to have agreed to keep
confidential and not to use for its own benefit any information obtained by it
pursuant to this Section, except as may be required by applicable law.
Section 3.13. Monthly Tape. On or before the third Business Day,
but in no event later than the fifth calendar day, of each month, the Servicer
will deliver to the Indenture Trustee and the Backup Servicer a computer tape
and a diskette (or any other electronic transmission acceptable to the Indenture
Trustee and the Backup Servicer) in a format acceptable to the Indenture Trustee
and the Backup Servicer containing the information with respect to the Contracts
as of the preceding Accounting Date necessary for preparation of the Servicer's
Certificate relating to the immediately succeeding Determination Date and
necessary to determine the application of collections as provided in Section
4.3. The Backup Servicer shall use such tape or diskette (or other electronic
transmission acceptable to the Indenture Trustee and the Backup Servicer) to
verify the Servicer's Certificate delivered by the Servicer, and the Backup
Servicer shall notify the Servicer of any
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discrepancies on or before the second Business Day following the Determination
Date. In the event that the Backup Servicer reports any discrepancies, the
Servicer and the Backup Servicer shall attempt to reconcile such discrepancies
prior to the related Deficiency Claim Date, but in the absence of a
reconciliation, the Servicer's Certificate shall control for the purpose of
calculations and distributions with respect to the related Distribution Date. In
the event that the Backup Servicer and the Servicer are unable to reconcile
discrepancies with respect to a Servicer's Certificate by the related
Distribution Date, the Servicer shall cause the Independent Accountants, at the
Servicer's expense, to audit the Servicer's Certificate and, prior to the third
Business Day, but in no event later than the fifth calendar day, of the
following month, reconcile the discrepancies. The effect, if any, of such
reconciliation shall be reflected in the Servicer's Certificate for such next
succeeding Determination Date. Other than the duties specifically set forth in
this Agreement, the Backup Servicer shall have no obligations hereunder,
including, without limitation, to supervise, verify, monitor or administer the
performance of the Servicer. The Backup Servicer shall have no liability for any
actions taken or omitted by the Servicer. The duties and obligations of the
Backup Servicer shall be determined solely by the express provisions of this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Backup Servicer.
Section 3.14. Retention and Termination of Servicer. The Servicer
hereby covenants and agrees to act as such under this Agreement until such time
as it has resigned, as authorized by Section 7.5, or been terminated pursuant to
Section 8.2, and, in either case, a successor Servicer has been appointed
pursuant to Section 8.3 subject to and in accordance with the terms of this
Agreement.
Section 3.15. Fidelity Bond. The Servicer shall maintain a fidelity
bond in such form and amount as is customary for entities acting as custodian of
funds and documents in respect of consumer contracts on behalf of institutional
investors.
Section 3.16. Duties of the Servicer under the Indenture. The
Servicer shall, and hereby agrees that it will, perform on behalf of the Trust
and the Owner Trustee the following duties of the Trust or the Owner Trustee, as
applicable, under the Indenture (references are to the applicable Sections in
the Indenture):
(a) the direction to the Paying Agents, if any, to deposit moneys with
the Indenture Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the Indenture Collateral and each other instrument and agreement included
in the Trust Estate (Section 3.04);
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(c) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and other
instruments, in accordance with Section 3.05 of the Indenture, necessary to
protect the Trust Estate (Section 3.05);
(d) the delivery of the Opinion of Counsel on the Closing Date and the
annual delivery of Opinions of Counsel, in accordance with Section 3.06 of the
Indenture, as to the Trust Estate, and the annual delivery of the Officers'
Certificate and certain other statements, in accordance with Section 3.09 of the
Indenture, as to compliance with the Indenture (Sections 3.06 and 3.09);
(e) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the Indenture
(Section 3.10(b));
(f) the monitoring of the Issuer's obligations as to the satisfaction
and discharge of the Indenture and the preparation of an Officers' Certificate
and the obtaining of the Opinion of Counsel and the Independent Certificate
relating thereto (Section 4.01);
(g) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any written
instruments necessary in connection with the resignation or removal of any co-
trustee or separate trustee (Sections 6.08 and 6.10);
(h) the opening of one or more accounts in the Trust's name, the
preparation of Issuer Orders, Officers' Certificates and Opinions of Counsel and
all other actions necessary with respect to investment and reinvestment of funds
in the Trust Accounts (Sections 8.02 and 8.03);
(i) the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures (Sections 9.01,
9.02 and 9.03);
(j) the preparation of all Officers' Certificates, Opinions of Counsel
and Independent Certificates with respect to any requests by the Issuer to the
Indenture Trustee to take any action under the Indenture (Section 11.01(a));
(k) the preparation and delivery of Officers' Certificates and the
obtaining of Independent Certificates, if necessary, for the release of property
from the lien of the Indenture (Section 11.01(b)); and
(l) the recording of the Indenture, if applicable (Section 11.15).
In addition to the duties of the Servicer set forth above, the Servicer shall,
and hereby agrees that it will, prepare, distribute and file any reports
required by
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Section 313(b) of the Trust Indenture Act of 1939 as a result of any transfer of
Subsequent Contracts. Such distribution and filing is to be effected by the
Servicer's distribution and filing of the Servicer's Certificate.
Section 3.17. Certain Duties of the Servicer under the Trust
Agreement. The Servicer shall, and hereby agrees that it will, monitor the
Trust's compliance with all applicable provisions of state and federal
securities laws, notify the Trust and the Administrator of any actions to be
taken by the Trust necessary for compliance with such laws and prepare on behalf
of the Trust and the Administrator all notices, filings or other documents or
instruments required to be filed under such laws.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS AND NOTEHOLDERS
Section 4.1. Trust Accounts.
(a) The Servicer shall establish the Collection Account in the name of
the Indenture Trustee for the benefit of the Certificateholders and the Note
Owners. The Collection Account shall be an Eligible Account and initially shall
be a segregated trust account established with the Indenture Trustee and
maintained with the Indenture Trustee.
(b) The Servicer shall establish the Pre-Funding Account in the name
of the Indenture Trustee for the benefit of the Certificateholders and the Note
Owners. The Pre-Funding Account shall be an Eligible Account and initially
shall be a segregated trust account established with the Indenture Trustee and
maintained with the Indenture Trustee.
(c) The Servicer shall establish the Note Distribution Account in the
name of the Indenture Trustee for the benefit of the Note Owners. The Note
Distribution Account shall be an Eligible Account and initially shall be a
segregated trust account established with the Indenture Trustee and maintained
with the Indenture Trustee.
(d) The Servicer shall establish the Reserve Account (including the
Class A-1 Holdback Subaccount) in the name of the Indenture Trustee for the
benefit of the Certificateholders and the Note Owners. The Reserve Account
shall be an Eligible Account and initially shall be a segregated trust account
established with the Indenture Trustee and maintained with the Indenture
Trustee.
(e) All amounts held in the Collection Account, the Pre-Funding
Account, the Note Distribution Account and the Reserve Account (collectively,
the
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"Trust Accounts") shall, to the extent permitted by applicable laws, rules and
regulations, be invested, as directed by the Servicer, in Eligible Investments
that, in the case of amounts held in the Collection Account, the Note
Distribution Account and the Reserve Account, mature not later than one Business
Day prior to the Distribution Date for the Monthly Period to which such amounts
relate, and, in the case of amounts held in the Pre-Funding Account, mature in
such amounts and on such dates, not later than the last day of the Funding
Period, as the Servicer may direct. Any such written direction shall certify
that any such investment is authorized by this Section 4.1. Investments in
Eligible Investments shall be made in the name of the Indenture Trustee on
behalf of the Trust, and such investments shall not be sold or disposed of prior
to their maturity. Any investment of funds in the Trust Accounts shall be made
in Eligible Investments held by a financial institution with respect to which
(a) such institution has noted the Indenture Trustee's interest therein by book
entry or otherwise and (b) a confirmation of the Indenture Trustee's interest
has been sent to the Indenture Trustee by such institution, provided that such
Eligible Investments are (i) specific certificated securities (as such term is
used in Minn. Stat. (S) 336.8-313(d)(i)), and (ii) either (A) in the possession
of such institution or (B) in the possession of a clearing corporation (as such
term is used in Minn. Stat. (S) 336.8-313(g)) in New York or Minnesota,
registered in the name of such clearing corporation, not endorsed for collection
or surrender or any other purpose not involving transfer, not containing any
evidence of a right or interest inconsistent with the Indenture Trustee's
security interest therein, and held by such clearing corporation in an account
of such institution. Subject to the other provisions hereof, the Indenture
Trustee shall have sole control over each such investment and the income
thereon, and any certificate or other instrument evidencing any such investment,
if any, shall be delivered directly to the Indenture Trustee or its agent,
together with each document of transfer, if any, necessary to transfer title to
such investment to the Indenture Trustee in a manner which complies with this
Section 4.1. All interest, dividends, gains upon sale and other income from, or
earnings on, investments of funds in the Trust Accounts shall be deposited in
the Collection Account and distributed on the next Distribution Date pursuant to
Section 4.6. The Servicer shall deposit in the applicable Trust Account an
amount equal to any net loss on such investments immediately as realized.
(f) On the Closing Date, the Servicer shall deposit in the Collection
Account (i) all Scheduled Payments and prepayments of Initial Contracts received
by the Servicer after the Initial Cutoff Date and on or prior to the Business
Day immediately preceding the Closing Date and (ii) all Liquidation Proceeds and
proceeds of Insurance Policies realized in respect of a Financed Product and
applied by the Servicer after the Initial Cutoff Date. On each Subsequent
Transfer Date, the Servicer shall deposit in the Collection Account (x) all
Scheduled Payments and prepayments of the related Subsequent Contracts received
by the Servicer after the related Subsequent Cutoff Date and on or prior to the
Business Day immediately preceding the related Subsequent Transfer Date and (y)
all Liquidation Proceeds and
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proceeds of Insurance Policies related in respect of a Financed Product and
applied by the Servicer after the related Subsequent Cutoff Date.
Section 4.2. Collections.
(a) The Servicer shall establish the Subcollection Account in the name
of the Indenture Trustee for the benefit of the Certificateholders and the
Noteholders. The Subcollection Account shall be an Eligible Account and shall
initially be established with the Indenture Trustee. The Servicer shall remit
directly to the Subcollection Account without deposit into any intervening
account all payments by or on behalf of the Obligors on the Contracts and all
Liquidation Proceeds received by the Servicer, in each case, as soon as
practicable, but in no event later than the Business Day after receipt thereof.
Within two days of deposit of payments into the Subcollection Account, the
Indenture Trustee shall transfer all amounts credited to the Subcollection
Account on account of such payments to the Collection Account. Amounts in the
Subcollection Account shall not be invested. Notwithstanding the foregoing, the
Servicer may utilize an alternative remittance schedule acceptable to the
Servicer if the Servicer provides to the Indenture Trustee written confirmation
from each Rating Agency that such alternative remittance schedule will not
result in the downgrading or withdrawal by the Rating Agency of the rating then
assigned to the Certificates or the Notes.
(b) Notwithstanding the provisions of subsection (a) hereof, the
Servicer will be entitled to be reimbursed from amounts on deposit in the
Collection Account with respect to a Monthly Period for amounts previously
deposited in the Collection Account but later determined by the Servicer to have
resulted from mistaken deposits or postings or checks returned for insufficient
funds. The amount to be reimbursed hereunder shall be paid to the Servicer on
the related Distribution Date pursuant to Section 4.6(iii) upon certification by
the Servicer of such amounts and the provision of such information to the
Indenture Trustee as may be necessary in the opinion of the Indenture Trustee to
verify the accuracy of such certification.
Section 4.3. Application of Collections. For the purposes of this
Agreement, all collections for a Monthly Period shall be applied by the Servicer
as follows:
(a) With respect to each Contract, payments by or on behalf of the
Obligor thereof (other than of Supplemental Servicing Fees with respect to such
Contract, to the extent collected) shall be applied to interest and principal
with respect to such Contract in accordance with the terms of such Contract.
With respect to each Liquidated Contract, Liquidation Proceeds shall be applied
to interest and principal with respect to such Contract in accordance with the
terms of such Contract, and then to any Insurance Add-On Amount due and payable
with respect to such Contract. The Servicer shall not be entitled to any
Supplemental Servicing Fees with respect to a Liquidated Contract.
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(b) With respect to each Contract that has become a Purchased Contract
on any Deposit Date, the Purchase Amount shall be applied, for purposes of this
Agreement only, to interest and principal on the Contract in accordance with the
terms of the Contract as if the Purchase Amount had been paid by the Obligor on
the Accounting Date. The Servicer shall not be entitled to any Supplemental
Servicing Fees with respect to such a Contract. Nothing contained herein shall
relieve any Obligor of any obligation relating to any Contract.
(c) All amounts collected that are payable to the Servicer as
Supplemental Servicing Fees hereunder shall be deposited in the Collection
Account and paid to the Servicer in accordance with Section 4.6(iii).
(d) All payments by or on behalf of an Obligor received with respect
to any Purchased Contract after the Accounting Date immediately preceding the
Deposit Date on which the Purchase Amount was paid by the Seller or the Servicer
shall be paid to the Seller or the Servicer, respectively, and shall not be
included in the Available Funds.
Section 4.4. Monthly Advances.
(a) If with respect to a Contract, the amounts deposited into the
Collection Account during a Monthly Period in respect of such Contract and
allocable to interest (determined in accordance with Section 4.3) is less than
an amount of interest equal to interest accrued on such Contract (for the number
of calendar days in such Monthly Period) (calculated according to the method
specified in the related retail installment sale contract or promissory note at
the APR on the Principal Balance of such Contract as of the Accounting Date
preceding such Distribution Date), the Servicer shall make a Monthly Advance
equal to the amount of such shortfall; provided, however, that the Servicer
shall not be required to make a Monthly Advance with respect to a Contract
extended pursuant to Section 3.2(b) for any Monthly Period during which no
Scheduled Payment is due according to the terms of such extension.
(b) On or before each Determination Date and prior to the delivery of
the Servicer's Certificate for such Determination Date pursuant to Section 3.9,
the Servicer shall deposit in the Collection Account the aggregate amount of
Monthly Advances required for the related Monthly Period in immediately
available funds (subject to Section 4.8).
(c) The Servicer shall be entitled to be reimbursed for Outstanding
Monthly Advances with respect to a Contract pursuant to Section 4.6(i) or
pursuant to Section 4.8 from the following sources with respect to such Contract
on any day subsequent to the Distribution Date in respect of which such Monthly
Advance was made: (i) subsequent payments by or on behalf of the Obligor with
respect to such Contract, (ii) collections of Liquidation Proceeds with respect
to such Contract if such
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Contract becomes a Liquidated Contract and (iii) payment of any Purchase Amount
with respect to such Contract if such Contract becomes a Purchased Contract. If
any Contract shall become a Liquidated Contract and the Servicer shall not have
been fully reimbursed for Outstanding Monthly Advances with respect to such
Contract from the sources of funds previously described in this paragraph, the
Servicer shall be entitled to reimbursement from collections on Contracts other
than the Contract in respect of which such Outstanding Monthly Advance shall
have been made.
Section 4.5. Additional Deposits. On or before each Deposit Date,
the Servicer shall deposit in the Collection Account the aggregate Purchase
Amounts with respect to Administrative Contracts and Warranty Contracts,
respectively. All such deposits of Purchase Amounts shall be made in
immediately available funds.
Section 4.6. Distributions. On each Distribution Date, the
Indenture Trustee shall (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date) distribute the
following amounts and in the order of priority specified below. Within each
order of priority, amounts shall be deemed withdrawn first from Available Funds
and second from the Reserve Account. Within priority (iv)(B), amounts shall be
deemed withdrawn first from amounts transferred pursuant to clause (iii) of
Section 4.7(b) or Section 5.1(c) and second from the Actual Funds.
(i) first, from the Actual Funds, (A) to the Trust for payment of
any taxes due and unpaid with respect to the Trust, to the extent such
taxes have not been previously paid by the Servicer pursuant to Section
3.8, and (B) then to the Servicer, the amount of Outstanding Monthly
Advances for which the Servicer is entitled to be reimbursed pursuant to
Section 4.4(c) and for which the Servicer has not previously been
reimbursed pursuant to Section 4.8;
(ii) second, from the Actual Funds then remaining on deposit in
the Collection Account, to the Owner Trustee, any accrued and unpaid fees
of the Owner Trustee in accordance with the Trust Agreement and including
amounts with respect to which the Administrator is entitled to be
reimbursed pursuant to the Administration Agreement; to the Indenture
Trustee, any accrued and unpaid fees of the Indenture Trustee in accordance
with the Indenture; to the Custodian, Backup Servicer, or Administrator
(including the Owner Trustee or Indenture Trustee if acting in any such
additional capacity), any accrued and unpaid fees (in each case, to the
extent such Person has not previously received such amount from the
Servicer), to the Backup Servicer, any transition expenses (not to exceed
$50,000) in accordance with Section 8.3;
(iii) third, from the Actual Funds then remaining on deposit in
the Collection Account, to the Servicer, the Basic Servicing Fee for the
related Monthly Period, any Supplemental Servicing Fees for the related
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Monthly Period, and any amounts specified in Section 4.2(b), to the extent
the Servicer has not reimbursed itself in respect of such amounts pursuant
to Section 4.8;
(iv) fourth, from the Actual Funds then remaining on deposit in
the Collection Account, to the Note Distribution Account, an amount equal
to the Noteholders' Interest Distributable Amount for such Distribution
Date;
(v) fifth, from the Actual Funds then remaining on deposit in the
Collection Account, to the Note Distribution Account, an amount equal to
the Noteholders' Principal Distributable Amount for such Distribution Date;
(vi) sixth, from the Actual Funds then remaining on deposit in
the Collection Account, to the Certificate Distribution Account, an amount
equal to the Class B Interest Distributable Amount for such Distribution
Date; and
(vii) seventh, from the Actual Funds then remaining on deposit
in the Collection Account, to the Certificate Distribution Account, an
amount equal to the Class B Principal Distributable Amount for such
Distribution Date.
Section 4.7. Pre-Funding Account.
(a) On the Closing Date, the Indenture Trustee will deposit, on behalf
of the Seller, in the Pre-Funding Account $__________ from the proceeds of the
sale of the Notes and the Class B Certificates. On each Subsequent Transfer
Date, the Servicer shall instruct the Indenture Trustee:
(i) to withdraw from the Pre-Funding Account the amount, if any,
by which the Requisite Reserve Amount for such Subsequent Transfer Date
exceeds the Reserve Amount, and to deposit such funds in the Reserve
Account,
(ii) to withdraw from the Pre-Funding Account the Class A-1
Holdback Amount, if any, for such Subsequent Transfer Date, and to deposit
such funds in the Class A--1 Holdback Subaccount,
(iii) to withdraw from the Pre-Funding Account the amount, if
any, on deposit therein in excess of the remaining Prefunded Amount, after
giving effect to the withdrawals specified in clauses (i) - (ii) above, and
to distribute such amount to or upon the order of the Seller upon
satisfaction of the conditions set forth in Section 2.4 with respect to
such transfer, and
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(iv) to withdraw from the Reserve Account an amount equal to the
excess, if any, of the Reserve Amount (after giving effect to withdrawals
from the Reserve Account pursuant to Section 5.1 on the immediately
following Distribution Date, if such Subsequent Transfer Date falls between
a Determination Date and the related Distribution Date) over the Requisite
Reserve Amount for such Subsequent Transfer Date and to distribute such
amount to or upon the order of the General Partners.
(b) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on or immediately following the end of the Funding Period) or
(y) the Pre-Funded Amount has been reduced to $100,000 or less on any
Distribution Date, in either case after giving effect to any reductions in the
Pre-Funded Amount on such Distribution Date pursuant to paragraph (a) above, the
Servicer shall provide written instructions to the Indenture Trustee to withdraw
from the Pre-Funding Account on such Distribution Date (i) an amount equal to
the sum of the Class A-1 Prepayment Amount, the Class A-2 Prepayment Amount,
the Class A-3 Prepayment Amount, the Class A-4 Prepayment Amount, the Class
A-5 Prepayment Amount, the Class A-6 Prepayment Amount and deposit such amount
in the Note Distribution Account, and (ii) an amount equal to the Class B
Prepayment Amount and deposit such amount in the Certificate Distribution
Account. Any remaining funds on deposit in the Pre-Funding Account shall be
distributed to the General Partners. If the funds on deposit in the Pre-Funding
Account are less than the sum of the amounts described in clauses (i) and (ii)
above, then the Servicer shall provide written instructions to the Indenture
Trustee to withdraw the funds on deposit in the Pre-Funding Account and deposit
such funds in the Note Distribution Account and Certificate Distribution
Account, pro rata in accordance with the amounts specified in clauses (i) and
(ii) above.
(c) If the Pre-Funded Amount is greater than $100,000 at the end of
the Funding Period, the Seller will (x) deposit into the Note Distribution
Account an amount equal to the sum of the Class A-1 Prepayment Premium, the
Class A-2 Prepayment Premium, the Class A-3 Prepayment Premium, the Class A-4
Prepayment Premium, the Class A-5 Prepayment Premium, and the Class A-6
Prepayment Premium and (y) deposit into the Certificate Distribution Account an
amount equal to the Class B Prepayment Premium.
Section 4.8. Net Deposits. Subject to payment by the Servicer of
amounts otherwise payable pursuant to Section 4.6(i) and provided that no
Servicer Termination Event shall have occurred and be continuing with respect to
such Servicer, the Servicer may make the remittances to be made by it pursuant
to Sections 4.2, 4.4 and 4.5 net of amounts (which amounts may be netted prior
to any such remittance for a Monthly Period) to be distributed to it pursuant to
Sections 3.8, 4.2(b) and 4.6(i); provided, however, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and, provided, further, that
if an error is made by the Servicer in calculating the amount to be deposited or
retained by it, with the result that an
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amount less than required is deposited in the Collection Account, the Servicer
shall make a payment of the deficiency to the Collection Account, immediately
upon becoming aware, or receiving notice from the Indenture Trustee, of such
error.
Section 4.9. Statements to Certificateholders and Noteholders.
(a) On each Distribution Date, the Owner Trustee shall include with
each distribution to each Class B Certificateholder, a statement (which
statement shall also be provided to each Rating Agency) based on information in
the Servicer's Certificate delivered on the related Determination Date pursuant
to Section 3.9, setting forth for the Monthly Period relating to such
Distribution Date the following information:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the amount of such distribution payable out of amounts
withdrawn from the Reserve Account;
(iv) the Class B Certificate Balance and the remaining balance of
each class of Notes (after giving effect to distributions made on such
Distribution Date);
(v) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall,
the Class A-4 Interest Carryover Shortfall, the Class A-5 Interest
Carryover Shortfall, the Class A-6 Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, the Class B Interest Carryover
Shortfall and the Class B Principal Carryover Shortfall, if any, and the
change in such amounts from the preceding statement;
(vi) the amount of fees paid by the Trust with respect to such
Monthly Period;
(vii) for Distribution Dates during the Funding Period, the
remaining Pre-Funded Amount and the remaining Reserve Amount;
(viii) for the Distribution Date on or immediately following the
end of the Funding Period, the Class B Prepayment Amount, the Class B
Prepayment Premium, if any, and the remaining Reserve Amount that has not
been distributed pursuant to Section 4.6 or to the General Partners; and
(ix) the Class B Pool Factor (after giving effect to
distributions made on such Distribution Date).
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Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a Class
B Certificate.
(b) On each Payment Date, the Indenture Trustee shall include with
each distribution to each Noteholder, a statement (which statement shall also be
provided to each Rating Agency) based on information in the Servicer's
Certificate delivered on the related Determination Date pursuant to Section 3.9,
setting forth for the Monthly Period relating to such Payment Date the following
information with respect to each class of Notes:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the amount of such distribution payable out of amounts
withdrawn from the Reserve Account or the Class A-1 Holdback Subaccount;
(iv) the outstanding principal balance of the Notes and Class B
Certificate Balance (after giving effect to distributions made on such
Payment Date);
(v) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover Shortfall,
the Class A-4 Interest Carryover Shortfall, the Class A-5 Interest
Carryover Shortfall, the Class A-6 Interest Carryover Shortfall, the
Noteholders' Principal Carryover Shortfall, the Class B Interest Carryover
Shortfall and the Class B Principal Carryover Shortfall, if any, and the
change in such amounts from the preceding statement;
(vi) the amount of fees paid by the Trust with respect to such
Monthly Period;
(vii) for Payment Dates during the Funding Period, the remaining
Pre-Funded Amount, the remaining Reserve Amount and the amount on deposit
in the Class A-1 Holdback Subaccount;
(viii) for the Payment Date on or immediately following the end
of the Funding Period, the Class A-1 Prepayment Amount, the Class A-2
Prepayment Amount, the Class A-3 Prepayment Amount, the Class A-4
Prepayment Amount, the Class A-5 Prepayment Amount, the Class A-6
Prepayment Amount, the Class A-1 Prepayment Premium, the Class A-2
Prepayment Premium, the Class A-3 Prepayment Premium, the Class A-4
Prepayment Premium, the Class A-5 Prepayment Premium and the Class A-6
Prepayment Premium, if any, and the remaining Reserve Amount that
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has not been distributed pursuant to Section 4.6 or to the General
Partners; and
(ix) the Note Pool Factor with respect to each class of Notes
(after giving effect to distributions made on such Payment Date).
Each amount set forth pursuant to subclauses (i) through (iv) above may be
expressed as a dollar amount per $1,000 of original principal balance of a Note.
(d) Certificate Owners may obtain copies of the certificates delivered
by the Owner Trustee pursuant to subsections (a) and (b) above upon written
request to the Owner Trustee at the Corporate Trust Office (together with a
certification that such Person is a Certificate Owner and payment of any
expenses associated with the distribution thereof). Note Owners may obtain
copies of the statements delivered by the Indenture Trustee pursuant to
subsection (c) above upon written request to the Indenture Trustee at its
Corporate Trust Office (together with a certification that such Person is a Note
Owner and payment of any expenses associated with the distribution thereof).
Section 4.10. Indenture Trustee as Agent. The Indenture Trustee, in
holding all funds in the Trust Accounts and in making distributions as provided
in this Agreement, shall act solely on behalf of and as agent for the
Certificateholders and the Noteholders.
Section 4.11. Eligible Accounts. Any account which is required to
be established as an Eligible Account pursuant to this Agreement and which
ceases to be an Eligible Account shall within 5 Business Days (or such longer
period, not to exceed 30 days, as to which each Rating Agency may consent) be
established as a new account which shall be an Eligible Account and any cash
and/or any investments shall be transferred to such new account.
ARTICLE V
THE RESERVE ACCOUNT
Section 5.1. Withdrawals from the Reserve Account.
(a) In the event that the Servicer's Certificate with respect to any
Determination Date shall state that the amount of Available Funds with respect
to such Determination Date is less than the sum of the amounts payable on the
related Distribution Date pursuant to clauses (i) through (vii) of Section 4.6,
then on the Draw Date immediately preceding such Distribution Date, the
Indenture Trustee shall (i) withdraw amounts on deposit in the Reserve Account,
other than any funds in the Class A-1 Holdback Subaccount (up to the amount by
which the amounts payable on the related Distribution Date pursuant to clauses
(i) through
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(vii) of Section 4.6 exceed the amount of Available Funds with respect to such
Determination Date) and (ii) deposit the amounts so withdrawn from the Reserve
Account into the Collection Account. On each Distribution Date, any funds on
deposit in the Reserve Account (other than funds on deposit in the Class A-1
Holdback Subaccount) in excess of the Requisite Reserve Amount (after giving
effect to any withdrawals on the immediately preceding Draw Date as described
above) shall be paid to the General Partners.
(b) In the event that the Servicer's Certificate with respect to the
Determination Date related to the Class A-1 Final Scheduled Distribution Date
shall state that the unpaid principal balance of the Class A-1 Notes (after
giving effect to the distribution of the Available Funds pursuant to clauses (i)
- - (v) of Section 4.6 for such Distribution Date), is greater than zero, then on
the Draw Date immediately preceding such Distribution Date the Indenture Trustee
shall withdraw an amount equal to such unpaid principal balance from funds on
deposit in the Class A-1 Holdback Subaccount (or the amount of funds on deposit
in the Class A-1 Holdback Subaccount, if less) and deposit such funds in the
Note Distribution Account for distribution to the Class A-1 Noteholders on such
Distribution Date. Funds in the Class A-1 Holdback Subaccount shall not be
available to pay any other amounts. Any funds remaining in the Class A-1
Holdback Subaccount, after withdrawal of any such amount on the Class A-1 Final
Scheduled Distribution Date, shall be released to the General Partners.
ARTICLE VI
THE SELLER
Section 6.1. Liability of Seller.
(a) The Seller (in its capacity as such) shall be liable hereunder
only to the extent of the obligations in this Agreement specifically undertaken
by the Seller and the representations made by the Seller.
Section 6.2. Limitation on Liability of Seller and Others. The
Seller and any director or officer or employee or agent of the Seller may rely
in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. The Seller shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
obligations as Seller of the Contracts under this Agreement and that in its
opinion may involve it in any expense or liability.
Section 6.3. Seller May Own Certificates or Notes. Each of the
Seller and any Affiliate of the Seller may in its individual or any other
capacity become the owner or pledgee of Certificates or Notes with the same
rights as it would have if it
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were not the Seller or an Affiliate thereof except as otherwise specifically
provided herein or in the Related Documents. Class B Certificates or Notes so
owned by or pledged to the Seller or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement or any Related
Document, without preference, priority, or distinction as among all of the
Certificates or Notes, provided that any Class B Certificates or Notes owned by
the Seller or any Affiliate thereof, during the time such Class B Certificates
or Notes are owned by them, shall be without voting rights for any purpose set
forth in this Agreement or any Related Document. The Seller shall notify the
Owner Trustee and the Indenture Trustee promptly after it or any of its
Affiliates become the owner or pledgee of a Class B Certificate or Note.
ARTICLE VII
THE SERVICER
Section 7.1. Liability of Servicer; Indemnities.
(a) The Servicer (in its capacity as such) shall be liable hereunder
only to the extent of the obligations in this Agreement specifically undertaken
by the Servicer and the representations made by the Servicer.
(b) The Servicer shall defend, indemnify and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, their respective
officers, directors, agents and employees, the Certificateholders and the
Noteholders from and against any and all costs, expenses, losses, damages,
claims and liabilities, including reasonable fees and expenses of counsel and
expenses of litigation arising out of or resulting from the use, ownership or
operation by the Servicer or any Affiliate thereof of any Financed Product;
(c) The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, their respective
officers, directors, agents and employees, the Certificateholders and the
Noteholders from and against any taxes that may at any time be asserted against
the Trust, the Owner Trustee, the Indenture Trustee, the Backup Servicer, the
Certificateholders or the Noteholders with respect to the transactions
contemplated in this Agreement, including, without limitation, any sales, gross
receipts, general corporation, tangible personal property, privilege or license
taxes (but not including any taxes asserted with respect to, and as of the date
of, the sale of the Contracts and the other Trust Property to the Trust or the
issuance and original sale of the Certificates and the Notes, or federal or
other income taxes arising out of distributions on the Certificates) and costs
and expenses in defending against the same;
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(d) The Servicer shall indemnify, defend and hold harmless the Trust,
the Owner Trustee, the Indenture Trustee, the Backup Servicer, their respective
officers, directors, agents and employees, the Certificateholders and the
Noteholders from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Trust, the Owner
Trustee, the Indenture Trustee, the Backup Servicer, the Certificateholders or
the Noteholders through the breach of this Agreement, the negligence, willful
misfeasance, or bad faith of the Servicer in the performance of its duties under
this Agreement or by reason of reckless disregard of its obligations and duties
under this Agreement; and
(e) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee, in its individual capacity, its officers, directors, agents and
employees, from and against all costs, taxes (other than income taxes on fees
and expenses payable to the Owner Trustee), expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in the Trust Agreement and the
Related Documents, except to the extent that such cost, taxes (other than income
taxes), expense, loss, claim, damage or liability (A) is due to the willful
misfeasance or gross negligence of the Owner Trustee, or (B) arises from the
Owner Trustee's breach of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement; provided, however, that amounts payable
under this paragraph shall be increased by the amount of income taxes actually
paid by the Owner Trustee in respect of any indemnity payment unless the Owner
Trustee received or can reasonably be expected to receive a tax deduction for
the related loss or cost.
(f) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.
Section 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or Backup Servicer.
(a) The Servicer shall not merge or consolidate with any other person,
convey, transfer or lease substantially all its assets as an entirety to another
Person, or permit any other Person to become the successor to the Servicer's
business unless, after the merger, consolidation, conveyance, transfer, lease or
succession, the successor or surviving entity shall be an Eligible Servicer and
shall be capable of fulfilling the duties of the Servicer contained in this
Agreement. Any corporation (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party, (iii) which acquires by conveyance, transfer, or
lease substantially all of the assets of the Servicer, or (iv) succeeding to the
business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the
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Servicer under this Agreement and, whether or not such assumption agreement is
executed, shall be the successor to the Servicer under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties to this Agreement, anything in this Agreement to the contrary
notwithstanding; provided, however, that nothing contained herein shall be
deemed to release the Servicer from any obligation. The Servicer shall provide
notice of any merger, consolidation or succession pursuant to this Section
7.2(a) to the Owner Trustee, the Indenture Trustee and each Rating Agency.
Notwithstanding the foregoing, the Servicer shall not merge or consolidate with
any other Person or permit any other Person to become a successor to the
Servicer's business, unless (x) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.6 shall
have been breached (for purposes hereof, such representations and warranties
shall speak as of the date of the consummation of such transaction), (y) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 7.2(a) and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and (z) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel, stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Owner Trustee in the Trust Property and reciting the details of the
filings or (B) no such action shall be necessary to preserve and protect such
interest.
(b) Any corporation (i) into which the Backup Servicer may be merged
or consolidated, (ii) resulting from any merger or consolidation to which the
Backup Servicer shall be a party, (iii) which acquires by conveyance, transfer
or lease substantially all of the assets of the Backup Servicer, or (iv)
succeeding to the business of the Backup Servicer, in any of the foregoing cases
shall execute an agreement of assumption to perform every obligation of the
Backup Servicer under this Agreement and, whether or not such assumption
agreement is executed, shall be the successor to the Backup Servicer under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement, anything in this Agreement to the
contrary notwithstanding; provided, however, that nothing contained herein shall
be deemed to release the Backup Servicer from any obligation.
Section 7.3. Limitation on Liability of Servicer, Backup Servicer and
Others.
(a) Neither the Servicer, the Backup Servicer nor any of the directors
or officers or employees or agents of the Servicer or Backup Servicer shall be
under any liability to the Trust, the Certificateholders or the Noteholders,
except as provided in this Agreement, for any action taken or for refraining
from the taking of any action pursuant to this Agreement; provided, however,
that this
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provision shall not protect the Servicer, the Backup Servicer or any such Person
against any liability that would otherwise be imposed by reason of a breach of
this Agreement or willful misfeasance, bad faith or negligence (excluding errors
in judgment) in the performance of duties, by reason of reckless disregard of
obligations and duties under this Agreement or any violation of law by the
Servicer, Backup Servicer or such Person, as the case may be; provided further,
that this provision shall not affect any liability to indemnify the Owner
Trustee and the Indenture Trustee for costs, taxes, expenses, claims,
liabilities, losses or damages paid by the Owner Trustee or the Indenture
Trustee, each in its individual capacity. The Servicer, the Backup Servicer and
any director, officer, employee or agent of the Servicer or Backup Servicer may
rely in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.
(b) The Backup Servicer shall not be liable for any obligation of the
Servicer contained in this Agreement, and the Owner Trustee, the Indenture
Trustee, the Seller, the Noteholders and the Certificateholders shall look only
to the Servicer to perform such obligations.
Section 7.4. Delegation of Duties. The Servicer may delegate duties
under this Agreement to an Affiliate of Green Tree with the prior written
consent of the Indenture Trustee, the Owner Trustee and the Backup Servicer.
The Servicer also may at any time perform the specific duty of repossession of
Financed Products through sub-contractors who are in the business of servicing
Contracts similar to the Contracts and may perform other specific duties through
such sub-contractors, provided, however, that no such delegation or sub-
contracting duties by the Servicer shall relieve the Servicer of its
responsibility with respect to such duties. Neither Green Tree or any other
party acting as Servicer hereunder shall appoint any subservicer hereunder
without the prior written consent of the Indenture Trustee, the Owner Trustee
and the Backup Servicer.
Section 7.5. Servicer and Backup Servicer Not to Resign. Subject to
the provisions of Section 7.2, neither the Servicer nor the Backup Servicer
shall resign from the obligations and duties imposed on it by this Agreement as
Servicer or Backup Servicer except upon a determination that by reason of a
change in legal requirements the performance of its duties under this Agreement
would cause it to be in violation of such legal requirements in a manner which
would have a material adverse effect on the Servicer or the Backup Servicer, as
the case may be, and a Certificate Majority and Note Majority does not elect to
waive the obligations of the Servicer or the Backup Servicer, as the case may
be, to perform the duties which render it legally unable to act or to delegate
those duties to another Person. Any such determination permitting the
resignation of the Servicer or Backup Servicer shall be evidenced by an Opinion
of Counsel to such effect delivered and acceptable to the Owner Trustee and the
Indenture Trustee. No resignation of the Servicer shall become effective until
the Backup Servicer or a successor Servicer that is an Eligible Servicer shall
have assumed the responsibilities and obligations of the
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Servicer. No resignation of the Backup Servicer shall become effective until a
Person that is an Eligible Servicer shall have assumed the responsibilities and
obligations of the Backup Servicer; provided, however, that in the event a
successor Backup Servicer is not appointed within 60 days after the Backup
Servicer has given notice of its resignation and has provided the Opinion of
Counsel required by this Section 7.5, the Backup Servicer may petition a court
for its removal.
ARTICLE VIII
SERVICER TERMINATION EVENTS
Section 8.1. Servicer Termination Event. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deliver to the Indenture Trustee
for distribution to Certificateholders or Noteholders any proceeds or payment
required to be so delivered under the terms of this Agreement that continues
unremedied for a period of two Business Days (one Business Day with respect to
payment of Purchase Amounts) after written notice is received by the Servicer
from the Indenture Trustee or after discovery of such failure by a Responsible
Officer of the Servicer;
(b) Failure by the Servicer to deliver to the Indenture Trustee and
the Owner Trustee the Servicer's Certificate by the fourth Business Day prior to
the Distribution Date, or failure on the part of the Servicer to observe its
covenants and agreements set forth in Section 7.2(a);
(c) Failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement, which failure (i) materially and adversely affects the rights
of Certificateholders or Noteholders, and (ii) continues unremedied for a period
of 30 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Owner Trustee,
the Indenture Trustee or any Certificateholder or Noteholder;
(d) (i) The commencement of an involuntary case under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law with respect to the
Servicer or the Seller and such case is not dismissed within 60 days; or (ii)
the entry of a decree or order for relief by a court or regulatory authority
having jurisdiction in respect of the Servicer or the Seller in an involuntary
case under the federal bankruptcy laws, as now or hereafter in effect, or
another present or future, federal or state, bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or the Seller
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or of any substantial part of their respective properties or ordering the
winding up or liquidation of the affairs of the Servicer or the Seller; or
(e) The commencement by the Servicer or the Seller of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future, federal or state, bankruptcy, insolvency or similar law, or
the consent by the Servicer or the Seller to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Servicer or the Seller or of any substantial
part of its property or the making by the Servicer or the Seller of an
assignment for the benefit of creditors or the failure by the Servicer or the
Seller generally to pay its debts as such debts become due or the taking of
corporate action by the Servicer or the Seller in furtherance of any of the
foregoing; or
(f) Any representation, warranty or statement of the Servicer or the
Seller made in this Agreement or any certificate, report or other writing
delivered pursuant hereto shall prove to be incorrect in any material respect as
of the time when the same shall have been made (excluding, however, any
representation or warranty set forth in Section 2.5(a)), and the incorrectness
of such representation, warranty or statement has a material adverse effect on
the Trust and, within 30 days after written notice thereof shall have been given
to the Servicer or the Seller by the Owner Trustee, the Indenture Trustee or a
Certificateholder or Noteholder, the circumstances or condition in respect of
which such representation, warranty or statement was incorrect shall not have
been eliminated or otherwise cured; or
Section 8.2. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur and be continuing, either the Indenture
Trustee, the Owner Trustee, a Certificate Majority or a Note Majority, by notice
given in writing to the Servicer (and to the Indenture Trustee and the Owner
Trustee if given by the Noteholders or the Certificateholders) may terminate all
of the rights and obligations of the Servicer under this Agreement. On or after
the receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Certificates, the Notes or the Trust Property or otherwise,
shall be terminated and automatically shall pass to, be vested in and become
obligations and responsibilities of the Backup Servicer (or such other successor
Servicer appointed pursuant to Section 8.3(b)); provided, however, that the
successor Servicer shall have no liability with respect to any obligation which
was required to be performed by the terminated Servicer prior to the date that
the successor Servicer becomes the Servicer or any claim of a third party based
on any alleged action or inaction of the terminated Servicer. The successor
Servicer is authorized and empowered by this Agreement to execute and deliver,
on behalf of the terminated Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Contracts
and the other Trust Property and related documents to show the Owner Trustee as
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lienholder or secured party on the related Lien Certificates, or otherwise. The
terminated Servicer agrees to cooperate with the successor Servicer in effecting
the termination of the responsibilities and rights of the terminated Servicer
under this Agreement, including, without limitation, the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the terminated Servicer for deposit, or have been deposited
by the terminated Servicer, in the Collection Account or thereafter received
with respect to the Contracts and the delivery to the successor Servicer of all
Contract Files, Monthly Records and Collection Records and a computer tape in
readable form as of the most recent Business Day containing all information
necessary to enable the successor Servicer or a successor Servicer to service
the Contracts and the other Trust Property. In addition to any other amounts
that are then payable to the terminated Servicer under this Agreement, the
terminated Servicer shall then be entitled to receive out of Available Funds
reimbursements for any Outstanding Monthly Advances (in accordance with Section
4.4(c)) made during the period prior to the notice pursuant to this Section 8.2
which terminates the obligation and rights of the terminated Servicer under this
Agreement. The Owner Trustee, the Indenture Trustee and the successor Servicer
may set off and deduct any amounts owed by the terminated Servicer from any
amounts payable to the terminated Servicer pursuant to the preceding sentence.
The terminated Servicer shall grant the Owner Trustee, the Indenture Trustee and
the successor Servicer reasonable access to the terminated Servicer's premises
at the terminated Servicer's expense.
Section 8.3. Appointment of Successor.
(a) On and after (i) the time the Servicer receives a notice of
termination pursuant to Section 8.2 or (ii) the resignation of the Servicer
pursuant to Section 7.5, the Backup Servicer shall be the successor in all
respects to the Servicer in its capacity as servicer under this Agreement and
the transactions set forth or provided for in this Agreement, and shall be
subject to all the responsibilities, restrictions, duties, liabilities and
termination provisions relating thereto placed on the Servicer by the terms and
provisions of this Agreement. The Owner Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. If a successor Servicer is acting as Servicer hereunder,
it shall be subject to termination under Section 8.2 upon the occurrence of any
Servicer Termination Event applicable to it as Servicer and shall serve until
such time as it has resigned, as authorized by Section 7.5, or been terminated
pursuant to Section 8.2, and in either case a successor Servicer has been
appointed pursuant to Section 8.3.
(b) If the Backup Servicer shall be legally unable or unwilling to act
as Servicer, the Backup Servicer, the Indenture Trustee, a Note Majority, the
Owner Trustee or a Certificate Majority may petition a court of competent
jurisdiction to appoint any Eligible Servicer as the successor to the Servicer.
Pending appointment pursuant to the preceding sentence, the Backup Servicer
shall act as successor Servicer unless it is legally unable to do so, in which
event the outgoing Servicer
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shall continue to act as Servicer until a successor has been appointed and
accepted such appointment. Subject to Section 7.5, no provision of this
Agreement shall be construed as relieving the Backup Servicer of its obligation
to succeed as successor Servicer upon the termination of the Servicer pursuant
to Section 8.2 or the resignation of the Servicer pursuant to Section 7.5.
(c) Any successor Servicer shall be entitled to such compensation
(whether payable out of the Collection Account or otherwise) as the Servicer
would have been entitled to under the Agreement if the Servicer had not resigned
or been terminated hereunder. If any successor Servicer is appointed as a
result of the Backup Servicer's refusal (in contravention of the terms of this
Agreement) to act as Servicer although it is legally able to do so, such
successor Servicer may agree on reasonable additional compensation to be paid to
such successor Servicer by the Backup Servicer, which additional compensation
shall be paid by the Backup Servicer in its individual capacity and solely out
of its own funds. If the Backup Servicer is the successor Servicer, the Backup
Servicer shall be entitled to reimbursement, pursuant to Section 4.6(ii), of
reasonable transition expenses, not in excess of $50,000, incurred in acting as
successor Servicer.
Section 8.4. Notification to Certificateholders and Noteholders.
Upon any termination of, or appointment of a successor to, the Servicer pursuant
to this Article VIII, the Owner Trustee shall give prompt written notice thereof
to Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency, and the Indenture Trustee shall give prompt
written notice thereof to Noteholders at their respective addresses appearing in
the Note Register.
Section 8.5. Waiver of Past Defaults. A Note Majority or
Certificate Majority may, on behalf of all Holders of Notes and Certificates,
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Servicer Termination Event arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
ARTICLE IX
TERMINATION
Section 9.1. Optional Purchase of All Contracts; Liquidation of Trust
Estate.
(a) On each Determination Date with respect to a Distribution Date
following the Distribution Date on which the Notional Balance is reduced to
zero, as of which the Aggregate Principal Balance is less than 10% of the
Original Pool
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Balance, the Servicer and the Seller each shall have the option to purchase the
corpus of the Trust; provided, however, that the amount to be paid for such
purchase (as set forth in the following sentence) shall be sufficient to pay the
full amount of principal, premium, if any, and interest then due and payable on
the Notes. To exercise such option, the Servicer or the Seller, as the case may
be, shall pay the aggregate Purchase Amounts for the Contracts, plus the
appraised value of any other property (including the right to receive any future
recoveries) held as part of the Trust, such appraisal to be conducted by an
appraiser mutually agreed upon by the Servicer or the Seller, as the case may
be, and the Indenture Trustee, and shall succeed to all interests in and to the
Trust Property. The fees and expenses related to such appraisal shall be paid by
the party exercising the option to purchase. The party exercising such option to
repurchase shall deposit the aggregate Purchase Amounts for the Contracts and
the amount of the appraised value of any other property held as part of the
Trust into the Collection Account, and the Indenture Trustee shall distribute
the amounts so deposited in accordance with Section 4.6.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.2
of the Trust Agreement, the Owner Trustee shall instruct the Indenture Trustee
to deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Distribution
Date, on the Distribution Date immediately following such deposit), the Owner
Trustee shall instruct the Indenture Trustee to make the following deposits
(after the application on such Distribution Date of the Available Funds) from
the Insolvency Proceeds:
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into the
Note Distribution Account on such Distribution Date (or, if the Insolvency
Proceeds are insufficient to pay all such amounts in full, pro rata to each
class of Notes in accordance with the amounts payable to each such class);
(ii) to the Note Distribution Account, the Class A-1 Prepayment
Premium, Class A-2 Prepayment Premium, Class A-3 Prepayment Premium,
Class A-4 Prepayment Premium, Class A-5 Prepayment Premium and Class A-6
Prepayment Premium (or, if the Insolvency Proceeds received by the Trust
are insufficient to pay all such amounts in full, pro rata to each class of
Notes in accordance with the amounts payable to each such class);
(iii) to the Note Distribution Account, the outstanding
principal balance of the Notes (after giving effect to the reduction in the
outstanding principal balance of the Notes to result from the deposits
otherwise made in the Note Distribution Account on such Distribution Date);
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(iv) to the Certificate Distribution Account, any portion of the
Class B Interest Distributable Amount and Class B Prepayment Premium not
otherwise deposited into the Certificate Distribution Account on such
Distribution Date; and
(v) to the Certificate Distribution Account, the Class B
Certificate Balance (after giving effect to the reduction in the Class B
Certificate Balance to result from the deposits otherwise made in the
Certificate Distribution Account on such Distribution Date).
(c) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable
after the Servicer has received notice thereof.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1. Amendment.
(a) This Agreement may be amended by the Seller, the Servicer and the
Trust, with the prior written consent of the Indenture Trustee but without the
consent of any of the Noteholders or Certificateholders, (i) to cure any
ambiguity, (ii) to correct or supplement any provisions in this Agreement or
(iii) for the purpose of adding any provision to or changing in any manner or
eliminating any provision of this Agreement or of modifying in any manner the
rights of the Noteholders or the Certificateholders; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of the Noteholders or Certificateholders.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Trust with the prior written consent of the
Indenture Trustee and with the consent of a Certificate Majority and a Note
Majority (which consent of any Holder of a Certificate or Note given pursuant to
this Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such
Certificate or Note and of any Certificate or Note issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate or Note) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Holders of
Certificates or Notes; provided, however, that, subject to the provisions of
Section 5.04 of the Indenture, no such amendment shall (a) increase or reduce in
any manner the amount of, or accelerate or delay the timing of, collections of
payments on Contracts or distributions required to be made on any Certificate or
Note or the Class B Pass-Through Rate, Class A-1 Interest Rate,
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Class A-2 Interest Rate, Class A-3 Interest Rate, Class A-4 Interest Rate,
Class A-5 Interest Rate or Class A-6 Interest Rate, (b) amend any provisions
of Section 4.6 in such a manner as to affect the priority of payment of
interest, principal or premium to Noteholders or Certificateholders, or (c)
reduce the aforesaid percentage required to consent to any such amendment or any
waiver hereunder, without the consent of the Holders of all Certificates or
Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee.
(e) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to Section 10.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders and Noteholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Certificateholders or Noteholders shall be subject to such reasonable
requirements as the Owner Trustee or Indenture Trustee, as applicable, may
prescribe, including the establishment of record dates.
(f) Prior to the execution of any amendment to this Agreement, the
Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement, in addition to the Opinion of Counsel referred to in Section 10.2(i).
The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's own rights, duties or immunities
under this Agreement or otherwise.
Section 10.2. Protection of Title to Trust Property.
(a) The Servicer shall execute and file such financing statements and
cause to be executed and filed such continuation and other statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Trust, the Owner Trustee and the
Indenture Trustee in the Trust Property and in the proceeds thereof. The
Servicer shall deliver (or cause to be delivered) to the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither the Seller, the Servicer nor the Trust shall change its
name, identity or corporate structure in any manner that would, could or might
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make any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least 60 days' prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Seller, the Servicer and the Trust shall give the
Owner Trustee and the Indenture Trustee at least 60 days' prior written notice
of any relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement. The Servicer shall at all times maintain each office
from which it services Contracts and its principal executive office within the
United States of America.
(d) The Servicer shall maintain accounts and records as to each
Contract accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Contract, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Contract and the amounts
from time to time deposited in the Collection Account in respect of such
Contract.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Contracts to the Trust, the
Servicer's master computer records (including any backup archives) that refer to
any Contract indicate clearly (with reference to the particular trust) that the
Contract is owned by the Trust. Indication of the Trust's ownership of a
Contract shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Contract has been paid in full or repurchased by the
Seller or Servicer.
(f) If at any time the Seller or the Servicer proposes to sell, grant
a security interest in, or otherwise transfer any interest in contracts to any
prospective purchaser, lender or other transferee, the Servicer shall give to
such prospective purchaser, lender or other transferee computer tapes, records
or print-outs (including any restored from backup archives) that, if they refer
in any manner whatsoever to any Contract, indicate clearly that such Contract
has been sold and is owned by the Trust unless such Contract has been paid in
full or repurchased by the Seller or Servicer.
(g) The Servicer shall permit the Owner Trustee, the Indenture
Trustee, the Backup Servicer and their respective agents, at any time to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding any Contracts or any other portion of the Trust Property.
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(h) The Servicer shall furnish to the Owner Trustee, the Indenture
Trustee and the Backup Servicer at any time upon request a list of all Contracts
then held as part of the Trust, together with a reconciliation of such list to
the Schedule of Contracts and to each of the Servicer's Certificates furnished
before such request indicating removal of Contracts from the Trust. Upon
request, the Servicer shall furnish a copy of any list to the Seller. The Owner
Trustee shall hold any such list and Schedule of Contracts for examination by
interested parties during normal business hours at the Corporate Trust Office
upon reasonable notice by such Persons of their desire to conduct an
examination.
(i) The Seller and the Servicer shall deliver to the Owner Trustee and
the Indenture Trustee simultaneously with the execution and delivery of this
Agreement and of each amendment thereto and upon the occurrence of the events
giving rise to an obligation to give notice pursuant to Section 10.2(b) or (c),
an Opinion of Counsel either (a) stating that, in the opinion of such Counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee in the Contracts and the other Trust Property,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (b) stating that, in the opinion of
such counsel, no such action is necessary to preserve and protect such interest.
(j) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, within 90 days after the beginning of each calendar year beginning with
the first calendar year beginning more than three months after the Closing Date,
an Opinion of Counsel, either (a) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the Trust
and the Indenture Trustee in the Contracts, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (b) stating that, in the opinion of such counsel, no action shall be
necessary to preserve and protect such interest.
Section 10.3. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Minnesota without
regard to the principles of conflicts of laws thereof and the obligations,
rights and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
Section 10.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the Notes or the respective rights of the Holders thereof.
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Section 10.5. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer and the Backup Servicer), this Agreement may not be assigned by
the Seller or the Servicer without the prior written consent of the Owner
Trustee, the Indenture Trustee, a Note Majority and a Certificate Majority.
Section 10.6. Third-Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
Section 10.7. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
Section 10.8. Intention of Parties.
(a) The execution and delivery of this Agreement shall constitute an
acknowledgement by the Seller, that it is intended that the assignment and
transfer herein contemplated constitute a sale and assignment outright, and not
for security, of the Contracts and the other Trust Property, conveying good
title thereto free and clear of any Liens, from the Seller to the Trust, and
that the Contracts and the other Trust Property shall not be a part of the
Seller's estate in the event of the insolvency, receivership, conservatorship or
the occurrence of another similar event, of, or with respect to, the Seller. In
the event that such conveyance is determined to be made as security for a loan
made by the Trust or the Certificateholders to the Seller, the Seller intends
that it shall have granted to the Owner Trustee a first priority security
interest in all of the Seller's right, title and interest in and to the Trust
Property conveyed to the Trust pursuant to Sections 2.1 and 2.4 of this
Agreement, and that this Agreement shall constitute a security agreement under
applicable law.
(b) The execution and delivery of this Agreement shall constitute an
acknowledgement by the Seller and the Owner Trustee on behalf of the
Certificateholders that they intend to establish (for Federal tax purposes) a
trust taxable as a partnership, rather than an association taxable as a
corporation. The powers granted and obligations undertaken in this Agreement
shall be construed so as to further such intent.
Section 10.9. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified
-72-
<PAGE>
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Seller or the Servicer, at the following address:
Green Tree Financial Corporation, 1100 Landmark Towers, 345 St. Peter Street,
St. Paul, Minnesota 55102-1639, Attention: Chief Financial Officer, (b) in the
case of the Owner Trustee, at the Corporate Trust Office, (c) in the case of the
Indenture Trustee and, for so long as the Indenture Trustee is the Backup
Servicer, _______________________________, Attention: Corporate Trust
Department, and (d) in the case of each Rating Agency, 99 Church Street, New
York, New York 10007 (for Moody's) and 26 Broadway, New York, New York 10004
(for Standard & Poor's), Attention: Asset-Backed Surveillance, or at such other
address as shall be designated by any such party in a written notice to the
other parties. Any notice required or permitted to be mailed to a
Certificateholder or a Noteholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register or
the Note Register (as the case may be), and any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder or the Noteholder receives such
notice.
Section 10.10. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by ___________________________, not individually or personally but
solely as Owner Trustee of the Trust under the Trust Agreement, in the exercise
of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by ___________________________ but is made and intended for the
purpose for binding only the Trust, (c) nothing herein contained shall be
construed as creating any liability on ___________________________, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties to
this Agreement and by any person claiming by, through or under them and (d)
under no circumstances shall ___________________________ be personally liable
for the payment of any indebtedness or expenses of the Trust or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Trust under this Agreement or any related documents.
-73-
<PAGE>
IN WITNESS WHEREOF, the Issuer, the Seller, the Servicer and the
Backup Servicer have caused this Sale and Servicing Agreement to be duly
executed by their respective officers as of the day and year first above
written.
ISSUER:
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
by________________________________________________
Not in its individual capacity but solely
as Owner Trustee
By________________________________________________
Name: _________________________________________
Title: _________________________________________
SELLER AND SERVICER:
GREEN TREE FINANCIAL CORPORATION
By________________________________________________
Name: __________________________________________
Title:__________________________________________
BACKUP SERVICER:
__________________________________________________
By________________________________________________
Name: _________________________________________
Title: _________________________________________
Acknowledged and Accepted:
____________________________________,
not in its individual capacity but as
Indenture Trustee,
By___________________________________
Name:___________________________
Title:__________________________
-74-
<PAGE>
SCHEDULE A
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
1. Characteristics of Contracts. Each Contract (A) was originated by a
Dealer for the retail sale of a Financed Product in the ordinary course of such
Dealer's business and such Dealer had all necessary licenses and permits to
originate Contracts in the state where such Dealer was located, was fully and
properly executed by the parties thereto, was purchased by the Seller from such
Dealer under an existing Dealer Agreement with the Seller and was validly
assigned by such Dealer to the Seller, (B) contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for realization against the collateral security, and (C) is fully
amortizing and provides for level monthly payments (provided that the payment in
the first Monthly Period and the final Monthly Period of the life of the
Contract may be minimally different from the level payment) which, if made when
due, shall fully amortize the Amount Financed over the original term.
2. No Fraud or Misrepresentation. Each Contract was originated by a
Dealer and was sold by the Dealer to the Seller without any fraud or
misrepresentation on the part of such Dealer in either case.
3. Compliance with Law. All requirements of applicable federal, state
and local laws, and regulations thereunder (including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors'
Civil Relief Act of 1940, the Minnesota Motor Product Retail Installment Sales
Act, and state adaptations of the National Consumer Act and of the Uniform
Consumer Credit Code and other consumer credit laws and equal credit opportunity
and disclosure laws) in respect of all of the Contracts and each and every sale
of Financed Products, have been complied with in all material respects, and each
Contract and the sale of the Financed Product evidenced by each Contract
complied at the time it was originated or made and now complies in all material
respects with all applicable legal requirements.
4. Origination. Each Contract was originated in the United States.
5. Binding Obligation. Each Contract represents the genuine, legal,
valid and binding payment obligation of the Obligor thereon, enforceable by the
holder thereof in accordance with its terms, except (A) as enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law and (B) as such Contract may be
modified by the application after the
<PAGE>
Initial Cutoff Date or any Subsequent Cutoff Date, as the case may be, of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended; and all parties to
each Contract had full legal capacity to execute and deliver such Contract and
all other documents related thereto and to grant the security interest purported
to be granted thereby.
6. No Government Obligor. No Obligor is the United States of America or
any State or any agency, department, subdivision or instrumentality thereof.
7. Obligor Bankruptcy. At the Initial Cutoff Date or each Subsequent
Cutoff Date, as applicable, no Obligor had been identified on the records of the
Seller as being the subject of a current bankruptcy proceeding.
8. Schedule of Contracts. The information set forth in the Schedule of
Contracts has been produced from the Electronic Ledger and was true and correct
in all material respects as of the close of business on the Initial Cutoff Date
or each Subsequent Cutoff Date, as applicable.
9. Marking Records. By the Closing Date or by each Subsequent Transfer
Date, the Seller will have caused the portions of the Electronic Ledger relating
to the Contracts to be clearly and unambiguously marked to show that the
Contracts constitute part of the Trust Property and are owned by the Trust in
accordance with the terms of the Agreement.
10. Computer Tape. The Computer Tape made available by the Seller to the
Owner Trustee on the Closing Date or on each Subsequent Transfer Date was
complete and accurate as of the Initial Cutoff Date or Subsequent Cutoff Date,
as applicable, and includes a description of the same Contracts that are
described in the Schedule of Contracts.
11. Adverse Selection. No selection procedures adverse to the Noteholders
or the Certificateholders were utilized in selecting the Contracts from those
Contracts owned by the Seller which met the selection criteria contained in the
Sale and Servicing Agreement.
12. Chattel Paper. The Contracts constitute chattel paper within the
meaning of the UCC as in effect in the State of Minnesota.
13. One Original. There is only one original executed copy of each
Contract (other than a copy in the possession of the relevant Obligor).
14. Contract Files Complete. There exists a Contract File pertaining to
each Contract and such Contract File contains (a) a fully executed original of
the Contract, (b) a certificate of insurance, application form for insurance
signed by the Obligor, or a signed representation letter from the Obligor named
in the Contract pursuant to which the Obligor has agreed to obtain physical
damage insurance for the related Financed Product, or copies thereof, (c) the
original Lien Certificate or application
-2-
<PAGE>
therefor and (d) a credit application signed by the Obligor, or a copy thereof.
Each of such documents which is required to be signed by the Obligor has been
signed by the Obligor in the appropriate spaces. All blanks on any form have
been properly filled in and each form has otherwise been correctly prepared.
The complete Contract File for each Contract currently is in the possession of
the Custodian.
15. Contracts in Force. No Contract has been satisfied, subordinated or
rescinded, and the Financed Product securing each such Contract has not been
released from the lien of the related Contract in whole or in part. No
provisions of any Contract have been waived, altered or modified in any respect
since its origination, except by instruments or documents identified in the
Contract File. No Contract has been modified as a result of application of the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
16. Lawful Assignment. No Contract was originated in, or is subject to
the laws of, any jurisdiction the laws of which would make unlawful, void or
voidable the sale, transfer and assignment of such Contract under this Agreement
or pursuant to transfers of the Notes or the Certificates.
17. Good Title. No Contract has been sold, transferred, assigned or
pledged by the Seller to any Person other than the Trust; immediately prior to
the conveyance of the Contracts to the Trust pursuant to this Agreement or any
Subsequent Purchase Agreement, as applicable, the Seller was the sole owner
thereof and had good and indefeasible title thereto, free of any Lien and, upon
execution and delivery of this Agreement or any Subsequent Purchase Agreement,
as applicable, by the Seller, the Trust shall have good and indefeasible title
to and will be the sole owner of such Contracts, free of any Lien. No Dealer
has a participation in, or other right to receive, proceeds of any Contract.
The Seller has not taken any action to convey any right to any Person that would
result in such Person having a right to payments received under the related
Insurance Policies or the related Dealer Agreements or Dealer Assignments or to
payments due under such Contracts.
18. Security Interest in Financed Product. Each Contract created or shall
create a valid, binding and enforceable first priority security interest in
favor of the Seller in the Financed Product. The Lien Certificate and original
certificate of title for each Financed Product show, or if a new or replacement
Lien Certificate or other Evidence of Perfection is being applied for with
respect to such Financed Product the Lien Certificate or other Evidence of
Perfection will be received within 180 days of the Closing Date or any
Subsequent Transfer Date, as applicable, and will show, the Seller named as the
original secured party under each Contract and as the holder of a first priority
security interest in such Financed Product. With respect to each Contract for
which the Lien Certificate or other Evidence of Perfection has not yet been
returned from the Registrar of Titles or other Evidence of Perfection, the
Seller has received written evidence from the related Dealer that such Lien
Certificate or other Evidence of Perfection showing the Seller as first
lienholder has been applied
-3-
<PAGE>
for. The Seller's security interest has been validly assigned by the Seller to
the Owner Trustee pursuant to this Agreement or any Subsequent Transfer
Agreement, as applicable. Immediately after the sale, transfer and assignment
thereof to the Trust, each Contract will be secured by an enforceable and
perfected first priority security interest in the Financed Product in favor of
the Trust as secured party, which security interest is prior to all other liens
upon and security interests in such Financed Product which now exist or may
hereafter arise or be created (except, as to priority, for any lien for taxes,
labor or materials affecting a Financed Product). As of the Initial Cutoff Date
or each Subsequent Cutoff Date, as applicable, there were no Liens or claims for
taxes, work, labor or materials affecting a Financed Product which are or may be
Liens prior or equal to the lien of the related Contract.
19. All Filings Made. All filings (including, without limitation, UCC
filings) required to be made by any Person and actions required to be taken or
performed by any Person in any jurisdiction to give the Trust a first priority
perfected lien on, or ownership interest in, the Contracts and the proceeds
thereof and the other Trust Property have been made, taken or performed.
20. No Impairment. The Seller has not done anything to convey any right
to any Person that would result in such Person having a right to payments due
under the Contract or otherwise to impair the rights of the Trust, the Indenture
Trustee, the Noteholders and the Certificateholders in any Contract or the
proceeds thereof.
21. Contract Not Assumable. No Contract is assumable by another Person in
a manner which would release the Obligor thereof from such Obligor's obligations
to the Seller with respect to such Contract.
22. No Defenses. No Contract is subject to any right of rescission,
setoff, counterclaim or defense and no such right has been asserted or
threatened with respect to any Contract.
23. No Default. There has been no default, breach, violation or event
permitting acceleration under the terms of any Contract (other than payment
delinquencies of not more than 30 days), and no condition exists or event has
occurred and is continuing that with notice, the lapse of time or both would
constitute a default, breach, violation or event permitting acceleration under
the terms of any Contract, and there has been no waiver of any of the foregoing.
As of the Initial Cutoff Date or any Subsequent Cutoff Date, as applicable, no
Financed Product had been repossessed.
24. Insurance. As of the Closing Date or as of any Subsequent Transfer
Date, as applicable, each Financed Product is covered by a comprehensive and
collision insurance policy (i) in an amount at least equal to the lesser of (a)
its maximum insurable value or (b) the principal amount due from the Obligor
under the related Contract, (ii) naming the Seller as loss payee and (iii)
insuring against
-4-
<PAGE>
loss and damage due to fire, theft, transportation, collision and other risks
generally covered by comprehensive and collision coverage. Each Contract
requires the Obligor to maintain physical loss and damage insurance, naming the
Seller and its successors and assigns as additional insured parties, and each
Contract permits the holder thereof to obtain physical loss and damage insurance
at the expense of the Obligor if the Obligor fails to do so. No Financed
Product was or had previously been insured under a policy of Force-Placed
Insurance on the Cutoff Date.
25. Past Due. At Initial Cutoff Date or any Subsequent Cutoff Date, as
applicable, no Contract was more than 30 days past due.
26. Remaining Principal Balance. At the Initial Cutoff Date or any
Subsequent Cutoff Date, as applicable, each Contract had a remaining principal
balance equal to or greater than $500.00, and the Principal Balance of each
Contract set forth in the Schedule of Contracts is true and accurate in all
material respects.
27. Final Scheduled Maturity Date. No Contract has a final scheduled
maturity later than _________, 199_.
28. Certain Characteristics. (A) Each Initial Contract had a remaining
maturity, as of the Initial Cutoff Date, of at least ____ months but not more
than ____ months; (B) each Initial Contract had an original maturity of at least
____ months but not more than ____ months; (C) each Initial Contract had an
original principal balance of at least $ ____ and not more than $ ____; (D) each
Initial Contract had a remaining Principal Balance as of the Initial Cutoff Date
of at least $ ____ and not more than $ ____; (E) each Initial Contract has an
Annual Percentage Rate of at least ____ % and not more than ____ %; (F) no
Initial Contract was more than 30 days past due as of the Initial Cutoff Date;
(G) no funds have been advanced by the Seller, the Servicer, any Dealer, or
anyone acting on behalf of any of them in order to cause any Contract to qualify
under clause (F) above, (H) no Initial Contract has a final scheduled payment
date on or before ______________, 199_, (I) the Principal Balance of each
Contract set forth in Schedule of Contracts is true and accurate in all material
respects as of the Initial Cutoff Date, (J) ____ % of the Initial Contracts, by
principal balance as of the Initial Cutoff Date, was attributable to loans for
the purchase of new Financed Products and ____ % of the Initial Contracts was
attributable to loans for the purchase of used Financed Products, and (K) not
more than ____ % of the Principal Balance of the Initial Contracts as of the
Initial Cutoff Date had an Annual Percentage Rate in excess of ____ %.
-5-
<PAGE>
SCHEDULE B
SERVICING POLICIES AND PROCEDURES
---------------------------------
<PAGE>
EXHIBIT A
SCHEDULE OF INITIAL CONTRACTS
-----------------------------
A-1
<PAGE>
EXHIBIT B-1
FORM OF CUSTODIAN AGREEMENT (GREEN TREE)
----------------------------------------
B-1-1
<PAGE>
EXHIBIT B-2
FORM OF CUSTODIAN AGREEMENT (OTHER)
-----------------------------------
B-2-1
<PAGE>
EXHIBIT C
FORM OF SERVICER'S CERTIFICATE
------------------------------
C-1
<PAGE>
EXHIBIT D
FORM OF SUBSEQUENT TRANSFER AGREEMENT
-------------------------------------
SUBSEQUENT TRANSFER AGREEMENT, dated as of __________, 199__, among GREEN
TREE ASSET RECEIVABLES TRUST, 199_-_, a Delaware business trust (the "Trust"),
GREEN TREE FINANCIAL CORPORATION, a Delaware corporation (the "Seller"), and as
Servicer (the "Servicer"), pursuant to the Sale and Servicing Agreement referred
to below.
W I T N E S S E T H:
WHEREAS, the Trust, the Seller and the Servicer are parties to the Sale and
Servicing Agreement, dated as of ___________, 199_ (as amended or supplemented,
the "Sale and Servicing Agreement");
WHEREAS, pursuant to the Sale and Servicing Agreement, the Seller wishes to
convey the Subsequent Contracts to the Trust; and
WHEREAS, the Trust is willing to accept such conveyance subject to the
terms and conditions hereof.
NOW, THEREFORE, the Trust, the Seller and the Servicer hereby agree as
follows:
1. Defined Terms. Capitalized terms used herein shall have the meanings
ascribed to them in the Sale and Servicing Agreement unless otherwise defined
herein.
"Subsequent Cutoff Date" shall mean, with respect to the Subsequent
Contracts conveyed hereby, __________, 199__.
"Subsequent Contracts" shall mean, for purposes of this Agreement, the
Contracts listed in the Schedule of Subsequent Contracts attached hereto as
Exhibit A.
"Subsequent Transfer Date" shall mean, with respect to the Subsequent
Contracts conveyed hereby, __________, 199__.
2. Schedule of Subsequent Contracts. The Schedule of Subsequent
Contracts attached hereto as Exhibit A is a supplement to the Schedule of
Initial Contracts attached as Exhibit A to the Sale and Servicing Agreement.
The Contracts
D-1
<PAGE>
listed in the Schedule of Subsequent Contracts constitute the Subsequent
Contracts to be conveyed pursuant to this Agreement on the Subsequent Transfer
Date.
3. Conveyance of Subsequent Contracts. (a) In consideration of the
Trust's delivery to or upon the order of the Seller of the amount of funds
determined in paragraph (b) below, the Seller does hereby sell, transfer,
assign, and otherwise convey to the Trust, without recourse (but without
limitation of its obligations in this Agreement or the Sale and Servicing
Agreement), all of the right, title and interest of the Seller in and to the
Subsequent Contracts, all monies at any time paid or payable thereon or in
respect thereof after the related Subsequent Cutoff Date (including amounts due
on or before the related Subsequent Cutoff Date but received by the Seller after
the related Subsequent Cutoff Date), an assignment of security interests of the
Seller in the related Financed Products, the Insurance Policies and any proceeds
from any Insurance Policies relating to the Subsequent Contracts, the Obligors
or the related Financed Products, including rebates of premiums, all VSI
Insurance and any Force-Placed Insurance relating to the Subsequent Contracts,
an assignment of the rights of the Seller against Dealers with respect to the
Subsequent Contracts under the Dealer Agreements and the Dealer Assignments, all
items contained in the Contract Files relating to the Subsequent Contracts, any
and all other documents that the Seller keeps on file in accordance with its
customary procedures relating to the Subsequent Contracts, the Obligors or the
related Financed Products, any property (including the right to receive future
Liquidation Proceeds) that secures a Subsequent Contract and that has been
acquired by or on behalf of the Trust pursuant to liquidation of such Subsequent
Contract, and all proceeds of the foregoing.
(b) (i) Principal Balance of Subsequent Contracts: $________
(ii) Amount to be deposited in the Reserve Account: $________
(iii) Class A--1 Holdback Amount: $________
(iv) Proceeds to Seller ((i) - (ii) - (iii): $________
4. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Trust as of the date of this Agreement and as of
the Subsequent Transfer Date that:
(a) Legal, Valid and Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a suit at
law or equity).
D-2
<PAGE>
(b) Organization and Good Standing. The Seller is duly organized and
validly existing as a corporation in good standing under the laws of the
State of Delaware, with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and has,
the power, authority and legal right to acquire and own the Contracts.
(c) Due Qualification. The Seller is duly qualified to do business as
a foreign corporation in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
of property or the conduct of its business shall require such
qualifications.
(d) Power and Authority. The Seller has the power and authority to
execute and deliver this Agreement and to carry out its terms; the Seller
has full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust; and the execution, delivery and
performance of this Agreement has been duly authorized by the Seller by all
necessary corporate action.
(e) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Seller enforceable in accordance with its terms.
(f) No Violation. The consummation of the transactions contemplated
by this Agreement, and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Seller, or any indenture,
agreement or other instrument to which the Seller is a party or by which it
may be bound, nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Related Documents), nor
violate any law or, to the best of the Seller's knowledge, any order, rule
or regulation applicable to the Seller of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(g) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of this Agreement, the Indenture or any of the
other Related Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the consummation
of any of the transactions contemplated by this Agreement, the Indenture or
any of the other Related Documents, (iii) seeking any determination or
ruling that
D-3
<PAGE>
might materially and adversely affect the performance by the Seller of its
obligations under, or the validity or enforceability of, this Agreement,
the Indenture, any of the other Related Documents, the Notes or the
Certificates or (iv) which might adversely affect the Federal or state
income tax attributes of the Notes or the Certificates.
(h) Principal Balance. The aggregate Principal Balance of the
Contracts listed on the Schedule of Subsequent Contracts and conveyed to
the Trust pursuant to this Agreement as of the Subsequent Cutoff Date is
$______________.
5. Conditions Precedent. The obligation of the Trust to acquire the
Contracts hereunder is subject to the satisfaction, on or prior to the
Subsequent Transfer Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section
2.5 of the Sale and Servicing Agreement shall be true and correct as of the
date of this Agreement and as of the Subsequent Transfer Date.
(b) Sale and Servicing Agreement Conditions. Each of the conditions
set forth in Section 2.4 of the Sale and Servicing Agreement shall have
been satisfied.
(c) Additional Information. The Seller shall have delivered to the
Trust such information as was reasonably requested by the Trust to satisfy
itself as to (i) the accuracy of the representations and warranties set
forth in Section 4 of this Agreement and in Section 2.5 of the Sale and
Servicing Agreement and (ii) the satisfaction of the conditions set forth
in this Section 5 and Section 2.4 of the Sale and Servicing Agreement.
6. Ratification of Agreement. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
7. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
8. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
D-4
<PAGE>
IN WITNESS WHEREOF, the Trust, the Seller and the Servicer have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
GREEN TREE ASSET RECEIVABLES
TRUST, 199_-_
By____________________________________________,
not in its individual capacity but solely
as Owner Trustee on behalf of the
Trust,
By____________________________________________
Name:______________________________________
Title:_____________________________________
GREEN TREE FINANCIAL CORPORATION
Seller
By____________________________________________
Name:______________________________________
Title:_____________________________________
Acknowledged and Accepted:
________________________________________,
not in its individual capacity but
solely as Indenture Trustee,
By______________________________________
Name:________________________________
Title________________________________
D-5
<PAGE>
EXHIBIT 4.3
TRUST AGREEMENT
Dated as of ___________, 199_
among
GREEN TREE FINANCIAL CORPORATION,
GREEN TREE FIRST GP INC.,
GREEN TREE SECOND GP INC.
and
--------------------------------
Owner Trustee
GREEN TREE ASSET CONTRACTS TRUST, 199_-_
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE II DEFINITIONS.................................................. 1
SECTION 1.1. Definitions.............................................. 1
SECTION 1.2. Usage of Terms........................................... 5
SECTION 1.3. Calculations............................................. 5
SECTION 1.4. Section References....................................... 5
SECTION 1.5. Action by or Consent of Certificateholders............... 5
ARTICLE II CREATION OF TRUST............................................ 6
SECTION 2.1. Creation of Trust........................................ 6
SECTION 2.2. Office................................................... 6
SECTION 2.3. Purposes and Powers...................................... 6
SECTION 2.4. Appointment of Owner Trustee............................. 7
SECTION 2.5. Initial Capital Contribution of Trust Estate............. 7
SECTION 2.6. Declaration of Trust..................................... 7
SECTION 2.7. Liability of the Owners.................................. 8
SECTION 2.8. Title to Trust Property.................................. 8
SECTION 2.9. Situs of Trust........................................... 9
SECTION 2.10. Representations and Warranties of the Depositor,
GGP I and GGP II......................................... 9
SECTION 2.11. Federal Income Tax Allocations........................... 10
SECTION 2.12. Covenants of the General Partners........................ 11
SECTION 2.13. Covenants of the Certificate Owners...................... 12
ARTICLE III THE CERTIFICATES............................................. 13
SECTION 3.1. Initial Ownership........................................ 13
SECTION 3.2. The Certificates......................................... 13
SECTION 3.3. Authentication of Certificates........................... 14
SECTION 3.4. Registration of Transfer and Exchange of Certificates.... 14
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates........ 17
SECTION 3.6. Persons Deemed Owners.................................... 17
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses................................................ 17
SECTION 3.8. Maintenance of Office or Agency.......................... 18
SECTION 3.9. Appointment of Paying Agent.............................. 18
ARTICLE IV ACTIONS BY OWNER TRUSTEE..................................... 19
SECTION 4.1. Restriction on Power of Certificate Owner................ 19
SECTION 4.2. Prior Notice to Certificateholders with Respect to
Certain Matters.......................................... 19
SECTION 4.3. Action by Certificate Owners with Respect to
Bankruptcy............................................... 19
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
SECTION 4.4. Restrictions on Certificate Owners' Power................ 20
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES................... 21
SECTION 5.1. Trust Accounts........................................... 21
SECTION 5.2. Application of Funds in Certificate Distribution
Account.................................................. 22
SECTION 5.3. Method of Payment........................................ 24
SECTION 5.4. No Segregation of Monies; No Interest.................... 24
SECTION 5.5. Accounting; Reports; Tax Returns......................... 24
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE........................ 25
SECTION 6.1. General Authority........................................ 25
SECTION 6.2. General Duties........................................... 25
SECTION 6.3. Action upon Instruction.................................. 26
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions............................................. 27
SECTION 6.5. No Action Except under Specified Documents or
Instructions............................................. 27
SECTION 6.6. Restrictions............................................. 27
SECTION 6.7. Administration Agreement................................. 28
ARTICLE VII CONCERNING THE OWNER TRUSTEE................................. 28
SECTION 7.1. Acceptance of Trust and Duties........................... 28
SECTION 7.2. Furnishing of Documents.................................. 30
SECTION 7.3. Representations and Warranties........................... 30
SECTION 7.4. Reliance; Advice of Counsel.............................. 31
SECTION 7.5. Not Acting in Individual Capacity........................ 31
SECTION 7.6. Owner Trustee Not Liable for Certificates, Notes or
Contracts................................................ 31
SECTION 7.7. Owner Trustee May Own Certificates and Notes............. 32
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE................................ 32
SECTION 8.1. Owner Trustee's Fees and Expenses........................ 32
SECTION 8.2. Indemnification.......................................... 32
SECTION 8.3. Non-recourse Obligations................................. 33
ARTICLE IX TERMINATION.................................................. 33
SECTION 9.1. Termination of the Trust................................. 33
SECTION 9.2. Dissolution Events with respect to General Partners...... 35
</TABLE>
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<TABLE>
<S> <C>
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES............................................... 36
SECTION 10.1. Eligibility Requirements for Owner Trustee............... 36
SECTION 10.2. Resignation or Removal of Owner Trustee.................. 36
SECTION 10.3. Successor Owner Trustee.................................. 37
SECTION 10.4. Merger or Consolidation of Owner Trustee................. 37
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee............ 38
ARTICLE XI MISCELLANEOUS PROVISIONS..................................... 39
SECTION 11.1. Amendment................................................ 39
SECTION 11.2. No Recourse.............................................. 40
SECTION 11.3. Governing Law............................................ 40
SECTION 11.4. Severability of Provisions............................... 41
SECTION 11.5. Certificates Nonassessable and Fully Paid................ 41
SECTION 11.6. Third-Party Beneficiaries................................ 41
SECTION 11.7. Counterparts............................................. 41
SECTION 11.8. Notices.................................................. 41
</TABLE>
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EXHIBITS
<TABLE>
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Exhibit A -- Form of Certificate of Trust
Exhibit B -- Form of Class B Certificate
Exhibit B-2 -- Form of Class B-GP Certificate
Exhibit C -- Form of Depository Agreement
</TABLE>
<PAGE>
THIS TRUST AGREEMENT, dated as of ______________, 199_, is made among Green
Tree Financial Corporation, a Delaware corporation (the "Seller"), Green Tree
First GP Inc., a Delaware corporation ("GGP I"), Green Tree Second GP Inc., a
Delaware corporation ("GGP II") and ___________________________, a
__________________________, as Owner Trustee (in such capacity, the "Owner
Trustee").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All terms defined in the Sale and
Servicing Agreement (defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following words
and phrases, unless otherwise specified, shall have the following meanings:
Administration Agreement: The Administration Agreement, dated as of
____________, 199_, between the Administrator and the Trust, as the same may be
amended and supplemented from time to time.
Administrator: ____________________, a ________________, or any
successor Administrator under the Administration Agreement.
Agreement or "this Agreement": This Trust Agreement, all amendments
and supplements thereto and all exhibits and schedules to any of the foregoing.
Authentication Agent: ____________________, or its successor in
interest, and any successor authentication agent appointed as provided in this
Agreement.
Benefit Plan: The meaning assigned in Section 3.4(j).
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code (S) 3801 et seq., as the same may be amended from time to time.
<PAGE>
Certificate: A Class B Certificate, a Class B-GP Certificate, a Class
I Certificate or a Class I-GP Certificate, as applicable.
Certificate Distribution Account: The account designated as the
Certificate Distribution Account in, and which is established and maintained
pursuant to, Section 5.1.
Certificate of Trust: The Certificate of Trust in the form of Exhibit
A hereto filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 3.4.
Certificateholder or Holder: A Person in whose name a Certificate is
registered in the Certificate Register.
Class B Certificateholder: A Person in whose name a Class B
Certificate is registered in the Certificate Register.
Class B Certificate: A certificate executed by the Owner Trustee
evidencing a fractional undivided interest in the Trust, substantially in the
form attached hereto as Exhibit B-1, and, unless the context otherwise requires,
the Class B-GP Certificates.
Class B-GP Certificateholder: A Person in whose name a Class B-GP
Certificate is registered in the Certificate Register.
Class B-GP Certificate: A certificate executed by the Owner Trustee
evidencing a fractional undivided interest in the Trust, substantially in the
form attached hereto as Exhibit B-2.
Code: The Internal Revenue Code of 1986, as amended.
Corporate Trust Office: The principal office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the Closing Date is located at ___________________________,
Attention: Corporate Trust Administration; the telecopy number for the
Corporate Trust Office on the date of the execution of this Agreement is
______________.
Demand Note: Each of the Demand Note, dated ______________, 199_,
issued by Green Tree to GGP I and the Demand Note, dated ______________, 199_,
issued by Green Tree to GGP II.
Definitive Certificate: The meaning specified in Section 3.4(g).
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Depositor: The Seller in its capacity as depositor hereunder.
Depository: The initial Depository, The Depository Trust Company,
the nominee of which is Cede & Co., as the registered Holder of Class B
Certificates representing $________ in aggregate Class B Certificate Balance and
of Class I Certificates representing $________ in aggregate Notional Balance,
as of the Closing Date, and any permitted successor depository. The Depository
shall at all times be a "clearing corporation" as defined in Section 8-102(3) of
the Uniform Commercial Code of the State of New York.
Depository Agreement: The agreement among the Trust, the
Administrator and The Depository Trust Company, as the initial Depository, dated
as of the Closing Date, relating to the Certificates, substantially in the form
attached as Exhibit C.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Dissolution Event: With respect to any General Partner, means the
withdrawal or expulsion of such Person as General Partner of the Trust or the
termination or dissolution of such Person, or the occurrence of an Insolvency
Event with respect to such Person.
ERISA: The meaning assigned to such term in Section 3.4(j).
Expenses: The meaning assigned to such term in Section 8.2.
Indemnified Parties: The meaning assigned to such term in Section
8.2.
General Partner: Initially, GGP I and GGP II, or any subsequent
Holder of a Class B-GP Certificate as permitted by the Agreement.
GGP I: Green Tree First GP Inc., a Delaware corporation.
GGP II: Green Tree Second GP Inc., a Delaware corporation.
Green Tree: Green Tree FInancial Corporation, a Minnesota
corporation, and its successors in interest.
Minimum Net Worth: At any time of determination, and with respect
to each General Partner, net worth equal to the sum of 3.85% of the Class B
Certificate Balance as of the Initial Cutoff Date and 3.85% of the aggregate
public offering price of the Class I Certificates. For the purpose of the
determination of Minimum Net Worth: (i) each Demand Note issued to such General
Partner shall
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be valued at par, (ii) assets subject to a lien shall be valued at zero, (iii)
Certificates or any other interests in any entity taxable as a partnership for
federal income tax purposes shall be valued at zero, (iv) investments shall be
valued at their respective purchase prices plus accrued interest and (v) demand
notes of Green Tree issued as contributions to such General Partner in
connection with its status as a general partner of any other partnership formed
pursuant to trust agreements substantially similar to this Agreement shall be
valued at an amount equal to the excess, if any, of (a) the aggregate current
amount of all such demand notes over (b) 3.85% of the aggregate Certificate
Balance (and the proportionate remaining purchase price of all Class I
Certificates) (as such terms are defined in the related trust agreement) of all
certificates issued by such partnerships, as of such date of determination.
Notional Balance: The meaning specified in the Sale and Servicing
Agreement.
Owner or Certificate Owner: With respect to any Book-Entry
Certificate, each Person who is the beneficial owner of a Book-Entry Certificate
as reflected in the records of the Depository, or if a Depository Participant is
not the Certificate Owner, then as reflected in the records of a Person
maintaining an account with the Depository (directly or indirectly, in
accordance with the rules of the Depository); and with respect to any Definitive
Certificate, the Certificateholder.
Owner Trustee: ________________________, or its successor in
interest, acting not individually but solely as trustee, and any successor
trustee appointed as provided in this Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant
to Section 3.9, which initially shall be ________________________.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day immediately preceding such Distribution Date.
Related Documents: The Sale and Servicing Agreement, the Indenture,
the Certificates, the Notes, each Subsequent Transfer Agreement, the Custodian
Agreement, the Administration Agreement, the Depository Agreements, and the
Underwriting Agreement between the Seller and the underwriters of the
Certificates and Notes. The Related Documents executed by any party are
referred to herein as "such party's Related Documents," "its Related Documents"
or by a similar expression.
Sale and Servicing Agreement: The Sale and Servicing Agreement, dated
as of ______________, 199_ among the Trust, Green Tree, as Seller and as
Servicer, and __________________________________, as Backup Servicer, as the
same may be amended and supplemented from time to time.
Secretary of State: The Secretary of State of the State of Delaware.
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Seller: Green Tree, or its successor in interest.
Trust: The trust created by this Agreement, the estate of which
consists of the Trust Property.
Trust Accounts: The Collection Account, the Subcollection Account,
the Lockbox Account, the Pre-Funding Account, the Reserve Account, the
Certificate Distribution Account and the Note Distribution Account.
Trust Property: The property and proceeds of every description
conveyed pursuant to Section 2.5 hereof and Sections 2.1 and 2.4 of the Sale and
Servicing Agreement, together with the Trust Accounts (including all Eligible
Investments therein and all proceeds therefrom).
SECTION 1.2. Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation." To the extent that definitions are contained in this Agreement, or
in any such certificate or other document, such definitions shall control.
SECTION 1.3. Calculations. All calculations of the amount of
interest accrued on the Certificates shall be made on the basis of a 360-day
year consisting of twelve 30-day months.
SECTION 1.4. Section References. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.5. Action by or Consent of Certificateholders.
(a) Except as expressly provided herein, any action that may be taken
by the Certificateholders under this Agreement may be taken by a majority of
each class affected with the Class B Certificateholders and the Class B-GP
Certificateholders voting together unless the action proposed affects only one
class or unless this Agreement provides that the vote with respect to the matter
may be taken by only one class, in which case only the vote of the affected
class shall be required. Except as expressly provided herein, any written
notice or consent of the Class B Certificateholders or the Class B-GP
Certificateholders delivered pursuant to this Agreement shall be effective for
such class if signed by Holders of the Class B
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<PAGE>
Certificates or the Class B-GP Certificates, as the case may be, evidencing not
less than a majority of the Class B Certificate Balance represented by the Class
B Certificates, a majority of the Class B Certificate Balance represented by the
Class B-GP Certificates, respectively, at the time of the delivery of such
notice.
(b) Whenever any provision of this Agreement refers to action to be
taken, or consented to, by Certificateholders, such provision shall be deemed to
refer to Certificateholders of record as of the Record Date immediately
preceding the date on which such action is to be taken, or consent given, by
Certificateholders. Solely for the purposes of any action to be taken, or
consented to, by Class B Certificateholders, any Class B Certificate or
registered in the name of GGP I, GGP II, OFL or any Affiliate thereof shall be
deemed not to be outstanding and the Class B Certificate Balance represented
thereby shall not be taken into account in determining whether the requisite
percentage of the Class B Certificate Balance or Notional Balance necessary to
effect any such action or consent has been obtained; provided, however, that,
solely for the purpose of determining whether the Owner Trustee is entitled to
rely upon any such action or consent, only Class B Certificates which the Owner
Trustee knows to be so owned shall be so disregarded.
ARTICLE II
CREATION OF TRUST
SECTION 2.1. Creation of Trust. There is hereby formed a trust to be
known as "Green Tree Asset Contracts Trust, 199_-_," in which name the Trust may
conduct business, make and execute contracts and other instruments and sue and
be sued.
SECTION 2.2. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
and the Depositor.
SECTION 2.3. Purposes and Powers. The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement and to sell the Notes and the Certificates;
(ii) with the proceeds of the sale of the Notes and the Certificates, to
fund the Pre-Funding Account and the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance to the
Seller pursuant to the Sale and Servicing Agreement;
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<PAGE>
(iii) to assign, grant, transfer, pledge, mortgage and convey the Trust
Property, to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders and to hold, manage and distribute to the Certificateholders
pursuant to the terms of the Sale and Servicing Agreement any portion of the
Trust Property released from the Lien of, and remitted to the Trust pursuant to,
the Indenture;
(iv) to enter into and perform its obligations under the Related Documents
to which it is to be a party;
(v) to engage in those activities, including entering into agreements, that
are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(vi) subject to compliance with the Related Documents, to engage in such
other activities as may be required in connection with conservation of the Trust
Property and the making of distributions to the Owners and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or expressly authorized by the terms of this Agreement or
the Related Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $10. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Trust Property and
shall be deposited in the Certificate Distribution Account. The Depositor shall
pay organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the use and benefit of the Owners, subject to the interests
and rights in the Trust Property granted to other Persons by the Related
Documents. It is the intention and agreement of the parties hereto that the
Trust constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is the
intention and agreement of
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the parties hereto that, solely for income and franchise tax purposes, the Trust
shall be treated as a partnership. The parties agree that, unless otherwise
required by appropriate tax authorities, the Trust will file or cause to be
filed annual or other necessary returns, reports and other forms consistent with
the characterization of the Trust as a partnership for such tax purposes. On
the date hereof, the Owner Trustee shall file the Certificate of Trust required
by Section 3810(a) of the Business Trust Statute in the Office of the Secretary
of State. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.7. Liability of the Owners.
(a) Each of GGP I and GGP II shall be liable directly to indemnify
each injured party for all losses, claims, damages, liabilities and expenses of
the Trust, to the extent not paid out of the Trust Property, to the extent that
such Person would be liable if the Trust were a partnership under the Delaware
Revised Uniform Limited Partnership Act and such Person were a general partner;
provided, however, that neither GGP I nor GGP II shall be liable for any losses
incurred by a Certificate Owner in the capacity of an investor in the
Certificates or a Note Owner in the capacity of an investor in the Notes;
provided, further, that neither GGP I nor GGP II shall be liable to indemnify
any injured party if such party has agreed that its recourse against the Trust
for any obligation or liability of the Trust to such party shall be limited to
the assets of the Trust. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the provisos to the
preceding sentence for which neither GGP I nor GGP II shall be liable) shall be
deemed third party beneficiaries of this paragraph. The obligations of GGP I
and GGP II under this paragraph shall be evidenced by Class B-GP Certificates as
described in Section 3.4(i), which for purposes of the Business Trust Statute
shall be deemed to be separate classes of Certificates from the Class B
Certificates.
(b) No Owner, other than to the extent set forth in paragraph (a),
shall have any personal liability for any liability or obligation of the Trust
or by reason of any action taken by the parties to this Agreement pursuant to
any provisions of this Agreement or any Related Document.
SECTION 2.8. Title to Trust Property.
(a) Legal title to all the Trust Property shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The Owners shall not have legal title to any part of the Trust
Property. The Owners shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and IX.
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No transfer, by operation of law or otherwise, of any right, title or interest
by any Certificateholder of its ownership interest in the Trust Property shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Property.
SECTION 2.9. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware.
The Trust shall not have any employees in any state other than Delaware;
provided, however, that nothing herein shall restrict or prohibit the Owner
Trustee, the Servicer or any agent of the Trust from having employees within or
without the State of Delaware. Payments will be received by the Trust only in
Delaware, and payments will be made by the Trust only from Delaware. The only
office of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of the Depositor, GGP I
and GGP II. By execution of this Agreement, each of the Depositor, GGP I and
GGP II makes the following representations and warranties with respect to itself
on which the Owner Trustee relies in accepting the Trust Property in trust and
issuing the Certificates.
(a) Organization and Good Standing. It has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority to own its properties and to conduct
its business as such properties are currently owned and as such business is
currently conducted and is proposed to be conducted pursuant to this Agreement
and the Related Documents.
(b) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Related Documents requires such qualification.
(c) Power and Authority. It has the power and authority to execute
and deliver this Agreement and its Related Documents and to perform its
obligations pursuant thereto; and the execution, delivery and performance of
this Agreement and its Related Documents have been duly authorized by all
necessary corporate action.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related Documents,
except for such as have been obtained, effected or made.
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(e) No Violation. The consummation of the transactions contemplated
by this Agreement and its Related Documents and the fulfillment of its
obligations under this Agreement and its Related Documents shall not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under, its certificate
of incorporation or by-laws, or any indenture, agreement, mortgage, deed of
trust or other instrument to which it is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement, mortgage, deed of trust
or other instrument, or violate any law, order, rule or regulation applicable to
it of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over it or any
of its properties.
(f) No Proceedings. There are no proceedings or investigations
pending or, to its knowledge threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental instrumentality
having jurisdiction over it or its properties (A) asserting the invalidity of
this Agreement or any of the Related Documents, (B) seeking to prevent the
issuance of the Certificates or the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the Related Documents, (C)
seeking any determination or ruling that might materially and adversely affect
its performance of its obligations under, or the validity or enforceability of,
this Agreement or any of the Related Documents, or (D) seeking to adversely
affect the federal income tax or other federal, state or local tax attributes of
the Certificates.
SECTION 2.11. Federal Income Tax Allocations. Net income of the
Trust for any month as determined for Federal income tax purposes (and each item
of income, gain, loss and deduction entering into the computation thereof) shall
be allocated:
(a) among the Class B Certificateholders as of the first Record Date
following the end of such month, in proportion to their ownership of principal
amount of Class B Certificates on such date, an amount of net income up to the
sum of (i) the Class B Interest Distributable Amount for such month, (ii) the
portion of the market discount on the Contracts accrued during such month that
is allocable to the excess of the initial aggregate principal amount of the
Class B Certificates over their initial aggregate issue price, and (iii) any
Class B Prepayment Premium distributable to the Class B Certificateholders with
respect to such month; and
(b) next, to the Class B-GP Certificateholders pro rata in accordance
with their respective proportion of the Class B Certificate Balance represented
thereby to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make
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up such shortfall before being allocated as provided in clause (b). If the net
income of the Trust for any month is insufficient for the allocations described
in clause (b) above, subsequent net income shall first be allocated to make up
such shortfall before being allocated as provided in clause (c). Net losses of
the Trust, if any, for any month as determined for Federal income tax purposes
(and each item of income, gain, loss and deduction entering into the computation
thereof) shall be allocated to the Class B-GP Certificateholder and Class I-GP
Certificateholders are reasonably expected to bear the economic burden of such
net losses, then net losses shall be allocated among the Class B
Certificateholders as of the first Record Date following the end of such month
in proportion to their ownership of principal amount of Class B Certificates on
such Record Date until the total amount of losses allocated to the Class B
Certificateholders pursuant to this Section 2.11 plus the total principal amount
distributed to the Class B Certificateholders equals the aggregate initial
principal balance of the Class B Certificates, and any remaining net losses
shall be allocated on a pro rata basis to the Class B-GP Certificateholders.
Notwithstanding anything in this Agreement to the contrary, the Class B-GP
Certificateholders and the Class I-GP Certificateholders shall be allocated an
aggregate of at least 1% of each item of income, profit, gain or loss of the
Trust. The General Partners are authorized to modify the allocations in this
paragraph if necessary or appropriate, in their sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the Class
B-GP Certificateholders, the Class I-GP Certificateholders, the Class B
Certificateholders or the Class I Certificateholders, or to comply with the
provisions of the Code and the accompanying Treasury Regulations.
SECTION 2.12. Covenants of the General Partners. Each General
Partner agrees and covenants for the benefit of each Owner and the Owner
Trustee, during the term of this Agreement, and to the fullest extent permitted
by applicable law, that:
(a) it shall not (i) assign, sell, convey, pledge, transfer,
reconvey, cancel, forgive, compromise or otherwise dispose of the Demand
Note held by it, in whole or in part, (ii) make any distribution other than
to the Trust or unless the aggregate net worth of the General Partner
following such distribution shall be at least equal to the Minimum Net
Worth or (iii) except as specifically permitted by this Agreement, sell,
transfer, assign, give or encumber by operation of law or otherwise any of
its assets;
(b) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, the interest evidenced
by its Class B-GP Certificates;
(c) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted
by its certificate of incorporation and the Related Documents;
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(d) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to the bankruptcy of the Trust, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part
of the property of the Trust or cause or permit the Trust to make any
assignment for the benefit of creditors, or admit in writing the inability
of the Trust to pay its debts generally as they become due, or declare or
effect a moratorium on the debt of the Trust or take any action in
furtherance of any such action;
(e) it shall obtain from each counterparty to each Related
Document to which it or the Trust is a party and each other agreement
entered into on or after the date hereof to which it or the Trust is a
party, an agreement by each such counterparty that prior to the occurrence
of the event specified in Section 9.1(e) such counterparty shall not
institute against, or join any other Person in instituting against, it or
the Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceedings under the laws of the
United States or any state of the United States;
(f) it shall not, for any reason, withdraw or attempt to withdraw
from this Agreement, dissolve, institute proceedings for it to be
adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition seeking
or consenting to reorganization or relief under any applicable federal or
state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of it or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability
to pay its debts generally as they become due, or declare or effect a
moratorium on its debt or take any action in furtherance of any such
action.
SECTION 2.13. Covenants of the Certificate Owners. Each Certificate
Owner by becoming a beneficial owner of the Book-Entry Certificate agrees:
(a) to be bound by the terms and conditions of the Certificates
of which such Owner is the beneficial owner and of this Agreement,
including any supplements or amendments hereto and to perform the
obligations of an Owner as set forth therein or herein, in all respects as
if it were a signatory hereto. This undertaking is made for the benefit of
the Trust, the Owner Trustee and all other Owners present and future.
(b) to hereby appoint GGP I as such Owner's agent and attorney-
in-fact to sign any federal income tax information return filed on
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behalf of the Trust and agree that, if requested by the Trust, it will sign
such federal income tax information return in its capacity as holder of an
interest in the Trust. Each Owner also hereby agrees that in its tax
returns it will not take any position inconsistent with those taken in any
tax returns filed by the Trust .
(c) if such Owner is other than an individual or other entity
holding its Certificate through a broker who reports securities sales on
Form 1099-B, to notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of
the transfer.
(d) until the completion of the events specified in Section
9.1(e), not to, for any reason, institute proceedings for the Trust or a
Class B-GP Certificateholder to be adjudicated a bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against
the Trust, or file a petition seeking or consenting to reorganization or
relief under any applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part
of its property, or cause or permit the Trust to make any assignment for
the benefit of its creditors, or admit in writing its inability to pay its
debts generally as they become due, or declare or effect a moratorium on
its debt or take any action in furtherance of any such action.
ARTICLE III
THE CERTIFICATES
SECTION 3.1. Initial Ownership. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.5 and until the issuance
of the Certificates, the Depositor shall be the sole beneficiary of the Trust.
SECTION 3.2. The Certificates. Class B Certificates, in an aggregate
principal amount of $__________, shall be issued in denominations of $1,000
initial principal amount and integral multiples thereof. One Class B-GP
Certificate shall be issued to each of GGP I and GGP II pursuant to Section
3.4(i) in denominations of $________ each, representing in the aggregate at
least 1% of the initial Class B Certificate Balance. The Certificates shall be
executed on behalf of the Owner Trustee by manual or facsimile signature of any
authorized signatory of the Owner Trustee having such authority under the Owner
Trustee's seal imprinted or otherwise affixed thereon and attested on behalf of
the Owner Trustee by the manual or facsimile signature of any authorized
signatory of the Owner Trustee. Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures were
affixed, authorized to sign on behalf of the Owner Trustee shall be validly
issued and entitled to the benefits of this Agreement,
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notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates.
SECTION 3.3. Authentication of Certificates. Simultaneously with the
sale, assignment and transfer to the Trust of the Initial Contracts and the
delivery to the Owner Trustee of the Contract Files and the other Trust Property
pursuant to the Sale and Servicing Agreement, the Owner Trustee shall cause
Class B Certificates and Class B-GP Certificates in authorized denominations in
an aggregate principal amount equal to the Class B Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
order of the Depositor. No Certificate shall entitle its holder to any benefit
under this Agreement, or shall be valid for any purpose, unless there shall
appear on such Certificate a certificate of authentication substantially in the
form set forth in Exhibit B-1 and Exhibit B-2 in the case of a Class B
Certificate or a Class B-GP Certificate, respectively, executed by the Owner
Trustee or the Authentication Agent, by manual or facsimile signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder.
_________________________________ is hereby initially appointed Authentication
Agent. All Certificates shall be dated the date of their authentication.
SECTION 3.4. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall maintain, or cause to be
maintained, at the office or agency maintained pursuant to Section 3.8, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as provided in this Agreement.
_________________________________ is hereby initially appointed Certificate
Registrar for the purpose of registering Certificates and transfers and
exchanges of Certificates as provided in this Agreement.
(b) Upon surrender for registration of transfer of any Certificate at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver (or shall cause the Authentication Agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
class and aggregate proportion of Class B Balance dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Holder, Certificates may be exchanged for other Certificates of the same
class in authorized denominations of a like aggregate amount upon surrender of
the Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by
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the Holder or his attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by the Owner Trustee in accordance with its customary
practice.
(d) No service charge shall be made for any registration of transfer
or exchange of Certificates, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
(e) Except as provided in paragraphs (g) and (i) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Book-Entry
Certificates may not be transferred by the Owner Trustee except to a successor
depository designated pursuant to paragraph (f) below; (ii) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with
respect to ownership and transfers of such Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Owner Trustee shall deal with
the Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners for purposes of exercising the rights
of Holders under this Agreement (and requests and directions for and votes of
such representatives shall not be deemed to be inconsistent if they are made
with respect to different Certificate Owners); and (vi) the Owner Trustee may
rely and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and persons
shown on the books of such indirect participating firms as direct or indirect
Certificate Owners.
(f) If the Administrator, the Servicer or the Depository advises the
Owner Trustee in writing that the Depository is no longer willing or able
properly to discharge its duties as Depository, the Owner Trustee shall so
notify the Depository and demand the return of all Certificates held by the
Depository. The Certificate Registrar shall thereupon register the transfer of
such Certificates to a successor Depository named by the Seller and acceptable
to the Servicer and the Owner Trustee.
(g) If (x)(i) the Administrator, the Servicer or the Depository
advises the Owner Trustee in writing that the Depository is no longer willing or
able properly to discharge its responsibilities as Depository, and (ii) the
Administrator, the Seller or the Servicer is unable to locate a qualified
successor, (y) the Administrator at its sole option advises the Owner Trustee in
writing that it elects to terminate the book-entry system through the
Depository, or (z) upon the occurrence of a Servicer Termination Event, Class B
Certificateholders or representing a majority of the Class B Certificate Balance
advise the Owner Trustee through the
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Depository that the continuation of a book-entry system is no longer in the best
interests of the Certificate Owners of such class or classes of Certificates,
the Owner Trustee shall notify all Certificate Owners of such class or classes,
as applicable, through the Depository of the occurrence of any such event and of
the availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners of such class or classes, as applicable,
requesting the same. Upon surrender to the Owner Trustee of the Certificates by
the Depository, accompanied by registration instructions from the Depository for
registration of transfer, the Owner Trustee shall issue the Definitive
Certificates in accordance with such instructions. Neither the Certificate
Registrar nor the Owner Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. The Seller shall pay all expenses incurred in
connection with the notification of Certificate Owners and the issuance of
Definitive Certificates hereunder. Upon the issuance of Definitive Certificates
the Owner Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.
(h) On or prior to the Closing Date, there shall be delivered by or on
behalf of the Trust to the Depository one typewritten Class B Certificate, each
registered in the name of the Depository's nominee, Cede & Co. The total face
amounts of the Class B Certificate shall represent (together with the Class B-GP
Certificates issued to GGP I and GGP II pursuant to Section 3.4(i)) 100% of the
Class B Certificate Balance, as of the Initial Cutoff Date. If, however, the
aggregate principal amount of the Class B Certificates exceeds $200,000,000,
Class B Certificates will be issued with respect to each $200,000,000 of
principal amount and an additional Class B Certificate will be issued with
respect to any remaining principal amount in respect of the Class B
Certificates. Each such Class B Certificate registered in the name of the
Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the
Owner Trustee or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co.
or in such other name as requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein."
(i) On the Closing Date, GGP I and GGP II shall purchase for adequate
consideration and thereafter shall retain beneficial and record ownership of
Class B-GP Certificates representing in the aggregate at least 1% of the initial
Class B Certificate Balance. The Class B-GP Certificates shall be non-
transferable and any attempted transfer of Class B-GP Certificates shall be
void; provided that a Class
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B-GP Certificate may be transferred, together, to a successor General Partner as
provided in Section 9.2. The Owner Trustee shall cause any Class B-GP
Certificate to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE,
EXCEPT UNDER THE LIMITED CONDITIONS SPECIFIED IN THE TRUST AGREEMENT."
(j) The Certificates may not be acquired by or for the account of (i)
an employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title 1 of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1985, as amended, or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity (each, a "Benefit Plan"). By accepting and holding a Certificate, the
Holder thereof shall be deemed to have represented and warranted that it is not
a Benefit Plan.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Certificate Registrar, or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (b) there is delivered to the
Certificate Registrar and the Owner Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute, authenticate and deliver (or the Authentication Agent shall
authenticate and deliver), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
portion of Class B Certificate Balance or Notional Balance, as applicable. In
connection with the issuance of any new Certificate under this Section 3.5, the
Owner Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Owner Trustee and the
Certificate Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 3.5 shall constitute conclusive evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 3.6. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar and any agent of the Owner Trustee or the Certificate Registrar may
treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
5.2 and for all other purposes whatsoever, and neither the Owner Trustee, the
Certificate Registrar nor any agent of the Owner Trustee or the Certificate
Registrar shall be affected by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, within 15 days after receipt by the Owner Trustee of a written request
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therefor, a list, in such form as the Servicer may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record Date
for payment of distributions to Certificateholders. If Definitive Certificates
have been issued and three or more Certificateholders of a class, or one or more
Certificateholders evidencing not less than 25% of the Class B Certificate
Balance or not less than 25% of the Notional Balance, as applicable (hereinafter
referred to as "Applicants"), apply in writing to the Owner Trustee, and such
application states that the Applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and is accompanied by a copy of the communication that such
Applicants propose to transmit, then the Owner Trustee shall, within five
Business Days after the receipt of such application, afford such Applicants
access, during normal business hours, to the current list of Certificateholders.
Every Certificateholder, by receiving and holding a Certificate, agrees that
none of the Servicer or the Owner Trustee, nor any agent thereof, shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders under this Agreement, regardless of the
source from which such information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Owner Trustee
shall maintain in ________________, Delaware, an office or offices or agency or
agencies where Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Certificates and the Related Documents may be served. The Owner Trustee
initially designates __________________________________________ as its
principal corporate trust office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor and to the Certificateholders of any
change in the location of the Certificate Register or any such office of agency.
SECTION 3.9. Appointment of Paying Agent. The Paying Agent shall
make distributions to Certificateholders from the Certificate Distribution
Account pursuant to Section 5.2 and shall report the amounts of such
distributions to the Owner Trustee. Any Paying Agent shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Owner Trustee may
revoke such power and remove the Paying Agent if the Owner Trustee determines in
its sole discretion that the Paying Agent shall have failed to perform its
obligations under this Agreement in any material respect. The Paying Agent
shall initially be _________________, and any co-paying agent chosen by
_________________ and acceptable to the Owner Trustee. _________________ shall
be permitted to resign as Paying Agent upon 30 days' written notice to the Owner
Trustee. In the event that _________________ shall no longer be the Paying
Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such successor
Paying Agent or any additional Paying Agent appointed by the Owner Trustee to
execute and deliver to the Owner Trustee an instrument in which such successor
Paying Agent or additional Paying Agent shall agree with the Owner Trustee that
as Paying Agent,
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such successor Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee, and upon removal of a Paying Agent, such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Sections 7.1, 7.3, 7.4 and 8.2 shall apply to the Owner Trustee also in its role
as Paying Agent for so long as the Owner Trustee shall act as Paying Agent and,
to the extent applicable, to any other Paying Agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Restriction on Power of Certificate Owner. No
Certificate Owner shall have any right to vote or in any manner otherwise
control the operation and management of the Trust except as expressly provided
in this Agreement.
SECTION 4.2. Prior Notice to Certificateholders with Respect to
Certain Matters. The Owner Trustee shall not take any of the following actions,
unless at least 30 days before the taking of such action, the Owner Trustee
shall have notified the Certificateholders in writing of the proposed action and
the Certificateholders shall not have notified the Owner Trustee in writing
prior to the 30th day after such notice is given that such Certificateholders
have withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust unless such amendment is required to be filed under
the Business Trust Statute or unless such amendment would not materially
and adversely affect the interests of the Certificate Owners;
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required unless such
amendment would not materially and adversely affect the interests of the
Certificate Owners; or
(c) the amendment, change or modification of the Administration
Agreement, unless such amendment would not materially and adversely affect
the interests of the Certificate Owners.
SECTION 4.3. Action by Certificate Owners with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a
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voluntary proceeding in bankruptcy relating to the Trust without the unanimous
prior approval of all Class B Certificate Owners and all Class I Certificate
Owners and the delivery to the Owner Trustee by each such Class B Certificate
Owner and Class I Certificate Owner of a certificate certifying that such Class
B Certificate Owner or Class I Certificate Owner, as the case may be, reasonably
believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificate Owners' Power. No
Certificateholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement or any Related
Document, unless the Class B Certificateholders and Class I Certificateholders
are the Instructing Party pursuant to Section 6.3 and unless a Class B
Certificateholder and Class I Certificateholder previously shall have given to
the Owner Trustee a written notice of default and of the continuance thereof, as
provided in this Agreement and unless Class B Certificateholders evidencing not
less than 25% of the Class B Certificate Balance represented by the Class B
Certificates (excluding the Class B-GP Certificates) or Class I Certificates
representing at least 25% of the aggregate Notional Balance represented by the
Class I Certificates (excluding the Class I-GP Certificates) shall have made
written request upon the Owner Trustee to institute such action, suit or
proceeding in its own name as Owner Trustee under this Agreement and shall have
offered to the Owner Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and the
Owner Trustee, for 30 days after its receipt of such notice, request, and offer
of indemnity, shall have neglected or refused to institute any such action,
suit, or proceeding, and during such 30-day period no request or waiver
inconsistent with such written request has been given to the Owner Trustee
pursuant to and in compliance with this Section or Section 6.3; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Owner Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb, or prejudice the rights of the Holders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 4.4, each and every
Certificateholder and the Owner Trustee shall be entitled to such relief as can
be given either at law or in equity.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Trust Accounts.
(a) The Owner Trustee, for the benefit of the Certificateholders,
shall establish and maintain the Certificate Distribution Account in the name of
the Trust for the benefit of the Certificateholders. The Certificate
Distribution Account shall be an Eligible Account and initially shall be a
segregated trust account established with the Owner Trustee and maintained with
the Owner Trustee.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Account, the Owner Trustee shall within 5
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Certificate Distribution
Account as an Eligible Account and shall transfer any cash and/or any
investments to such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall,
to the extent permitted by applicable laws, rules and regulations, be invested
by the Owner Trustee in Eligible Investments that mature not later than one
Business Day prior to the Distribution Date for the Monthly Period to which such
amounts relate. Investments in Eligible Investments shall be made in the name
of the Trust, and such investments shall not be sold or disposed of prior to
their maturity. Any investment of funds in the Certificate Distribution Account
shall be made in Eligible Investments held by a financial institution with
respect to which (a) such institution has noted the Owner Trustee's interest
therein by book entry or otherwise and (b) a confirmation of the Owner Trustee's
interest has been sent to the Owner Trustee by such institution, provided that
such Eligible Investments are (i) specific certificated securities, and (ii)
either (A) in the possession of such institution or (B) in the possession of a
clearing corporation in New York or Delaware, registered in the name of such
clearing corporation, not endorsed for collection or surrender or any other
purpose not involving transfer, not containing any evidence of a right or
interest inconsistent with the Owner Trustee's security interest therein, and
held by such clearing corporation in an account of such institution. Subject to
the other provisions hereof, the Owner Trustee shall have sole control over each
such investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the Owner
Trustee or its agent, together with each document of transfer, if any, necessary
to transfer title to such investment to the Owner Trustee in a manner which
complies with this Section 5.1. All interest, dividends, gains upon sale and
other income from, or earnings on investment of funds in the Certificate
Distribution Account shall be distributed on the next Distribution Date pursuant
to Section 4.6 of the Sale
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and Servicing Agreement. The Seller shall deposit in the Certificate
Distribution Account an amount equal to any net loss on such investments
immediately as realized.
SECTION 5.2. Application of Funds in Certificate Distribution
Account.
(a) On each Distribution Date the Owner Trustee will, based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 3.9 of the Sale and Servicing Agreement,
distribute to Certificateholders, to the extent of the funds available, amounts
deposited in the Certificate Distribution Account pursuant to Sections 4.6 and
4.7 of the Sale and Servicing Agreement on such Distribution Date in the
following order of priority:
(i) first, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 4.6 of the Sale and Servicing
Agreement, to the Class B Certificateholders, on a pro rata basis, an
amount equal to the Class B Interest Distributable Amount;
(ii) second, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 4.6 of the Sale and Servicing
Agreement, to the Class B Certificateholders, on a pro rata basis, an
amount equal to the Class B Principal Distributable Amount; and
(iii) third, from the amounts, if any, deposited in the
Certificate Distribution Account pursuant to Section 4.7(b) of the Sale and
Servicing Agreement, to the Class B Certificateholders an amount equal to
the Class B Prepayment Amount; and from amounts, if any, deposited in the
Certificate Distribution Account pursuant to Section 4.7(c) of the Sale and
Servicing Agreement, to the Class B Certificateholders, on a pro rata
basis, an amount equal to the Class B Prepayment Premium.
(b) On the Distribution Date following the date on which amounts
received in respect of the Seller's or the Servicer's exercise of its option to
purchase the corpus of the Trust pursuant to Section 9.1(a) of the Sale and
Servicing Agreement are deposited in the Certificate Distribution Account, the
Owner Trustee will distribute such amounts taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to Class B Certificateholders, on a pro rata basis,
an amount equal to the Class B Interest Distributable Amount; and
(ii) second, to Class B Certificateholders, on a pro rata basis,
for amounts due and unpaid on the Class B Certificates for principal.
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(c) On the Distribution Date on which Insolvency Proceeds are
deposited in the Certificate Distribution Account pursuant to Section 9.1(b) of
the Sale and Servicing Agreement (or on the Distribution Date immediately
following such deposit if such proceeds are not deposited in the Certificate
Distribution Account on a Distribution Date), the Owner Trustee will distribute
the Insolvency Proceeds so deposited in the Certificate Distribution Account
taking into account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to Class B Certificateholders, on a pro rata basis,
an amount equal to the Class B Interest Distributable Amount; and
(ii) second, to Class B Certificateholders, on a pro rata basis,
for amounts due and unpaid on the Class B Certificates for principal.
(d) On the Distribution Date following the date on which the
Indenture Trustee makes payments of money or property in respect of liquidation
of the Trust Property pursuant to Section 5.06 of the Indenture and deposits
funds received in connection with such liquidation in the Certificate
Distribution Account, the Owner Trustee will distribute such funds taking into
account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to Class B Certificateholders, on a pro rata basis,
an amount equal to the Class B Interest Distributable Amount; and
(ii) second, to Class B Certificateholders, on a pro rata basis,
for amounts due and unpaid on the Class B Certificates for principal.
(e) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement required pursuant to Section 4.9 of the Sale and
Servicing Agreement.
(f) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to an Owner, such tax shall reduce the amount
otherwise distributable to the Owner in accordance with this Section. The Owner
Trustee is hereby authorized and directed to retain from amounts otherwise
distributable to the Owners sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to an
Owner shall be treated as cash distributed to such Owner at the time it is
withheld by the Trust and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Owner), the Owner Trustee may
in its sole discretion withhold such amounts in accordance with this paragraph
(f). In the event that an Owner wishes to apply for a refund of any such
withholding tax, the Owner Trustee shall reasonably cooperate with such
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Owner in making such claim so long as such Owner agrees to reimburse the Owner
Trustee for any out-of-pocket expenses incurred.
(g) Any funds remaining in the Certificate Distribution Account after
distribution of all amounts specified in this Section 5.2 shall be distributed
to the General Partners equally.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Holder at a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Distribution Date
and such Holder's Certificates in the aggregate evidence a denomination of not
less than $1,000,000 (or if such Certificateholder is a Depositor or an
Affiliate thereof), or, if not, by check mailed to such Certificateholder at the
address of such holder appearing in the Certificate Register.
SECTION 5.4. No Segregation of Monies; No Interest. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or by the Sale and
Servicing Agreement and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
SECTION 5.5. Accounting; Reports; Tax Returns.
(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be maintained)
the books of the Trust on a calendar year basis on the accrual method of
accounting, (ii) deliver to each Owner, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Owner to prepare its Federal and state income tax
returns, (iii) file or cause to be filed such tax returns relating to the Trust
(including a partnership information return, Form 1065), and direct the Owner
Trustee to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes, (iv) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(f) with
respect to income or distributions to Owners and (v) file or cause to be filed
all documents required to be filed by the Trust with the Commission and
otherwise take or cause to be taken all such actions as are notified by the
Servicer to the Administrator as being required for the Trust's compliance with
all applicable provisions of state and federal securities laws.
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(b) The Owner Trustee shall make all elections pursuant to this
Section 5.5 as directed in writing by the General Partners. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently any
market discount that accrues with respect to the Contracts. The Owner Trustee
shall not make the election provided under Section 754 of the Code.
(c) The Owner Trustee shall sign on behalf of the Trust the tax
returns of the Trust, unless applicable law requires an Owner to sign such
documents, in which case such documents shall be signed by GGP I. In signing
any tax return of the Trust, the Owner Trustee shall rely entirely upon, and
shall have no liability for, information or calculations provided by GGP I.
(d) GGP I shall be the "tax matters partner" of the Trust pursuant to
the Code.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Related Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to or
contemplated by the Related Documents to which the Trust is to be a party and
any amendment thereto, and on behalf of the Trust, to direct the Indenture
Trustee to authenticate and deliver the Class A-1 Notes in the aggregate
principal amount of $__________, the Class A-2 Notes in the aggregate principal
amount of $__________, the Class A-3 Notes in the aggregate principal amount of
$__________, the Class A-4 Notes in the aggregate principal amount of
$__________, the Class A-5 Notes in the aggregate principal amount of
$__________, and the Class A-6 Notes in the aggregate principal amount of
$__________. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Related Documents. The Owner Trustee is further authorized, on behalf of
the Trust, to enter into the Administration Agreement, to appoint a successor
Administrator and to take from time to time such action as the Instructing Party
recommends with respect to the Related Documents so long as such actions are
consistent with the terms of the Related Documents.
SECTION 6.2. General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged through the Administrator or
such agents as shall be appointed) all of its responsibilities pursuant to the
terms of this Agreement and the Related Documents and to administer the Trust in
the interest of the Owners, subject to the Related Documents and in accordance
with the provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the
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Related Documents to the extent the Administrator has agreed in the
Administration Agreement to perform any act or to discharge any duty of the
Owner Trustee hereunder or under any Related Document, and the Owner Trustee
shall not be liable for the default or failure of the Administrator to carry out
its obligations under the Administration Agreement. Notwithstanding anything
herein or in any Related Document to the contrary, the Owner Trustee shall
discharge its obligations pursuant to Section 5.3 and Section 5.4 of the Sale
and Servicing Agreement directly and not through the Administrator or any agent.
SECTION 6.3. Action upon Instruction.
(a) Subject to Article IV, the Class B Certificateholders shall have
the exclusive right to direct the actions of the Owner Trustee in the management
of the Trust, so long as such instructions are not inconsistent with the express
terms set forth herein or in any Related Document. The Class B
Certificateholders shall not instruct the Owner Trustee in a manner inconsistent
with this Agreement or the Related Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is contrary to the terms hereof or of any Related Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Related Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the Class B
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction received from the Class B Certificateholders, the
Owner Trustee shall not be liable on account of such action to any Person. If
the Owner Trustee shall not have received appropriate instruction within ten
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Related Documents, as it shall deem to
be in the best interests of the Owners, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Related Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under
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the circumstances) to the Class B Certificateholders requesting instruction and,
to the extent that the Owner Trustee acts or refrains from acting in good faith
in accordance with any such instruction received, the Owner Trustee shall not be
liable, on account of such action or inaction, to any Person. If the Owner
Trustee shall not have received appropriate instruction within 10 days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Related Documents, as it shall deem to be in the best
interests of the Owners, and shall have no liability to any Person for such
action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust Property, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Trust is a party, except as expressly provided by the terms of this
Agreement (including as provided in Section 6.2) or in any written instruction
received by the Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Related Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for
preparing, monitoring or filing any financing or continuation statements in any
public office at any time or otherwise to perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement or any Related Document; however, the Owner Trustee will from time to
time execute and deliver such financing or continuation statements as are
prepared by the Servicer and delivered to the Owner Trustee for its execution on
behalf of the Trust for the purpose of perfecting or maintaining the perfection
of such a security interest or lien or effecting such a recording. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense (and not
at the expense of the Trust), promptly take all action as may be necessary to
discharge any liens on any part of the Trust Property that are attributable to
claims against the Owner Trustee in its individual capacity that are not related
to the ownership or the administration of the Trust Property.
SECTION 6.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of, the Trust Property except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Related
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Owners
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shall not direct the Owner Trustee to take action that would violate the
provisions of this Section.
SECTION 6.7. Administration Agreement.
(a) The Administrator is authorized to execute on behalf of the Trust
all documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust to prepare, file or deliver pursuant to the
Related Documents. Upon written request, the Owner Trustee shall execute and
deliver to the Administrator a power of attorney appointing the Administrator
its agent and attorney-in-fact to execute all such documents, reports, filings,
instruments, certificates and opinions.
(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Owner Trustee may, and is hereby
authorized and empowered to, appoint or consent to the appointment of a
successor Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Owner Trustee
may, and is hereby authorized and empowered to, appoint or consent to the
appointment of a Person to perform substantially the same duties as are assigned
to the Administrator in the Administration Agreement pursuant to an agreement
containing substantially the same provisions as are contained in the
Administration Agreement.
(d) The Owner Trustee shall promptly notify each Owner of any default
by or misconduct of the Administrator under the Administration Agreement of
which the Owner Trustee has received written notice or of which a Responsible
Officer has actual knowledge.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trust and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Trust Property upon the terms of the Related Documents
and this Agreement. The Owner Trustee shall not be answerable or accountable
hereunder or under any Related Document under any circumstances, except (i) for
its own willful misconduct or gross negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 7.3, (iii) for
liabilities arising from the failure of the Owner Trustee to perform obligations
expressly undertaken by it in the last sentence of Section 6.4 hereof, (iv) for
any investments issued by the Owner
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Trustee or any branch or affiliate thereof in its commercial capacity or (v) for
taxes, fees or other charges on, based on or measured by, any fees, commissions
or compensation received by the Owner Trustee in connection with any of the
transactions contemplated by this Agreement or any Related Document. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the instructions of the Class B Certificateholders;
(c) no provision of this Agreement or any Related Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Related Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under this Agreement or any of the
Related Documents, including the principal of and interest on the
Certificates or the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or the General Partners or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Property or
for or in respect of the validity or sufficiency of the Related Documents,
other than the certificate of authentication on the Certificates, and the
Owner Trustee shall in no event assume or incur any liability, duty, or
obligation to the Custodian, the Indenture Trustee, any Noteholder or to
any Owner, other than as expressly provided for herein and in the Related
Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Custodian, the Indenture Trustee or
the Servicer under any of the Related Documents or otherwise and the Owner
Trustee shall have no obligation or liability to perform the obligations of
the Trust under this Agreement or the Related Documents that are required
to be performed by the Administrator under the Administration Agreement,
the Custodian under the Custodian Agreement, the Indenture Trustee under
the Indenture or the Servicer under the Sale and Servicing Agreement; and
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(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Related Document, at the
request, order or direction of the Class B Certificateholders, unless such
Class B Certificateholders has offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities
that may be incurred by the Owner Trustee therein or thereby. The right of
the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Related Document shall not be construed as a duty, and
the Owner Trustee shall not be answerable for other than its gross
negligence or willful misconduct in the performance of any such act.
SECTION 7.2. Furnishing of Documents. The Owner Trustee shall
furnish to the Owners promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Related Documents unless the Owners have previously received such
items.
SECTION 7.3. Representations and Warranties. The Owner Trustee
hereby represents and warrants to the Depositor and the Owners that:
(a) It is a _________________ duly organized and validly existing
in good standing under the laws of the State of __________. It has all
requisite corporate power and authority and all franchises, grants,
authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations under
this Agreement and each Related Document to which the Trust is a party.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Related Document to
which the Trust is a party, and this Agreement and each Related Document
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound or result in the creation or imposition of any lien, charge or
encumbrance on the Trust Property resulting from actions by or claims
against the Owner Trustee
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individually which are unrelated to this Agreement or the Related
Documents.
SECTION 7.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter, and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Related Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Related Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as provided
in this Article VII, in accepting the trusts hereby created
_____________________ acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Related
Document shall look only to the Trust Property for payment or satisfaction
thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates, Notes or
Contracts. The recitals contained herein and in the Certificates (other than
the signature and counter-signature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Depositor (other than the signature or
counter-signature of the Owner Trustee on the Notes), and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Agreement, of any
Related Document or of the Certificates (other than the signature and counter-
signature of
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the Owner Trustee on the Certificates) or the Notes (other than the signature or
counter-signature of the Owner Trustee on the Notes), or of any Contract or
related documents. The Owner Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created by
any Contract in any Financed Product or the maintenance of any such perfection
and priority of any security interest created by any Contract in any Financed
Product, or for or with respect to the sufficiency of the Trust Property or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Product; the
existence and enforceability of any insurance thereon; the existence and
contents of any Contract or any computer or other record thereof; the validity
of the assignment of any Contract to the Trust or of any intervening assignment;
the completeness of any Contract; the performance or enforcement of any
Contract; the compliance by the Seller or the Servicer with any warranty or
representation made under any Related Document or in any related document or the
accuracy of any such warranty or representation or any action of the Indenture
Trustee, the Custodian or the Servicer taken in the name of the Owner Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositors, the Seller, the
Indenture Trustee and the Servicer in banking or other transactions with the
same rights as it would have if it were not Owner Trustee.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between Green Tree and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by Green Tree
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; provided,
however, that the Owner Trustee shall only be entitled to reimbursement for
expenses hereunder to the extent such expenses (i) are fees of outside counsel
engaged by the Owner Trustee in respect of the performance of its obligations
hereunder or (ii) relate to the performance of its obligations pursuant to
Section 5.5 hereof.
SECTION 8.2. Indemnification. Green Tree shall be liable as primary
obligor for, and shall indemnify the Owner Trustee in its individual capacity
and its
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successors, assigns, agents and servants, and any co-trustee (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Related Documents, the Trust Property, the administration of the Trust Property
or the action or inaction of the Owner Trustee hereunder, except only that Green
Tree shall not be liable for or required to indemnify the Owner Trustee from and
against Expenses arising or resulting from any of the matters described in the
third sentence of Section 7.1. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement.
SECTION 8.3. Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Related Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that all
obligations of the Trust to the Owner Trustee individually or as Owner Trustee
for the Trust shall be recourse to the Trust Property only and specifically
shall not be recourse to the assets of any Owner.
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of the Trust.
(a) The respective obligations and responsibilities of the Depositor,
the General Partners and the Owner Trustee created by this Agreement and the
Trust created by this Agreement shall terminate upon the latest of (i) the
maturity or other liquidation of the last Contract (including the purchase as of
any Accounting Date by the Seller or the Servicer at its option of the corpus of
the Trust as described in Section 9.1 of the Sale and Servicing Agreement) and
the subsequent distribution of amounts in respect of such Contracts as provided
in the Related Documents, (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement, or (iii) at the time
provided in Section 9.2. In any case, there shall be delivered to the Owner
Trustee, the Indenture Trustee and the Rating Agencies an Opinion of Counsel
that all applicable preference periods under federal, state and local
bankruptcy, insolvency and similar laws have expired with respect to the
payments pursuant to clause (ii); provided, however, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living on the date of this
Agreement of Rose Kennedy of the Commonwealth of Massachusetts; and provided,
further, that the rights to indemnification under Section 8.2 shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner Trustee
of any prospective
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termination pursuant to this Section 9.1. Except as provided in Section 9.2,
the bankruptcy, liquidation, dissolution, termination, resignation, expulsion,
withdrawal, death or incapacity of any Owner, shall not (x) operate to terminate
this Agreement or the Trust, nor (y) entitle such Owner's legal representatives
or heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Property
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.1(a), neither the Depositor nor
any Certificate Owner shall be entitled to revoke or terminate the Trust.
(c) Within five Business Days of receipt of notice of final
distribution on the Certificates from the Seller or the Servicer given pursuant
to Section 9.1 of the Sale and Servicing Agreement, the Owner Trustee shall mail
written notice to the Certificateholders specifying (i) the Distribution Date
upon which final payment of the Certificates shall be made upon presentation and
surrender of Certificates at the office of the Paying Agent therein specified,
(ii) the amount of any such final payment, and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Paying Agent therein specified. The Owner Trustee shall give such notice to
the Certificate Registrar at the time such notice is given to
Certificateholders. In the event such notice is given, the Indenture Trustee
shall make deposits into the Certificate Distribution Account in accordance with
Section 4.6 of the Sale and Servicing Agreement, or, in the case of an optional
purchase of Contracts pursuant to Section 9.1 of the Sale and Servicing
Agreement, shall deposit the amount specified in Section 9.1 of the Sale and
Servicing Agreement. Upon presentation and surrender of the Certificates, the
Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 5.2.
(d) In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that remain
subject to this Agreement. Any funds which are payable to Certificateholders
remaining in the Trust after exhaustion of such remedies shall be distributed by
the Owner Trustee to The United Way (but only upon termination of this
Agreement), and the Certificateholders, by acceptance of their Certificates,
hereby waive any rights with respect to such funds.
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(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. Dissolution Events with respect to General Partners. In
the event that a Dissolution Event shall occur with respect to one but not both
General Partners, the Owner Trustee promptly upon obtaining knowledge of such
occurrence shall request an opinion of counsel from counsel acceptable to
__________________ to the effect that a failure to terminate the Trust upon the
occurrence of such Dissolution Event (and the transfer, if any, of the Class
B-GP Certificate held by the General Partner that has suffered such Dissolution
Event) will not cause the Trust to be treated as an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes.
In the event that (i) the Owner Trustee is unable to obtain such an opinion or
(ii) a Dissolution Event occurs with respect to both General Partners, the Trust
will terminate unless, in either event, within 90 days after the occurrence of
the Dissolution Event with respect to the General Partners (in the circumstance
of one General Partner having suffered a Dissolution Event), or within 90 days
after the occurrence of the later Dissolution Event (in the circumstance of both
General Partners having suffered Dissolution Events), (x) the remaining General
Partner (if any), the Holders of a majority of the Class B Certificate Balance
agree in writing to continue the business of the Trust and to the appointment of
a Person to hold one or more Class B-GP Certificates and to assume the
liabilities incident thereto and (y) the Owner Trustee requests and obtains the
opinion of counsel referred to above. Promptly after the occurrence of either
of the events referred to in clause (i) or clause (ii) of the preceding
sentence, (i) each General Partner shall give the Indenture Trustee and the
Owner Trustee written notice of the occurrence of such event, (ii) the Owner
Trustee shall, upon the receipt of such written notice, give prompt written
notice to the Certificateholders and the Indenture Trustee of the occurrence of
such event and (iii) the Indenture Trustee shall, upon receipt of written notice
of the occurrence of such event from the Owner Trustee or the Seller, give
prompt written notice to the Noteholders of the occurrence of such event;
provided, however, that any failure to give a notice required by this sentence
shall not prevent or delay, in any manner, a termination of the Trust pursuant
to the first sentence of this Section 9.2. Upon a termination pursuant to this
Section, the Owner Trustee shall direct the Indenture Trustee to sell the assets
of the Trust (other than the Trust Accounts) at one or more private or public
sales conducted in any manner permitted by law. The proceeds of such a sale of
the assets of the Trust shall be distributed as provided in Section 9.1(b) of
the Sale and Servicing Agreement.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) having (or having a parent which has) a rating of at least
Baa3 by Moody's or A-1 by Standard & Poor's. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the General Partners and the Servicer at
least 30 days before the date specified in such instrument. Upon receiving such
notice of resignation, the General Partners shall promptly appoint a successor
Owner Trustee meeting the qualifications set forth in Section 10.1 by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee and one copy to the successor Owner Trustee, provided
that the General Partners shall have received written confirmation from each of
the Rating Agencies that the proposed appointment will not result in an
[increased capital charge to the Security Insurer] by either of the Rating
Agencies. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the General Partners or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the General Partners may remove the Owner
Trustee. If the General Partners shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the General Partners shall
promptly appoint a successor Owner Trustee meeting the qualification
requirements of Section 10.1 by written instrument, in duplicate, one copy of
which instrument
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<PAGE>
shall be delivered to the outgoing Owner Trustee so removed and one copy to the
successor Owner Trustee and payment of all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until all fees and expenses, including any indemnity
payments, due to the outgoing Owner Trustee have been paid and until acceptance
of appointment by the successor Owner Trustee pursuant to Section 10.3. The
General Partners shall provide notice of such resignation or removal of the
Owner Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
General Partners and to its predecessor Owner Trustee an instrument accepting
such appointment under this Agreement, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties, and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
General Partners and the predecessor Owner Trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Owner Trustee all
such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, GGP I shall mail notice of the successor of such Owner Trustee
to all Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If GGP I shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of GGP I.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto,
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<PAGE>
anything herein to the contrary notwithstanding, and provided further that the
Owner Trustee shall mail notice of such merger or consolidation to the Rating
Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Property or any Financed Product may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Property, and to vest in such Person, in such capacity, such title to the
Trust, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the
Administrator and the Owner Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee shall have the power to
make such appointment. No co-trustee or separate trustee under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.1.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to
the Trust Property or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Administrator and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
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<PAGE>
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Amendment.
(a) This Agreement may be amended by the Depositor, the General
Partners and the Owner Trustee, without the consent of any of the Class B
Certificateholders or Noteholders, (i) to cure any ambiguity, or (ii) to
correct, supplement or modify any provisions in this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Certificateholder
or Noteholder.
(b) This Agreement may also be amended from time to time, by the
Depositor, the General Partners and the Owner Trustee with the consent of a
Certificate Majority of the Class B Certificates and, if such amendment
materially and adversely affects the interests of Noteholders, the consent of a
Note Majority (which consent of any Holder of a Certificate or Note given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holder and on all future Holders of such
Class B Certificate or Note and of any Class B Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Class B Certificate or Note) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Holders of Certificates or Notes;
-39-
<PAGE>
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Contracts or distributions that shall be required to be made on any
Certificate or Note or the Class B Pass-Through Rate, the Class A-1 Interest
Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4
Interest Rate, the Class A-5 Interest Rate or the Class A-6 Interest Rate or (b)
reduce the aforesaid percentage required to consent to any such amendment or any
waiver hereunder, without the consent of the Holders of all Certificates and
Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the
General Partners shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee unless
such parties have previously received such notification.
(e) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to Section 11.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders and Noteholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe, including the establishment of record dates.
(f) Prior to the execution of any amendment to this Agreement, the
Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent to the execution and delivery of
such amendment have been satisfied. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Seller, GGP I, GGP II, the Servicer, the Owner Trustee, the
Indenture Trustee or any Affiliate of any of the foregoing and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Certificates or the Related
Documents.
SECTION 11.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
the principles of conflicts of laws thereof and the obligations, rights and
remedies
-40-
<PAGE>
of the parties under this Agreement shall be determined in accordance with such
laws.
SECTION 11.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 11.5. Certificates Nonassessable and Fully Paid.
Certificateholders shall not, except as expressly provided for herein with
respect to the Class B-GP Certificateholders and the Class I-GP
Certificateholders, be personally liable for obligations of the Trust, the
fractional undivided interests in the Trust represented by the Certificates
shall be nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and Certificates upon execution thereof by the Owner Trustee
pursuant to Section 3.3 are and shall be deemed fully paid.
SECTION 11.6. Third-Party Beneficiaries. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder.
SECTION 11.7. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 11.8. Notices. All demands, notices and communications under
this Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the GGP I and GGP II or the Depositor, at the
following address: c/o Green Tree Financial Corporation, 1100 Landmark Towers,
345 St. Peter Street, St. Paul, Minnesota 55102-1639, Attention: Chief
Financial Officer, (b) in the case of the Owner Trustee, at the Corporate Trust
Office, and (c) in the case of each Rating Agency, 99 Church Street, New York,
New York 10007 (for Moody's) and 26 Broadway, New York, New York 10004 (for
Standard & Poor's) Attention: Asset-Backed Surveillance or at such other
address as shall be designated by any such party in a written notice to the
other parties. Notwithstanding the foregoing, any notice required or permitted
to be mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register, and
any notice so mailed within the time prescribed in this Agreement
-41-
<PAGE>
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
IN WITNESS WHEREOF, the Depositor, GGP I, GGP II and the Owner Trustee
have caused this Trust Agreement to be duly executed by their respective
officers as of the day and year first above written.
GREEN TREE FINANCIAL CORPORATION
By
--------------------------------------
Name:
Title:
GREEN TREE FIRST GP INC.
By
--------------------------------------
Name:
Title:
GREEN TREE SECOND GP INC.
By
--------------------------------------
Name:
Title:
----------------------------------------
By
--------------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST OF
GREEN TREE ASSET CONTRACTS TRUST, 199_-_
-------------------------------------- -
THIS Certificate of Trust of GREEN TREE ASSET CONTRACTS TRUST, 199_-_
(the "Trust"), dated as of ______________, 199_, is being duly executed and
filed by ___________________, a _____________ corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, (S) 3801 et
seq.).
1. Name. The name of the business trust formed hereby is GREEN TREE
ASSET CONTRACTS TRUST, 199_-_.
2. Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware is _______________________________,
Attention: Corporate Trust Administration.
3. This Certificate of Trust will be effective ______________, 199_.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
______________________, not in its individual capacity but solely as owner
trustee under a Trust Agreement dated as of ______________, 199_.
By___________________________________
Name:_____________________________
Title:____________________________
A-1
<PAGE>
EXHIBIT B-1
FORM OF CLASS B CERTIFICATE
GREEN TREE ASSET CONTRACTS TRUST, 199_-_
_______ ASSET-BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of retail installment sale
contracts and promissory notes secured by new and used consumer products
motorcycles; marine products (including boats, boat trailers and outboard
motors); pianos and organs; horse trailers; sport vehicles (including
snowmobiles, personal watercraft and all-terrain vehicles); trucks; personal
aircraft; and recreational vehicles and sold to the Trust by Green Tree
Financial Corporation.
(This Class B Certificate does not represent an obligation of, or an
interest in, Green Tree Financial Corporation or any affiliate thereof.)
Certificate No. Denomination: $
Initial Cutoff Date: Aggregate Denomination of all
______________, 199_ Class B Certificates: $_________
First Distribution Date: Pass-Through Rate: _____%
______________, 199_
Final Scheduled Distribution Date:
Servicer: ______________, 199_
Green Tree Financial Corporation
CUSIP: ___________
[Unless this Class B Certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation ("DTC") to the Owner
Trustee or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
B-1-1
<PAGE>
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-
mentioned Trust Agreement.
__________________________, __________________________,
not in its individual capacity but not in its individual capacity but
solely as Owner Trustee or solely as Owner Trustee
By _____________________________________,
Authenticating Agent
by________________________
by____________________________________________
THIS CERTIFIES THAT _____________________________________ is the
registered owner of a nonassessable, fully-paid, fractional undivided interest
in the Green Tree Asset Contracts Trust, 199_-_ (the "Trust"). The Trust was
created pursuant to a Trust Agreement, dated as of ______________, 199_ (the
"Trust Agreement"), among Green Tree Financial Corporation, Green Tree First GP
Inc., Green Tree Second GP Inc., and __________________________, not in its
individual capacity but solely as owner trustee (the "Owner Trustee"), a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement or the Sale and Servicing
Agreement, dated as of ______________, 199_ (the "Sale and Servicing
Agreement"), among the Trust, Green Tree Financial Corporation (the "Seller"),
in its individual capacity and as servicer (the "Servicer"), and
__________________________________, as backup servicer, as applicable.
This Certificate is one of the duly authorized Certificates designated
as " Asset-Backed Certificates, Class B" (herein called the "Certificates").
The Trust is also issuing ______% Asset-Backed Certificates, Class B-GP (the
"Class B-GP Certificates"). The Trust has also issued under the Indenture,
dated as of ______________, 199_, among the Trust and
_____________________________, as trustee, Notes designated as ______% Class A-1
Money Market Asset-Backed Notes (the "Class A-1 Notes"), ______% Class A-2
Asset-Backed Notes (the "Class A-2 Notes"), ______% Class A-3 Asset-Backed Notes
(the "Class A-3 ______% Notes"), ______% Class A-4 Asset-Backed Notes (the
"Class A-4 Notes"), ______% Class A-5 Asset-Backed Notes (the "Class A-5
Notes"), and ______% Class A-6 Asset-Backed Notes (the "Class A-6 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes, the "Notes"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The property
of the
B-1-2
<PAGE>
Trust includes (as more fully described in the Trust Agreement) a pool of retail
installment sale contracts and promissory notes for new and used motorcycles;
marine products (including boats, boat trailers and outboard motors); pianos and
organs; horse trailers; sport vehicles (including snowmobiles, personal
watercraft and all-terrain vehicles); trucks; personal aircraft; and
recreational vehicles (the "Contracts"), certain monies paid or due thereunder
after the Initial Cutoff Date, an assignment of the Seller's security interests
in the Financed Products, certain bank accounts, property (including the right
to receive Liquidation Proceeds) securing the Contracts and held by the Owner
Trustee, proceeds from certain insurance policies, certain rights of the
Depositor against Dealers with respect to the Contracts and proceeds of all of
the foregoing.
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on ________________, 199_ to
the person in whose name this Certificate is registered at the close of business
on the Business Day immediately preceding such Distribution Date (the "Record
Date"), such Certificateholder's fractional undivided interest in the sum of (a)
the Class B Interest Distributable Amount and (b) the Class B Principal
Distributable Amount to the extent of the funds available therefor.
It is the intent and agreement of the Depositor, the Class B-GP
Certificateholders,the Servicer and the Certificateholders that, for purposes of
Federal income, state and local income and franchise and any other income taxes,
the Trust will be treated as a partnership and the Certificateholders (including
the Class B-GP Certificateholders) will be treated as partners in that
partnership. The Class B-GP Certificateholders and the other Certificateholders
by acceptance of a Certificate, agree to treat, and to take no action
inconsistent with the treatment of, the Certificates for such tax purposes as
partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
either Class B-GP Certificateholder or join in any institution against either
Class B-GP Certificateholder of any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, the Trust Agreement or any
of the Related Documents.
Except as provided in the Trust Agreement, distributions on this
Certificate will be made by the Owner Trustee by check or money order mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose by
B-1-3
<PAGE>
the Owner Trustee. The Record Date otherwise applicable to distributions shall
not be applicable to such final distribution.
The Certificates do not represent an obligation of, or an interest in,
the Seller, the Servicer, the Owner Trustee or any Affiliate of any of them.
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Contracts, all as more specifically set forth in the
Trust Agreement. A copy of the Trust Agreement may, upon request, be examined
by any Certificateholder during normal business hours at the principal office of
the Seller and at such other places, if any, designated by the Seller.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Trust
Agreement at any time by the Depositor, the Class B-GP Certificateholders and
the Owner Trustee. In certain limited circumstances, the Trust Agreement may
only be amended with the consent of the Holders of Class B Certificates
evidencing not less than a majority of the Class B Certificate Balance and, in
certain circumstances, 100% of the Class B Certificate Balance. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and on all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon this Certificate.
As provided in the Trust Agreement and subject to certain limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Registrar upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in __________, Delaware accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate Registrar
duly executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest in the Trust of the
same class issued to the designated transferee. The initial Certificate
Registrar appointed under the Trust Agreement is __________________.
The Certificates may not be acquired by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
1 of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding
this Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Certificates
B-1-4
<PAGE>
are exchangeable for new Certificates of authorized denominations of a like
aggregate fractional undivided interest, as requested by the Holder surrendering
the same. No service charge will be made for any such registration of transfer
or exchange, but the Owner Trustee may require payment of a sum sufficient to
cover any tax or governmental charges payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and neither the Owner Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust Agreement
and Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the disposition of all property held as part of the Trust. The Servicer or the
Seller may at its option purchase the corpus of the Trust at a price specified
in the Sale and Servicing Agreement, and such purchase of the Contracts and
other property of the Trust will effect early retirement of the Certificates;
provided, however, such right of purchase is exercisable only as of a Record
Date as of which the Aggregate Principal Balance is less than 10% of the
Original Pool Balance. The Certificates are also subject to mandatory
prepayment, pro rata on the basis of the initial Class B Certificate Balance, on
the Distribution Date on or immediately following the last day of the Funding
Period in the event that any portion of the Pre-Funded Amount remains on deposit
in the Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any purchase of Subsequent Contracts on such date. The
aggregate principal amount of the Certificates to be prepaid will be an amount
equal to Class B Prepayment Amount. A limited recourse mandatory prepayment
premium will be payable by the Trust to Certificateholders if the Pre-Funded
Amount at the end of the Funding Period exceeds $100,000.
The recitals contained herein shall be taken as the statements of the
Depositor, the Class B-GP Certificateholders or the Servicer, as the case may
be, and the Owner Trustee assumes no responsibility for the correctness thereof.
The Owner Trustee makes no representations as to the validity or sufficiency of
this Certificate or of any Contract or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
B-1-5
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not
in its individual capacity has caused this Certificate to be duly executed.
Dated: _________, 199 GREEN TREE ASSET CONTRACTS ASSET TRUST, 199_-_
By:_________________________________________,
not in its individual capacity but solely as
Owner Trustee
By:_________________________________________
Name:____________________________________
Title:___________________________________
Attest:
______________________________
Name:_________________________
Title:________________________
GREEN TREE FINANCIAL CORPORATION
By:_______________________________________
Name:__________________________________
Title:_________________________________
B-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- -------------------------------------------------------------------------------
(Please print or typewrite name and address, including postal zip code, of
assignee)
- -------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
- -------------------------------------------------------------------------------
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
* ___________________________
Signature Guaranteed:
* ___________________________
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatsoever. Such signature must be
guaranteed by a member firm of The New York Stock Exchange, Inc. or a commercial
bank or trust company.
B-1-7
<PAGE>
EXHIBIT B-2
FORM OF CLASS B-GP CERTIFICATE
GREEN TREE ASSET CONTRACTS TRUST, 199_-_
_____% ASSET-BACKED CERTIFICATE, CLASS B-GP
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of retail installment
sale contracts and promissory notes secured by new and used consumer
products motorcycles; marine products (including boats, boat trailers
and outboard motors); pianos and organs; horse trailers; sport
vehicles (including snowmobiles, personal watercraft and all-terrain
vehicles); trucks; personal aircraft; and recreational vehicles and
sold to the Trust by Green Tree Financial Corporation.
(This Class B-GP Certificate does not represent an obligation of, or
an interest in, Green Tree Financial Corporation, or any affiliate
thereof.)
Certificate No. Denomination: $
Initial Cutoff Date: Aggregate Denomination of all
__________, 199_ Class B Certificates: $________
First Distribution Date: Pass-Through Rate: _____%
__________, 199_
Final Scheduled Distribution Date:
Servicer: __________, 199_
Green Tree Financial Corporation
CUSIP: ___________
THIS CLASS B-GP CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER
THE LIMITED CONDITIONS SPECIFIED IN THE TRUST AGREEMENT.
B-2-1
<PAGE>
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-GP Certificates referred to in the within-
mentioned Trust Agreement.
__________________________________ _________________________________________
not in its individual capacity but not in its individual capacity but solely
solely as Owner Trustee or as Owner Trustee
By _______________________,
Authenticating Agent
by________________________________
by_______________________________________
THIS CERTIFIES THAT _____________________________________ is the
registered owner of a nonassessable, fully-paid, fractional undivided interest
in the Green Tree Asset Contracts Trust, 199_-_ (the "Trust"). The Trust was
created pursuant to a Trust Agreement, dated as of ______________, 199_ (the
"Trust Agreement"), among Green Tree Financial Corporation, Green Tree First GP
Inc., Green Tree Second GP Inc., and ____________________________, not in its
individual capacity but solely as owner trustee (the "Owner Trustee"), a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement or the Sale and Servicing
Agreement, dated as of ______________, 199_ (the "Sale and Servicing
Agreement"), among the Trust, Green Tree Financial Corporation (the "Seller"),
in its individual capacity and as servicer (the "Servicer"), and
____________________________, as backup servicer, as applicable.
This Certificate is one of the duly authorized Certificates designated
as "______% Asset-Backed Certificates, Class B-GP" (herein called the
"Certificates"). The Trust is also issuing ______% Asset-Backed Certificates,
Class B (the "Class B Certificates"). The Trust has also issued under the
Indenture, dated as of ______________, 199_, among the Trust and
___________________________, as trustee, Notes designated as ______% Class A-1
Money Market Asset-Backed Notes (the "Class A-1 Notes"), ______% Class A-2
Asset-Backed Notes (the "Class A-2 Notes"), ______% Class A-3 Asset-Backed Notes
(the "Class A-3 Notes"), ______% Class A-4 Asset-Backed Notes (the "Class A-4
Notes"), ______% Class A-5 Asset-Backed Notes (the "Class A-5 Notes"), and
______% Class A-6 Asset-Backed Notes (the "Class A-6 Notes" and, together with
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4
Notes and the Class A-5 Notes, the "Notes"). This Certificate is issued under
and is subject to the terms, provisions and conditions of the Trust Agreement,
to which Trust Agreement the holder of this Certificate by virtue of the
acceptance hereof assents and by which such holder is bound. The property of
the Trust includes (as more fully described in the Trust Agreement) a pool of
retail installment sale contracts and promissory notes for new and used
motorcycles; marine products (including boats, boat trailers and outboard
motors); pianos and
B-2-2
<PAGE>
organs; horse trailers; sport vehicles (including snowmobiles, personal
watercraft and all-terrain vehicles); trucks; personal aircraft; and
recreational vehicles (the "Contracts"), certain monies paid or due thereunder
after the Initial Cutoff Date, an assignment of the Sellers security interests
in the Financed Products, certain bank accounts, property (including the right
to receive Liquidation Proceeds) securing the Contracts and held by the Owner
Trustee, proceeds from certain insurance policies, certain rights of the
Depositor against Dealers with respect to the Contracts and proceeds of all of
the foregoing.
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on ____________, 199_, to the
person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding such Distribution Date (the "Record
Date"), such Certificateholder's fractional undivided interest in the sum of (a)
the Class B Interest Distributable Amount and (b) the Class B Principal
Distributable Amount to the extent of the funds available therefor.
It is the intent and agreement of the Depositor, the Class B-GP
Certificateholders, the Servicer and the Certificateholders that, for purposes
of Federal income, state and local income and franchise and any other income
taxes, the Trust will be treated as a partnership and the Certificateholders
(including the Class B-GP Certificateholders) will be treated as partners in
that partnership. The Class B-GP Certificateholders and the other
Certificateholders by acceptance of a Certificate, agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
either Class B-GP Certificateholder or join in any institution against either
Class B-GP Certificateholder of any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, the Trust Agreement or any
of the Related Documents.
Except as provided in the Trust Agreement, distributions on this
Certificate will be made by the Owner Trustee by check or money order mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Owner Trustee. The Record Date otherwise
applicable to distributions shall not be applicable to such final distribution.
B-2-3
<PAGE>
The Certificates do not represent an obligation of, or an interest in,
the Seller, the Servicer, the Owner Trustee or any Affiliate of any of them.
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Contracts, all as more specifically set forth in the
Trust Agreement. A copy of the Trust Agreement may, upon request, be examined
by any Certificateholder during normal business hours at the principal office of
the Seller and at such other places, if any, designated by the Seller.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Trust
Agreement at any time by the Depositor, the Class B-GP Certificateholders and
the Owner Trustee. In certain limited circumstances, the Trust Agreement may
only be amended with the consent of the Holders of Class B Certificates
evidencing not less than a majority of the Class B Certificate Balance and, in
certain circumstances, 100% of the Certificate Balance. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and on
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate.
As provided in the Trust Agreement, this Certificate is non-
transferable and any attempt to transfer this Certificate shall be void.
The Certificates may not be acquired by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
1 of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding
this Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
The Certificates are issuable only as registered Certificates without
coupons. As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of
authorized denominations of a like aggregate fractional undivided interest, as
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Owner Trustee may
require payment of a sum sufficient to cover any tax or governmental charges
payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
this Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and neither the Owner Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
B-2-4
<PAGE>
The obligations and responsibilities created by the Trust Agreement
and Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the disposition of all property held as part of the Trust. The Servicer or the
Seller may at its option purchase the corpus of the Trust at a price specified
in the Sale and Servicing Agreement, and such purchase of the Contracts and
other property of the Trust will effect early retirement of the Certificates;
provided, however, such right of purchase is exercisable only as of a Record
Date as of which the Aggregate Principal Balance is less than 10% of the
Original Pool Balance and in no event before the Notional Balance of the Class I
Certificates is reduced to zero. The Certificates are also subject to mandatory
prepayment, pro rata on the basis of the initial Class B Certificate Balance, on
the Distribution Date on or immediately following the last day of the Funding
Period in the event that any portion of the Pre-Funded Amount remains on deposit
in the Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any purchase of Subsequent Contracts on such date. The
aggregate principal amount of the Certificates to be prepaid will be an amount
equal to the Class B Prepayment Amount. A limited recourse mandatory prepayment
premium will be payable by the Trust to Certificateholders if the Pre-Funded
Amount at the end of the Funding Period exceeds $100,000.
The recitals contained herein shall be taken as the statements of the
Depositor, the Class B-GP Certificateholders or the Servicer, as the case may
be, and the Owner Trustee assumes no responsibility for the correctness thereof.
The Owner Trustee makes no representations as to the validity or sufficiency of
this Certificate or of any Contract or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
B-2-5
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not
in its individual capacity has caused this Certificate to be duly executed.
Dated: _________, 199 GREEN TREE ASSET CONTRACTS ASSET TRUST, 199_-_
By:____________________________________________
not in its individual capacity but solely as
Owner Trustee
By:____________________________________________
Name:_______________________________________
Title:______________________________________
Attest:
_____________________________
Name:________________________
Title:_______________________
GREEN TREE FINANCIAL CORPORATION
By:____________________________________________
Name:_______________________________________
Title:______________________________________
B-2-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________________________
(Please print or typewrite name and address, including postal zip code, of
assignee)
_______________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________________
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
* ___________________________
Signature Guaranteed:
* ___________________________
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatsoever. Such signature must be
guaranteed by a member firm of The New York Stock Exchange, Inc. or a commercial
bank or trust company.
B-2-7
<PAGE>
EXHIBIT C
FORM OF DEPOSITORY AGREEMENT
----------------------------
C-1
<PAGE>
EXHIBIT 4.4
================================================================================
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
_____% Class A-1 Asset Contracts-Backed Notes
_____% Class A-2 Asset Contracts-Backed Notes
_____% Class A-3 Asset Contracts-Backed Notes
_____% Class A-4 Asset Contracts-Backed Notes
_____% Class A-5 Asset Contracts-Backed Notes
_____% Class A-6 Asset Contracts-Backed Notes
-------------------
INDENTURE
Dated as of _____________, 199_
-------------------
--------------------------------------------
Trustee and Indenture Collateral Agent
================================================================================
<PAGE>
<TABLE>
<CAPTION>
CROSS REFERENCE TABLE
TIA Indenture
Section Section
- ----------- -----------
<S> <C>
310(a)(1)........................................... 6.11
(a)(2)........................................... 6.11
(a)(3)........................................... 6.10
(a)(4)........................................... N.A./2/
(a)(5)........................................... 6.11
(b).............................................. 6.08; 6.11
(c).............................................. N.A.
311(a).............................................. 6.12
(b).............................................. 6.12
(c).............................................. N.A.
312(a).............................................. 7.01
(b).............................................. 7.02
(c).............................................. 7.02
313(a).............................................. 7.04
(b)(1)........................................... 7.04
(b)(2)........................................... 7.04
(c).............................................. 11.05
(d).............................................. 7.04
314(a).............................................. 7.03
(b).............................................. 3.06; 11.15
(c)(1)........................................... 11.01
(c)(2)........................................... 11.01
(c)(3)........................................... 11.01
(d).............................................. 11.01
(e).............................................. 11.01
(f).............................................. 11.01
315(a).............................................. 6.01
(b).............................................. 6.05; 11.05
(c).............................................. 6.01
(d).............................................. 6.01
(e).............................................. 5.14
316(a)(last sentence)............................... 1.01
(a)(1)(A)........................................ 5.12
(a)(1)(B)........................................ 5.13
(a)(2)........................................... N.A.
(b).............................................. 5.08
(c).............................................. N.A.
317(a)(1)........................................... 5.03
(a)(2)........................................... 5.03
(b).............................................. 3.03
318(a).............................................. 11.07
</TABLE>
- ---------------
1 Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
2 N.A. means Not Applicable.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.................... 2
SECTION 1.01. Definitions............................................ 2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act...... 12
SECTION 1.03. Rules of Construction.................................. 12
ARTICLE II THE NOTES....................................................... 13
SECTION 2.01. Form................................................... 13
SECTION 2.02. Execution, Authentication and Delivery................. 13
SECTION 2.03. Temporary Notes........................................ 14
SECTION 2.04. Registration; Registration of Transfer and Exchange.... 14
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes............. 16
SECTION 2.06. Person Deemed Owner.................................... 16
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.. 17
SECTION 2.08. Cancellation........................................... 18
SECTION 2.09. Book-Entry Notes....................................... 18
SECTION 2.10. Notices to Depository.................................. 19
SECTION 2.11. Definitive Notes....................................... 19
ARTICLE III COVENANTS....................................................... 19
SECTION 3.01. Payment of Principal, Interest and Premium............. 19
SECTION 3.02. Maintenance of Office or Agency........................ 20
SECTION 3.03. Money for Payments To Be Held in Trust................. 20
SECTION 3.04. Existence.............................................. 21
SECTION 3.05. Protection of Trust Estate............................. 22
SECTION 3.06. Opinions as to Trust Estate............................ 22
SECTION 3.07. Performance of Obligations; Servicing of Contracts..... 23
SECTION 3.08. Negative Covenants..................................... 24
SECTION 3.09. Annual Statement as to Compliance...................... 25
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms..... 25
SECTION 3.11. Successor or Transferee................................ 27
SECTION 3.12. No Other Business...................................... 28
SECTION 3.13. No Borrowing........................................... 28
SECTION 3.14. Servicer's Obligations................................. 28
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities...... 28
SECTION 3.16. Capital Expenditures................................... 28
SECTION 3.17. Restricted Payments.................................... 28
SECTION 3.18. Notice of Events of Default............................ 29
SECTION 3.19. Further Instruments and Acts........................... 29
SECTION 3.20. Compliance with Laws................................... 29
SECTION 3.21. Amendments of Sale and Servicing Agreement and
Trust Agreement........................................ 29
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 3.22. Removal of Administrator............................... 29
SECTION 3.23. Income Tax Characterization............................ 29
ARTICLE IV SATISFACTION AND DISCHARGE.................................... 29
SECTION 4.01. Satisfaction and Discharge of Indenture................ 29
SECTION 4.02. Application of Trust Money............................. 31
SECTION 4.03. Repayment of Moneys Held by Paying Agent............... 31
SECTION 4.04. Release of Trust Estate................................ 31
ARTICLE V REMEDIES...................................................... 31
SECTION 5.01. Events of Default...................................... 31
SECTION 5.02. Rights upon Event of Default........................... 33
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee; Authority of Trustee....................... 33
SECTION 5.04. Remedies............................................... 35
SECTION 5.05. Optional Preservation of the Contracts................. 36
SECTION 5.06. Priorities............................................. 36
SECTION 5.07. Limitation of Suits.................................... 37
SECTION 5.08. Unconditional Rights of Noteholders To Receive
Principal and Interest................................. 38
SECTION 5.09. Restoration of Rights and Remedies..................... 38
SECTION 5.10. Rights and Remedies Cumulative......................... 38
SECTION 5.11. Delay or Omission Not a Waiver......................... 38
SECTION 5.12. Control by Noteholders................................. 39
SECTION 5.13. Waiver of Past Defaults................................ 39
SECTION 5.14. Undertaking for Costs.................................. 39
SECTION 5.15. Waiver of Stay or Extension Laws....................... 40
SECTION 5.16. Action on Notes........................................ 40
SECTION 5.17. Performance and Enforcement of Certain Obligations..... 40
ARTICLE VI THE TRUSTEE AND THE TRUSTEE................................... 41
SECTION 6.01. Duties of Trustee...................................... 41
SECTION 6.02. Rights of Trustee...................................... 43
SECTION 6.03. Individual Rights of Trustee........................... 44
SECTION 6.04. Trustee's Disclaimer................................... 44
SECTION 6.05. Notice of Defaults..................................... 44
SECTION 6.06. Reports by Trustee to Holders.......................... 44
SECTION 6.07. Compensation and Indemnity............................. 44
SECTION 6.08. Replacement of Trustee................................. 45
SECTION 6.09. Successor Trustee by Merger............................ 47
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.......... 47
SECTION 6.11. Eligibility; Disqualification.......................... 48
SECTION 6.12. Preferential Collection of Claims Against Issuer....... 48
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS................................ 49
SECTION 7.01. Issuer To Furnish Trustee Names and Addresses to
Noteholders............................................ 49
SECTION 7.02. Preservation of Information; Communications to
Noteholders............................................ 49
SECTION 7.03. Reports by Issuer...................................... 49
SECTION 7.04. Reports by Trustee..................................... 50
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.......................... 50
SECTION 8.01. Collection of Money.................................... 50
SECTION 8.02. Trust Accounts......................................... 50
SECTION 8.03. General Provisions Regarding Accounts.................. 52
ARTICLE IX SUPPLEMENTAL INDENTURES....................................... 52
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders............................................ 52
SECTION 9.02. Supplemental Indentures With Consent of
Noteholders............................................ 53
SECTION 9.03. Execution of Supplemental Indentures................... 55
SECTION 9.04. Effect of Supplemental Indenture....................... 55
SECTION 9.05. Conformity With Trust Indenture Act.................... 56
SECTION 9.06. Reference in Notes to Supplemental Indentures.......... 56
ARTICLE X REDEMPTION OF NOTES........................................... 56
SECTION 10.01. Redemption............................................. 56
SECTION 10.02. Form of Redemption Notice.............................. 57
SECTION 10.03. Notes Payable on Redemption Date....................... 58
ARTICLE XI MISCELLANEOUS................................................. 58
SECTION 11.01. Compliance Certificates and Opinions, etc.............. 58
SECTION 11.02. Form of Documents Delivered to Trustee................. 60
SECTION 11.03. Acts of Noteholders.................................... 61
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies.. 61
SECTION 11.05. Notices to Noteholders; Waiver......................... 62
SECTION 11.06. Alternate Payment and Notice Provisions................ 63
SECTION 11.07. Conflict with Trust Indenture Act...................... 63
SECTION 11.08. Effect of Headings and Table of Contents............... 63
SECTION 11.09. Successors and Assigns................................. 63
SECTION 11.10. Severability........................................... 63
SECTION 11.11. Benefits of Indenture.................................. 63
SECTION 11.12. Legal Holidays......................................... 64
SECTION 11.13. Governing Law.......................................... 64
SECTION 11.14. Counterparts........................................... 64
SECTION 11.15. Recording of Indenture................................. 64
SECTION 11.16. Trust Obligation....................................... 64
SECTION 11.17. No Petition............................................ 64
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 11.18. Inspection............................................. 65
SECTION 11.19. Limitation of Liability................................ 65
Testimonium, Signatures and Seals........................................... 66
</TABLE>
Exhibit A Schedule of Contracts
Exhibit B Form of Depository Agreement
Exhibit C-1 Form of Class A-1 Note
Exhibit C-2 Form of Class A-2 Note
Exhibit C-3 Form of Class A-3 Note
Exhibit C-4 Form of Class A-4 Note
Exhibit C-5 Form of Class A-5 Note
Exhibit C-6 Form of Class A-6 Note
Exhibit D Form of Note Policy
Exhibit E Letter Agreement Between the Seller and the Trustee and Other Fee
Letters
-iv-
<PAGE>
INDENTURE, dated as of ____________, 199_, between GREEN TREE ASSET
RECEIVABLES TRUST, 199_-_, a Delaware business trust (the "Issuer"), and
___________________________, a ___________________, in its capacities as trustee
(the "Trustee") and as Indenture Collateral Agent (as defined below) and not in
its individual capacity.
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Issuer's ______% Class
A-1 Asset Contracts-Backed Notes (the "Class A-1 Notes"), ______% Class A-2
______% Asset Contracts-Backed Notes (the "Class A-2 Notes"), ______% Class A-3
Asset ______% Contracts-Backed Notes (the "Class A-3 Notes"), ______% Class A-4
Asset Contracts-Backed Notes (the "Class A-4 Notes"), ______% Class A-5 Asset
Contracts-Backed Notes (the "Class A-5 Notes"), and ______% Class A-6 Asset
Contracts-Backed Notes (the "Class A-6 Notes"), (the Class A-1 Notes, together
with the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-
5 Notes and the Class A-6 Notes, the "Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Indenture Collateral (as defined below) as collateral to the Indenture
Collateral Agent for the benefit of the Trustee on behalf of the Noteholders.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee at the Closing Date, on behalf
of and for the benefit of the Noteholders to secure the performance of the
Secured Obligations, all of the Issuer's right, title and interest in and to (a)
the Initial Contracts and all moneys paid or payable thereon or in respect
thereof after the Initial Cutoff Date (including amounts due on or before the
Initial Cutoff Date but received by the Seller or the Issuer after the Initial
Cutoff Date); (b) the Subsequent Contracts and all moneys paid or payable
thereon or in respect thereof after the related Subsequent Cutoff Date
(including amounts due on or before the related Subsequent Cutoff Date but
received by the Seller or the Issuer after the related Subsequent Cutoff Date);
(c) an assignment of the security interests of the Seller in the Financed
Products; (d) the Insurance Policies and any proceeds from any Insurance
Policies relating to the Contracts, the Obligors or the Financed Products,
including rebates of premiums, all Collateral Insurance and any Force-Placed
Insurance relating to the Contracts; (e) an assignment of the rights of the
Seller against Dealers with respect to the Contracts under the Dealer Agreements
and the Dealer Assignments, (f) all items contained in the Contract Files and
any and all other documents that the Seller keeps on file in accordance with its
customary procedures relating to the Contracts, the Obligors or the Financed
Products, (g) any property (including the right to receive future Liquidation
Proceeds) that secures a Contract and that has been acquired by or on behalf of
the Trust pursuant to liquidation of such Contract, (h) the Trust Accounts and
all funds on deposit therein from time to time (other than the Certificate
Distribution Account and the Class I
<PAGE>
Holdback Amount on deposit from time to time in the Pre-Funding Account), and
all investments and proceeds thereof (including all income thereon), (i) the
Sale and Servicing Agreement and each Subsequent Transfer Agreement (including
all rights of the Seller under the Purchase Agreement and each Subsequent
Purchase Agreement assigned to the Issuer pursuant to the Sale and Servicing
Agreement), and (j) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts Contract, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and Contracts, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Indenture Collateral").
The Trustee, for the benefit of the Holders of the Notes acknowledges
such Grant. The Trustee on behalf of the Holders of the Notes accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth
below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
-2-
<PAGE>
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).
"Book-Entry Note" means any Note registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than a Saturday, Sunday, legal
holiday or other day on which commercial banking institutions in Minneapolis,
Minnesota, New York, New York, Wilmington, Delaware or any other location of any
successor Servicer, successor Owner Trustee or successor Trustee are authorized
or obligated by law, executive order or governmental decree to remain closed.
"Certificate of Trust" means the Certificate of Trust of the Issuer
substantially in the form of Exhibit A to the Trust Agreement.
"Certificateholder" has the meaning specified therefor in the Trust
Agreement.
"Class A-1 Interest Rate" means ______% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-2 Interest Rate" means ______% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-3 Interest Rate" means the ______% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-4 Interest Rate" means the ______% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-5 Interest Rate" means the ______% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-6 Interest Rate" means the ______% per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-1 Notes" means the ______% Class A-1 Asset Contracts-Backed
Notes substantially in the form of Exhibit C-1.
"Class A-2 Notes" means the ______% Class A-2 Asset Contracts-Backed
Notes substantially in the form of Exhibit C-2.
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"Class A-3 Notes" means the ______% Class A-3 Asset Contracts-Backed
Notes substantially in the form of Exhibit C-3.
"Class A-4 Notes" means the ______% Class A-4 Asset Contracts-Backed
Notes substantially in the form of Exhibit C-4.
"Class A-5 Notes" means the ______% Class A-5 Asset Contracts-Backed
Notes substantially in the form of Exhibit C-5.
"Class A-6 Notes" means the ______% Class A-6 Asset Contracts-Backed
Notes substantially in the form of Exhibit C-6.
"Closing Date" means ____________, 199_.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at date of the execution of this Agreement is located at
________________, Attention: Corporate Trust Department; or at such other
address as the Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Trustee (the address of which the successor Trustee will notify the
Noteholders and the Issuer).
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.09.
"Depository" means the initial Depository, The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of
$__________ in aggregate principal amount of the Class A-1 Notes, $__________ in
aggregate principal amount of the Class A-2 Notes, $__________ in aggregate
principal amount of the Class A-3 Notes, $__________ in aggregate principal
amount of the Class A-4 Notes, $__________ in aggregate principal amount of the
Class A-5 Notes and $__________ in aggregate principal amount of the Class A-6
Notes as of the Closing Date, and any permitted successor depository. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(3) of the Uniform Commercial Code of the State of New York.
"Depository Agreement" means the agreement among the Issuer, the
Trustee and The Depository Trust Company, as the initial Depository, dated as of
the Closing Date, relating to the Notes substantially in the form of Exhibit B.
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"Depository Participant" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, any Responsible Officer, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"Final Scheduled Maturity Date" means ____________, 199_.
"General Partner" means each Certificateholder obligated to pay the
expenses of the Issuer pursuant to Section 2.7 of the Trust Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Indenture Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Indenture Collateral and all
other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise and
generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising
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under acceptance facilities; (f) obligations of such Person under any
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (g) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Indenture Collateral" has the meaning specified in the Granting
Clause of this Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the
Class A-5 Interest Rate or the Class A-6 Interest Rate, as applicable.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Trustee.
"Letter Agreement" has the meaning specified in Section 6.07.
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"Note" means a Class A-1 Note, Class A-2 Note, Class A-3 Note, Class
A-4 Note, Class A-5 Note or Class A-6 Note, as applicable.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the
Depository, or on the books of a Person maintaining an account with such
Depository (directly as a Depository participant or as an indirect participant,
in each case in accordance with the rules of such Depository) and with respect
to any Definitive Notes, the Holder.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Officers' Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to,
the Trustee. Unless otherwise specified, any reference in this Indenture to an
Officers' Certificate shall be to an Officers' Certificate of any Authorized
Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer and who shall be satisfactory to the Trustee and which
shall comply with any applicable requirements of Section 11.01, and shall be in
form and substance satisfactory to the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor, satisfactory
to the Trustee, has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Notes are held by a
bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
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direction, notice, consent or waiver hereunder or under any Related Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that the Trustee knows to be so owned
shall be so disregarded. Notes so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or class of Notes, as applicable, Outstanding at the date of
determination.
"Owner Trustee" means _______________________________, not in its
individual capacity but solely as Owner Trustee under the Trust Agreement, or
any successor trustee under the Trust Agreement.
"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the distributions from the Note Distribution
Account, including payment of principal of or interest on the Notes on behalf of
the Issuer.
"Payment Date" means a Distribution Date.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency" means each of Moody's and Standard & Poor's, so long
as such Persons maintain a rating on the Notes; and if either Moody's or
Standard & Poor's no longer maintains a rating on the Notes, such other
nationally recognized statistical rating organization selected by the Seller.
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<PAGE>
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer, the
Trustee, the Owner Trustee and the Issuer in writing that such action will not
result in a reduction or withdrawal of the then current rating of the Notes.
"Record Date" means, with respect to a Payment Date or Redemption
Date, the close of business on the last Business Day immediately preceding such
Payment Date or Redemption Date.
"Redemption Date" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a) or a payment to Noteholders pursuant to Section
10.01(c), the Payment Date specified by the Servicer or the Issuer pursuant to
Section 10.01(a) or 10.01(c), as applicable, or (b) in the case of a redemption
of Notes pursuant to Section 10.01(b), the Payment Date on or immediately
following the last day of the Funding Period.
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a), an amount equal to the principal amount of the
Notes redeemed plus accrued and unpaid interest on the principal amount of each
class of Notes at the respective Interest Rate for each such class of Notes
being so redeemed to but excluding the Redemption Date, or (b) in the case of a
payment made to Noteholders pursuant to Section 10.01(c), the amount on deposit
in the Note Distribution Account, but not in excess of the amount specified in
clause (a) above.
"Registered Holder" means the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Related Documents" means the Trust Agreement, the Certificates, the
Notes, the Sale and Servicing Agreement, each Subsequent Transfer Agreement, the
Administration Agreement, the Custodian Agreement, the Lockbox Agreement, the
Depository Agreements and the Underwriting Agreement between the Seller and the
underwriters of the Certificates and the Notes. The Related Documents executed
by any party are referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.
"Responsible Officer" means, with respect to the Trustee, any officer
of the Trustee assigned by the Trustee to administer its corporate trust affairs
relating to the Trust Estate.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of ____________, 199_, among the Issuer, the Seller, the Servicer and
the Backup Servicer.
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"Schedule of Contracts" means the listing of the Contracts set forth
in Exhibit A, as supplemented on each Subsequent Transfer Date to reflect the
sale to the Issuer of Subsequent Contracts.
"Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to or on behalf of the Trustee for the benefit of the
Noteholders under this Indenture or the Notes.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Termination Date" means the date on which the Trustee shall have
received payment and performance of all Secured Obligations.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the Noteholders (including, without
limitation, the Indenture Collateral Granted to the Trustee), including all
proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"Trustee" means ___________________________________, a
______________________, as Trustee under this Indenture, or any successor
Trustee under this Indenture.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
(b) Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth in
the Sale and Servicing Agreement as in effect on the Closing Date for all
purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms:
<TABLE>
<CAPTION>
Section of Sale and
Term Servicing Agreement
- ---- -------------------
<S> <C>
Aggregate Principal Balance.................. Section 1.1
APR.......................................... Section 1.1
Available Funds.............................. Section 1.1
Backup Servicer.............................. Section 1.1
Class A-1 Final Scheduled Distribution Date.. Section 1.1
Class A-1 Holdback Amount.................... Section 1.1
Class A-1 Holdback Subaccount................ Section 1.1
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Class A-1 Prepayment Amount.................. Section 1.1
Class A-1 Prepayment Premium................. Section 1.1
Class A-2 Prepayment Amount.................. Section 1.1
Class A-2 Final Scheduled Distribution Date.. Section 1.1
Class A-2 Prepayment Premium................. Section 1.1
Class A-3 Final Scheduled Distribution Date.. Section 1.1
Class A-3 Prepayment Amount.................. Section 1.1
Class A-3 Prepayment Premium................. Section 1.1
Class A-4 Final Scheduled Distribution Date.. Section 1.1
Class A-4 Prepayment Amount.................. Section 1.1
Class A-4 Prepayment Premium................. Section 1.1
Class A-5 Final Scheduled Distribution Date.. Section 1.1
Class A-5 Prepayment Amount.................. Section 1.1
Class A-5 Prepayment Premium................. Section 1.1
Class A-6 Final Scheduled Distribution Date.. Section 1.1
Class A-6 Prepayment Amount.................. Section 1.1
Class A-6 Prepayment Premium................. Section 1.1
Collateral Insurance......................... Section 1.1
Collection Account........................... Section 1.1
Custodian.................................... Section 1.1
Dealer....................................... Section 1.1
Dealer Agreement............................. Section 1.1
Dealer Assignment............................ Section 1.1
Distribution Date............................ Section 1.1
Draw Date.................................... Section 1.1
Eligible Account............................. Section 1.1
Eligible Investments......................... Section 1.1
Financed Product............................. Section 1.1
Forced-Placed Insurance...................... Section 1.1
Funding Period............................... Section 1.1
Initial Contracts............................ Section 1.1
Liquidation Proceeds......................... Section 1.1
Monthly Period............................... Section 1.1
Moody's...................................... Section 1.1
Note Distribution Account.................... Section 1.1
Note Majority................................ Section 1.1
Noteholders' Interest Distributable Amount... Section 1.1
Noteholders' Percentage...................... Section 1.1
Noteholders' Principal Distributable Amount.. Section 1.1
Obligor...................................... Section 1.1
Pre-Funded Amount............................ Section 1.1
Pre-Funding Account.......................... Section 4.1
Purchased Contract........................... Section 1.1
Contract..................................... Section 1.1
Reserve Account.............................. Section 1.1
Seller....................................... Section 1.1
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Servicer..................................... Section 1.1
Servicer Termination Event................... Section 1.1
Standard & Poor's............................ Section 1.1
Subsequent Contracts......................... Section 1.1
Subsequent Transfer Date..................... Section 1.1
Trust Accounts............................... Section 1.1
Trust Agreement.............................. Section 1.1
</TABLE>
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless otherwise specified:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
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(vi) references to Sections, Subsections, Schedules and Exhibits
shall refer to such portions of this Indenture.
ARTICLE II
THE NOTES
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes and the Class A-6
Notes, in each case together with the Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits C-1, C-2, C-3, C-4, C-
5 and C-6, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits C-1, C-2, C-3, C-4, C-5 and C-6 are part of the
terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Trustee shall upon receipt of an Issuer Order authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of
$__________, Class A-2 Notes in an aggregate principal amount of
$__________, Class A-3 Notes in an aggregate principal amount of $__________,
Class A-4 Notes in an aggregate principal amount of $__________, Class A-5 Notes
in an aggregate principal amount of $__________ and Class A-6 Notes in an
aggregate principal amount of
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$__________. The aggregate principal amount of Class A-1 Notes, the Class A-2
Notes the Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes and the
Class A-6 Notes outstanding at any time may not exceed that amount except as
provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Trustee shall be "Note Registrar" for the purpose of registering
Notes and transfers of Notes as herein provided. Upon any resignation of any
Note Registrar, the Issuer shall promptly appoint a successor or, if it elects
not to make such an appointment, assume the duties of Note Registrar.
If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment
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of such Note Registrar and of the location, and any change in the location, of
the Note Register, and the Trustee shall have the right to inspect the Note
Register at all reasonable times and to obtain copies thereof, and the Trustee
shall have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Trustee shall authenticate and the Noteholder shall
obtain from the Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations, of a like
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and the Noteholder shall obtain from the Trustee, the Notes
which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in The City of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
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SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee and such security or indemnity as may be
required by them to hold the Issuer and the Trustee harmless, then, in the
absence of notice to the Issuer, the Note Registrar or the Trustee that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note; provided, however, that if any such destroyed, lost or stolen Note, but
not a mutilated Note, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable or upon the Redemption Date without surrender thereof. If, after
the delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of
the original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer or the Trustee may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Person Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving
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payments of principal of and interest, if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected
by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note, the
Class A-5 Note and the Class A-6 Note set forth in Exhibits C-1, C-2, C-3, C-4,
C-5 and C-6, respectively, and such interest shall be payable on each Payment
Date as specified therein, subject to Section 3.01. Any installment of interest
or principal, if any, payable on any Note which is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the Record Date, by check mailed first-class, postage prepaid to such
Person's address as it appears on the Note Register on such Record Date, except
that, unless Definitive Notes have been issued pursuant to Section 2.11, with
respect to Notes registered on the Record Date in the name of the nominee of the
Depository, payment will be made by wire transfer in immediately available funds
to the account designated by such nominee and except for (i) the final
installment of principal payable with respect to such Note on a Payment Date and
(ii) the Redemption Price for any Note called for redemption pursuant to Section
10.01(a), which shall be payable as provided below. The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Class A-1 Note, the Class A-2
Note the Class A-3 Note, the Class A-4 Note, the Class A-5 Note and the Class A-
6 Note set forth in Exhibits C-1, C-2, C-3, C-4, C-5 and C-6, respectively.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing and the Trustee or a Note
Majority have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02. All principal payments on a class of Notes shall be
made pro rata to the Noteholders of such Class entitled thereto. The Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed no later than five days prior to such
final Payment Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02.
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SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by the Trustee. The Issuer may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Notes may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it, provided
that such Issuer Order is timely and the Notes have not been previously disposed
of by the Trustee.
SECTION 2.09. Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of a typewritten Note or Notes representing the Book-
Entry Notes, to be delivered to The Depository Trust Company, the initial
Depository, by, or on behalf of, the Issuer. Each such Note shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Depository, and no Note Owner will receive a Definitive Note
representing such Note Owner's interest in such Note, except as provided in
Section 2.11. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.11:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Trustee shall be entitled to deal
with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes, and
shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Depository and shall be limited to those established by law and agreements
between such Note Owners and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until
Definitive Notes are issued pursuant to Section 2.11, the initial
Depository will make book-entry transfers among the Depository Participants
and receive and transmit payments of principal of and interest on the Notes
to such Depository Participants; and
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(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the Outstanding Amount of the Notes, the
Depository shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Note Owners and/or
Depository Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has delivered such
instructions to the Trustee.
SECTION 2.10. Notices to Depository. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.11, the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Depository and shall have no
obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Administrator advises the
Trustee in writing that the Depository is no longer willing or able properly to
discharge its responsibilities with respect to the Notes, and the Administrator
is unable to locate a qualified successor, (ii) the Administrator at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of an Event of Default, a
Note Majority advises the Depository in writing that the continuation of a book-
entry system through the Depository is no longer in the best interests of the
Note Owners, then the Depository shall notify all Note Owners and the Trustee of
the occurrence of any such event and of the availability of Definitive Notes to
Note Owners requesting the same. Upon surrender to the Trustee of the Note or
Notes representing the Book-Entry Notes by the Depository, accompanied by
registration instructions, the Issuer shall execute and the Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Trustee shall recognize the Holders of the Definitive
Notes as Noteholders.
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Interest and Premium. The Issuer
will duly and punctually pay the principal, interest and premium, if any, on the
Notes in accordance with the terms of the Notes and this Indenture. Without
limiting the foregoing, the Issuer will cause to be distributed all amounts on
deposit in the Note Distribution Account on a Payment Date in accordance with
Section 8.02(b). Amounts properly withheld under the Code by any Person from a
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payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
maintain in ___________________________________, an office or agency where Notes
may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon the Issuer in respect of the Notes and this Indenture may
be served. The Issuer hereby initially appoints the Trustee to serve as its
agent for the foregoing purposes. The Issuer will give prompt written notice to
the Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Trustee as its agent to receive
all such surrenders, notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02, all payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Note Distribution Account
pursuant to Section 8.02(b) shall be made on behalf of the Issuer by the Trustee
or by another Paying Agent, and no amounts so withdrawn from the Note
Distribution Account for payments of Notes shall be paid over to the Issuer.
On or before each Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account an aggregate
sum sufficient to pay the amounts then becoming due, such sum to be held in
trust for the benefit of the Persons entitled thereto and (unless the Paying
Agent is the Trustee) shall promptly notify the Trustee of its action or failure
so to act.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Trustee notice of any default (of which it has
actual knowledge) by the Issuer (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent;
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(iv) immediately resign as a Paying Agent and forthwith pay to the
Trustee all sums held by it in trust for the payment of Notes if at any
time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; an d
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Trustee or any Paying Agent in trust for the payment of any amount
due with respect to any Note and remaining unclaimed for two years after such
amount has become due and payable shall be discharged from such trust and upon
Issuer Request shall be deposited by the Trustee in the Collection Account; and
the Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuer cause to be published once,
in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to or for the account of the
Issuer. The Trustee may also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Trustee or of any Paying Agent, at the last address of record for
each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under
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the laws of such other jurisdiction) and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, the Indenture Collateral and each other instrument or
agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Trustee to
be prior to all other liens in respect of the Trust Estate, and the Issuer shall
take all actions necessary to obtain and maintain, in favor of the Trustee, for
the benefit of the Noteholders, a first lien on and a first priority, perfected
security interest in the Trust Estate. The Issuer will from time to time execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, all as prepared by the Servicer and delivered to the Issuer, and
will take such other action necessary or advisable to:
(i) grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the Trustee
created by this Indenture or carry out more effectively the purposes
hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Indenture Collateral;
(v) preserve and defend title to the Trust Estate and the rights
of the Trustee in such Trust Estate against the claims of all persons and
parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.
SECTION 3.06. Opinions as to Trust Estate.
(a) On the Closing Date and on each Subsequent Transfer Date, the
Issuer shall furnish to the Trustee an Opinion of Counsel either stating that,
in the opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any financing
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statements and continuation statements, as are necessary to perfect and make
effective the first priority lien and security interest in favor of the Trustee,
for the benefit of the Trustee, created by this Indenture and reciting the
details of such action, or stating that, in the opinion of such counsel, no such
action is necessary to make such lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning in 1996,
the Issuer shall furnish to the Trustee an Opinion of Counsel with respect to
each jurisdiction in which the Contracts are located or a Uniform Commercial
Code financing statement has been filed by the Issuer either stating that, in
the opinion of such counsel, such action has been taken with respect to the
recording, filing, re-recording and refiling of this Indenture, any indentures
supplemental hereto and any other requisite documents and with respect to the
execution and filing of any financing statements and continuation statements as
is necessary to maintain the first priority lien and security interest created
by this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Contracts.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Trustee in an Officers' Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture. The Owner Trustee shall not be
responsible for the action or inaction of the Servicer or the Administrator.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Related Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and
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continuation statements required to be filed by the terms of this Indenture and
the Sale and Servicing Agreement in accordance with and within the time periods
provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Termination Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Trustee and the Rating Agencies thereof, and shall specify
in such notice the action, if any, the Issuer is taking with respect of such
default. If a Servicer Termination Event shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Contracts, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) If the Issuer has given notice of termination to the Servicer of
the Servicer's rights and powers pursuant to Section 8.2 of the Sale and
Servicing Agreement, as promptly as possible thereafter, the Issuer shall
appoint a successor servicer in accordance with Section 8.3 of the Sale and
Servicing Agreement.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Trustee. As soon as a successor Servicer is appointed, the Issuer shall notify
the Trustee of such appointment, specifying in such notice the name and address
of such successor Servicer.
(g) The Issuer agrees that it will not waive timely performance or
observance by the Servicer, the Backup Servicer or the Seller of their
respective duties under the Related Documents if the effect thereof would
adversely affect the Holders of the Notes.
SECTION 3.08. Negative Covenants. Until the Termination Date, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or the Sale
and Servicing Agreement, sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, including those included in
the Trust Estate, unless directed to do so by the Trustee;
(ii) claim any credit on, or make any deduction from the
principal, interest or premium payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert any
claim against any present or former Noteholder by reason of the payment of
the taxes levied or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien in favor of the Trustee created by this
Indenture to be amended, hypothecated, subordinated, terminated or
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discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim,
security interest, mortgage or other encumbrance (other than the lien in
favor of the Trustee created by this Indenture) to be created on or extend
to or otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof (other than tax liens,
mechanics' liens and other liens that arise by operation of law, in each
case on a Financed Product and arising solely as a result of an action or
omission of the related Obligor), (C) permit the lien in favor of the
Trustee created by this Indenture not to constitute a valid first priority
(other than with respect to any such tax, mechanics' or other lien)
security interest in the Trust Estate, or (D) amend, modify or fail to
comply with the provisions of the Related Documents without the prior
written consent of the Trustee.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year ended December 31, 199_), an Officers'
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that
(i) a review of the activities of the Issuer during such year and
of performance under this Indenture has been made under such Authorized
Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form and substance satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this Indenture
and each other Related Document on the part of the Issuer to be performed
or observed, all as provided herein;
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(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Trustee to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have been
taken;
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (which shall describe the actions
taken as required by clause (a)(v) of this Section 3.10 or that no such
actions will be taken) each stating that such consolidation or merger and
such supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction have
been compiled with (including any filing required by the Exchange Act); and
(vii) the Issuer or the Person (if other than the Issuer) formed by
or surviving such consolidation or merger has a net worth, immediately
after such consolidation or merger, that is (a) greater than zero and (b)
not less than the net worth of the Issuer immediately prior to giving
effect to such consolidation or merger.
(b) The Issuer shall not convey or transfer all or substantially all
of its properties or assets, including those included in the Trust Estate, to
any Person (except as expressly permitted by the Indenture or the Sale and
Servicing Agreement), unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States citizen or
a Person organized and existing under the laws of the United States of
America or any State, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form and substance
satisfactory to the Trustee, the due and punctual payment of the principal
of and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture and each Related Document on the
part of the Issuer to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in such supplemental
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indenture, expressly agree to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agree by means of
such supplemental indenture that such Person (or if a group of Persons,
then one specified Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Trustee to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have been
taken;
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (which shall describe the actions
taken as required by clause (b)(v) of this Section 3.10 or that no such
actions will be taken) each stating that such conveyance or transfer and
such supplemental indenture comply with this Article III and that all
conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange Act); and
(vii) the Person acquiring by conveyance or transfer the properties
or assets of the Issuer has a net worth, immediately after such conveyance
or transfer, that is (a) greater than zero and (b) not less than the net
worth of the Issuer immediately prior to giving effect to such conveyance
or transfer.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
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(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), Greet Tree Asset Receivables Trust,
199_-_ will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Trustee stating that
Green Tree Asset Receivables Trust, 199_-_ is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Contracts in the manner contemplated by this Indenture and the Related Documents
and activities incidental thereto. After the Funding Period, the Issuer shall
not fund the purchase of any new Contracts.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted
by or arising under the Related Documents. The proceeds of the Notes and the
Certificates shall be used exclusively to fund the Issuer's purchase of the
Contracts and the other assets specified in the Sale and Servicing Agreement, to
fund the Pre-Funding Account and the Reserve Account and to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 3.9, 3.10, 3.11 and 4.9(b) of the Sale and
Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuming
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, any other interest in, or make any capital
contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Restricted Payments. Except as expressly permitted by
this Indenture or the Sale and Servicing Agreement, the Issuer shall not,
directly or indirectly, (i) make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer,
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(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose. The Issuer will not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with this Indenture and the Related Documents.
SECTION 3.18. Notice of Events of Default. The Issuer agrees to give
the Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Servicer or the Seller of
its obligations under the Sale and Servicing Agreement.
SECTION 3.19. Further Instruments and Acts. Upon request of the
Trustee or the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Related Document.
SECTION 3.21. Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer shall not agree to any amendment to Section 10.1 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.
SECTION 3.22. Removal of Administrator. So long as any Notes are
issued and outstanding, the Issuer shall not remove the Administrator without
cause unless the Rating Agency Condition shall have been satisfied in connection
with such removal.
SECTION 3.23. Income Tax Characterization. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness of the Issuer.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of
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principal, interest and premium, if any, thereon, (iv) Sections 3.03, 3.04,
3.05, 3.07, 3.08, 3.10, 3.12, 3.13, 3.20, 3.21 and 3.23, (v) the rights,
obligations and immunities of the Trustee hereunder (including the rights of the
Trustee under Section 6.07 and the obligations of the Trustee under Section
4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them, and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at the Final Scheduled
Distribution Date within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense,
of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as part of
the Trust Estate cash or direct obligations of or obligations guaranteed by
the United States of America (which will mature prior to the date such
amounts are payable), in trust in an Eligible Account in the name of the
Trustee for such purpose, in an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation when due to the Final Scheduled Distribution Date or
Redemption Date (if Notes shall have been called for redemption pursuant to
Section 10.01(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all Secured
Obligations; and
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(C) the Issuer has delivered to the Trustee an Officers'
Certificate, an Opinion of Counsel and (if required by the TIA or the
Trustee an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 11.01(a)
and each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with
and the Rating Agency Condition has been satisfied.
SECTION 4.02. Application of Trust Money. All moneys deposited with
the Trustee pursuant to Section 4.01 hereof shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all moneys then held by any Paying Agent other than the Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Trustee to be held and applied according to
Section 3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 4.04. Release of Trust Estate. The Trustee shall, on or
after the Termination Date, release any remaining portion of the Trust Estate
from the lien created by this Indenture and deposit in the Collection Account
any funds then on deposit in any other Trust Account. The Trustee shall release
property from the lien created by this Indenture pursuant to this Section 4.04
only upon receipt of an Issuer Request accompanied by an Officer's Certificate,
an Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA (S)(S) 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.01.
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a period
of five; or
(ii) default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Trustee or to the Issuer and the
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Notes, a written notice specifying such default or incorrect representation
or warranty and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(iv) the commencement of an involuntary case against the Issuer
under any applicable Federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, and such case is not dismissed
within 60 days; or
(v) (A) the commencement by the Issuer of a voluntary case under
any applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, (B) the entry of an order for relief in an
involuntary case against the Issuer under any such law, (C) the consent by
the Issuer to the entry of any such order for relief, (D) the consent by
the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, (E) the
making by the Issuer of any general assignment for the benefit of
creditors, (F) the failure by the Issuer generally to pay its debts as such
debts become due, or (G) the taking of action by the Issuer in furtherance
of any of the foregoing.
The Issuer shall deliver to the Trustee, within five days after
obtaining knowledge of the occurrence thereof, written notice in the form of an
Officers' Certificate of any event which with the giving of notice and the lapse
of time would
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become an Event of Default under clause (iii), its status and what action the
Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Rights upon Event of Default.
If an Event of Default shall have occurred and be continuing, the
Trustee in its discretion may, or if so requested in writing by Holders holding
Notes representing at least 66-2/3% of the aggregate outstanding principal
amount of the Notes shall, upon prior written notice to the Rating Agencies,
declare by written notice to the Issuer that the Notes become, whereupon they
shall become, immediately due and payable at par, together with accrued interest
thereon. Notwithstanding anything to the contrary in this paragraph (c), if an
Event of Default specified in Section 5.01(iv) or (v) shall occur and be
continuing the Notes shall become immediately due and payable at par, together
with accrued interest thereon. If an Event of Default shall have occurred and be
continuing, the Trustee may exercise any of the remedies specified in Section
5.04(a).
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee; Authority of Trustee.
(a) The Issuer covenants that if any Notes are accelerated following
the occurrence of an Event of Default, the Issuer will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest, at
the applicable Interest Rate and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
(b) If an Event of Default occurs and is continuing, the Trustee may
in its discretion, proceed to protect and enforce its rights and the rights of
the Noteholders, by such appropriate Proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the
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creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such Proceedings
or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal, interest and premium, if any, owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for reimbursement
of all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee or
the Holders of Notes allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith.
(d) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
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(e) All rights of action and of asserting claims under this Indenture
or under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or Proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(f) In any Proceedings brought by the Trustee (including any
Proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent all the Holders of the Notes, and it
shall not be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies. (a) If an Event of Default shall have
occurred and be continuing, the Trustee may (subject to Section 5.05):
(i) institute Proceedings in its own name and as or on behalf of
a trustee of an express trust for the collection of all amounts then
payable on the Notes or under this Indenture with respect thereto, whether
by declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
any other remedy available to the Trustee and take any other appropriate
action to protect and enforce the rights and remedies of the Trustee on
behalf of the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the
Trustee may not sell or otherwise liquidate the Trust Estate following an
Event of Default unless
(A) such Event of Default is of the type described in
Section 5.01(i) or (ii), or
(B) either
(I) the Holders of 100% of the Outstanding Amount of the
Notes consent thereto,
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(II) the proceeds of such sale or liquidation
distributable to the Noteholders will be sufficient to discharge in
full all amounts then due and unpaid upon such Notes for principal
and interest, or
(III) the Trustee determines that the Trust Estate will
not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due
if the Notes had not been declared due and payable, and the Trustee
provides prior written notice to the Rating Agencies and obtains the
consent of Holders of 66-2/3% of the Outstanding Amount of the
Notes.
In determining such sufficiency or insufficiency with
respect to clause (II) or (III), the Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate
for such purpose.
SECTION 5.05. Optional Preservation of the Contracts. If any Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Trustee may, but need not, elect to maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.06. Priorities.
If the Trustee collects any money or property pursuant to this Article
V, including any money or property in respect of liquidation of the Trust Estate
pursuant to Section 5.04(a)(iv), the Trustee shall pay as promptly as
practicable out the money or property in the following order:
FIRST: amounts due and owing and required to be distributed to the
Servicer, the Owner Trustee, the Administrator, the Trustee, the Custodian
and the Backup Servicer, respectively, pursuant to priorities (i), (ii) and
(iii) of Section 4.6 of the Sale and Servicing Agreement and not previously
distributed, in the order of such priorities and without preference or
priority of any kind within such priorities;
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SECOND: to Noteholders, for amounts due and unpaid on the Notes for
interest plus, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for interest;
THIRD: to Noteholders for amounts due and unpaid on the Notes for
principal, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal;
FOURTH: amounts due and unpaid on the Class B Certificates for
interest and principal, to the Owner Trustee for distribution to Class B
Certificateholders in accordance with Section 5.2(d) of the Trust
Agreement;
provided that any amounts collected from the Pre-Funding Account or the Reserve
Account shall be paid, first, for amounts due and unpaid on the Notes for
principal, for distribution to Noteholders in accordance with Section 10.01(b)
and, second, for amounts due and unpaid on the Class B Certificates for
principal, in accordance with Section 4.7(b) of the Sale and Servicing Agreement
and, third, in accordance with priorities ONE through FOURTH above.
SECTION 5.07. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Trustee
hereunder;
(iii) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceedings;
and
(v) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of
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this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
SECTION 5.08. Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder; provided, however, that so
long as an Insurer Default shall not have occurred and be continuing, no such
suit shall be instituted.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or
any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Trustee or to such
Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission
of the Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Trustee or to the Noteholders may be exercised from time to time, and as
often
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as may be deemed expedient, by the Trustee or by the Noteholders, as the case
may be.
SECTION 5.12. Control by Noteholders. The Holders of a majority of
the Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Trustee with respect to the Notes or exercising any trust or power conferred on
the Trustee; provided that
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Trustee to sell or liquidate all or any portion of the Trust Estate
shall be by the Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes;
(iii) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided, however,
that, subject to Section 6.01, the Trustee need not take any action that it
determines might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. Waiver of Past Defaults.
The Holders of Notes of not less than a majority of the Outstanding
Amount of the Notes may waive any past Default or Event of Default and its
consequences except a Default (a) in payment of principal of or interest on any
of the Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the case
of any such waiver, the Issuer, the Trustee and the Holders of the Notes shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair an y right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that
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such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted by
the Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the Outstanding Amount of
the Notes or (c) any suit instituted by any Noteholder for the enforcement of
the payment of principal of or interest on any Note on or after the respective
due dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantages of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.16. Action on Notes. The Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
SECTION 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Trustee to do so and at the
Seller's expense, the Issuer agrees to take all such lawful action as the
Trustee may request to compel or secure the performance and observance by the
Seller or the Servicer, as applicable, of each of their obligations to the
Issuer under or in connection with the Sale and Servicing Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Servicing Agreement to the extent and in the manner directed
by the Trustee, including the transmission of notices of default on the part of
the Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and Servicing
Agreement.
(b) If an Event of Default has occurred and is continuing, the Trustee
may, and at the direction (which direction shall be in writing, including
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facsimile) of the Holders of 66-2/3% of the Outstanding Amount of the Notes
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Servicer under or in connection with the Sale
and Servicing Agreement, including the right or power to take any action to
compel or secure performance or observance by the Seller or the Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
THE TRUSTEE AND THE TRUSTEE
SECTION 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture with the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; however,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture and, if
applicable, the Trustee's other Related Documents.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayments of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) In no event shall the Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer, or any other party, under the Sale and Servicing Agreement[, except
during such time, if any, as the Backup Servicer shall be the successor to, and
be vested with the rights, powers, duties and privileges of the Servicer in
accordance with the terms of, the Sale and Servicing Agreement.]
(j) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Sale and Servicing
Agreement.
(k) Without limiting the generality of this Section 6.01, the Trustee
shall have no duty (i) to see to any recording, filing or depositing of this
Indenture or any agreement referred to herein or any financing statement
evidencing a security interest in the Financed Products, or to see to the
maintenance of any such recording or filing or depositing or to any recording,
refiling or redepositing of any thereof, (ii) to see to any insurance of the
Financed Products or Obligors or to effect or maintain any such insurance, (iii)
to see to the payment or discharge of any tax, assessment or other governmental
charge or any Lien or encumbrance of any kind owing with respect to, assessed or
levied against any part of the Trust, (iv) to confirm or verify the contents of
any reports or certificates delivered to the Trustee pursuant to this Indenture
or the Sale and Servicing Agreement believed by the
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Trustee to be genuine and to have been signed or presented by the proper party
or parties, or (v) to inspect the Financed Products at any time or ascertain or
inquire as to the performance of observance of any of the Issuer's, the Seller's
or the Servicer's representations, warranties or covenants or the Servicer's
duties and obligations as Servicer and as custodian of the Contract Files under
the Agreement.
SECTION 6.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate (with respect to factual matters) or an Opinion of
Counsel, as applicable. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on the Officers' Certificate or
Opinion of Counsel, as applicable, or as directed by the requisite amount of
Note Owners as provided herein.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of, any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of any of the Holders of Notes, pursuant to the
provisions of this Indenture, unless such Holders of Notes shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however, that the
Trustee shall, upon the occurrence of an Event of Default (that has not been
cured), exercise the rights and powers vested in it by this Indenture with
reasonable care and skill.
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(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount thereof; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However,
the Trustee is required to comply with Sections 6.11 and 6.12.
SECTION 6.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Trust Estate or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to each Noteholder notice of the Default within 90 days after
it occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Trustee may withhold the notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Trustee to Holders. The Trustee shall
deliver to each Noteholder such information as may be required to enable such
holder to prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity.
(a) The Seller in a separate letter agreement (the "Letter Agreement")
has covenanted and agreed to pay to the Trustee, and the Trustee shall be
entitled to, certain annual fees, which shall not be limited by any law on
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compensation of a trustee of an express trust. In the Letter Agreement, the
Seller has also agreed to reimburse the Trustee for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. Pursuant to the Letter Agreement, the Seller
has agreed to indemnify the Trustee against any and all loss, liability or
expense (including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder.
(b) If notwithstanding the provisions of the Letter Agreement, the
Seller fails to pay any fee due to the Trustee pursuant to the terms or the
Letter Agreement, the Trustee shall be entitled to a distribution in respect of
such amount pursuant of Section 4.6(ii) of the Sale and Servicing Agreement. The
Issuer's payment obligations to the Trustee pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 5.01(iv) or (v) with respect to
the Issuer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable Federal or
state bankruptcy, insolvency or similar law. Notwithstanding anything else set
forth in this Indenture or the Related Documents, the Trustee agrees that the
obligations of the Issuer (but not the Seller) to the Trustee hereunder and
under the Related Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to the assets of any General Partner of the
Issuer or any Certificateholder. In addition, the Trustee agrees that its
recourse to the Issuer or the Trust Estate shall be limited to the right to
receive the distributions referred to in the first two sentences of this Section
6.07(b).
SECTION 6.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Issuer. The Issuer may remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Trustee in an involuntary case or proceeding under federal or state banking
or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law,
shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Trustee or for any substantial
part of the Trustee's property, or ordering the winding-up or liquidation
of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now
or hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Trustee and such case is not dismissed within 60 days;
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(iv) the Trustee commences a voluntary case under any federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, or consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, conservator, sequestrator (or
other similar official) for the Trustee or for any substantial part of the
Trustee's property, or makes any assignment for the benefit of creditors or
fails generally to pay its debts as such debts become due or takes any
corporate action in furtherance of any of the foregoing;
(v) the Trustee otherwise becomes incapable of acting; or
(vi) the rating assigned to the long-term unsecured debt
obligations of the Trustee (or the holding company thereof) by the Rating
Agencies shall be lowered below the rating of "BBB", "Baa3" or equivalent
rating or be withdrawn by either of the Rating Agencies.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of a majority in Outstanding Amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to this Section and payment of all fees and expenses owed to the
outgoing Trustee. Notwithstanding the replacement of the Trustee pursuant to
this Section, the retiring Trustee shall be entitled to payment or reimbursement
of such amounts as such Person is entitled pursuant to Section 6.07.
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SECTION 6.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee. The Trustee shall provide the Rating
Agencies prompt notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee, shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders, such title to
the Trust, or any part hereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor Trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such
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jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b), including the optional provision permitted by the second sentence of
TIA (S) 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA (S) 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA (S) 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Trustee Names and Addresses to
Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Notes as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders of Notes received by the Trustee in its capacity
as Note Registrar. The Trustee may destroy any list furnished to it as provided
in such Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Trustee and the Note Registrar shall have the
protection of TIA (S) 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance with
rules and regulations prescribed from time to time by the Commission such
additional information, documents and reports with respect to
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compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Trustee (and the Trustee shall transmit by mail
to all Noteholders described in TIA (S) 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to clauses (i) and (ii) of this Section 7.03(a) as may be required
by rules and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Trustee. If required by TIA (S) 313(a),
within 60 days after each March 31 beginning with March 31, 1996, the Trustee
shall mail to each Noteholder as required by TIA (S) 313(c) a brief report dated
as of such date that complies with TIA (S) 313(a). The Trustee also shall
comply with TIA (S) 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the Commission and each stock exchange, if any, on
which the Notes are listed. The Issuer shall notify the Trustee if and when the
Notes are listed on any stock exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
Contract by the Trustee pursuant to this Indenture. The Trustee shall apply all
such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of this
Indenture or the Notes, the Trustee may take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Trustee, for the benefit
of the
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Noteholders and the Certificateholders, the Trust Accounts as provided in
Section 4.1 of the Sale and Servicing Agreement.
(b) On each Payment Date and Redemption Date, the Trustee shall
distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes for principal, interest and premium, if any, first to pay all accrued
and unpaid interest, and then to pay principal and premium, if any, on the Notes
in the following amounts and in the following order of priority (except as
otherwise provided in Section 5.06):
(i) accrued and unpaid interest on the Notes, provided that if
funds in the Note Distribution Account are not sufficient to pay the entire
amount of accrued but unpaid interest on each class of Notes, the amount in
the Note Distribution Account shall be applied to the payment of such
interest on each class of Notes pro rata on the basis of the amount of
accrued and unpaid interest on each class of Notes;
(ii) any amounts deposited in the Note Distribution Account with
respect to the Class A-1 Note Prepayment Amount or Class A-1 Note
Prepayment Premium shall be distributed to the Holders of the Class A-1
Notes, any amounts deposited in the Note Distribution Account with respect
to the Class A-2 Note Prepayment Amount, the Class A-3 Prepayment Amount,
the Class A-4 Prepayment Amount, Class A-5 Prepayment Amount, and the Class
A-6 Prepayment Amount or the Class A-2 Note Prepayment Premium, the
Class A-3 Prepayment Premium, the Class A-4 Prepayment Premium, the
Class A-5 Prepayment Premium, and the Class A-6 Prepayment Premium shall be
distributed to the Holders of the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes;
(iii) to the Holders of the Class A-1 Notes in reduction of the
Outstanding Amount of the Class A-1 Notes until the Outstanding Amount of
the Class A-1 Notes is reduced to zero;
(iv) to the Holders of the Class A-2 Notes in reduction of the
Outstanding Amount of the Class A-2 Notes until the Outstanding Amount of
the Class A-2 Notes is reduced to zero,
(v) to the Holders of the Class A-3 Notes in reduction of the
Outstanding Amount of the Class A-3 Notes until the Outstanding Amount of
the Class A-3 Notes is reduced to zero;
(vi) to the Holders of the Class A-4 Notes in reduction of the
Outstanding Amount of the Class A-4 Notes until the Outstanding Amount of
the Class A-4 Notes is reduced to zero;
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(vii) to the Holders of the Class A-5 Notes in reduction of the
Outstanding Amount of the Class A-5 Notes until the Outstanding Amount of
the Class A-5 Notes is reduced to zero; and
(viii) to the Holders of the Class A-6 Notes in reduction of the
Outstanding Amount of the Class A-6 Notes until the Outstanding Amount of
the Class A-6 Notes is reduced to zero.
SECTION 8.03. General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Trust Accounts shall be
invested and reinvested in Eligible Investments in accordance with the
provisions of Section 4.1(e) of the Sale and Servicing Agreement.
(b) Subject to Section 6.01(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Trustee's failure to make payments on such Eligible
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as Trustee, in accordance with their terms.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Trustee any property subject or required to be subjected
to the lien created by this Indenture, or to subject to the lien created by
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the
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assumption by any such successor of the covenants of the Issuer herein and
in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
not adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar Federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.02. Supplemental Indentures With Consent of Noteholders.
The Issuer and the Trustee, when authorized by an Issuer Order, also may, with
prior notice to the Rating Agencies, and with the consent of the Holders
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of not less than a majority of the Outstanding Amount of the Notes, by Act of
such Holders delivered to the Issuer and the Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto, change
the provision of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the Trust Estate to payment of
principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof (or,
in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Trustee to direct the Issuer to sell or liquidate
the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Related Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or to affect the
rights
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of the Holders of Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien created by this Indenture with respect to any part of
the Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien created by this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security provided
by the lien created by this Indenture.
The Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture, and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Trustee shall not be
liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and
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be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 9.05. Conformity With Trust Indenture Act. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption.
(a) In the event that the Seller or the Servicer pursuant to Section
9.1(a) of the Sale and Servicing Agreement purchases the corpus of the Trust,
the Notes are subject to redemption in whole, but not in part, on the Payment
Date on which such repurchase occurs, for a purchase price equal to the
Redemption Price; provided, however, that the Issuer has available funds
sufficient to pay the Redemption Price. The Seller, the Servicer or the Issuer
shall furnish the Rating Agencies notice of such redemption. If the Notes are to
be redeemed pursuant to this Section 10.01(a), the Servicer or the Issuer shall
furnish notice of such election to the Trustee not later than 25 days prior to
the Redemption Date, and the Issuer shall deposit with the Trustee in the Note
Distribution Account the Redemption Price of the Notes to be redeemed, whereupon
all such Notes shall be due and payable on the Redemption Date upon the
furnishing of a notice complying with Section 10.02 to each Holder of the Notes.
(b) In the event that on the Payment Date on or immediately following
the last day of the Funding Period, any portion of the Pre-Funded Amount remains
on deposit in the Pre-Funding Account after giving effect to the purchase of all
Subsequent Contracts, including any such purchase on such Redemption Date, each
class of Notes will be redeemed in part, on a pro rata basis, in an aggregate
principal amount equal to the Class A-1 Prepayment Amount, the Class A-2
Prepayment Amount, the Class A-3 Prepayment Amount, the Class A-4
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Prepayment Amount, Class A-5 Prepayment Amount, or the Class A-6 Prepayment
Amount, as applicable.
If the Pre-Funded Amount at the end of the Pre-Funding Period exceeds
$100,000, the Issuer shall also pay to the Holders of each class of Notes, on a
pro rata basis, on the Redemption Date the Class A-1 Prepayment Premium, the
Class A-2 Prepayment Premium, the Class A-3 Prepayment Premium, the Class A-4
Prepayment Premium, the Class A-5 Prepayment Premium, and the Class A-6
Prepayment Premium, as applicable; provided, however, that the Issuer's
obligation to pay the Class A-1 Prepayment Premium, the Class A-2 Prepayment
Premium, the Class A-3 Prepayment Premium, the Class A-4 Prepayment Premium, the
Class A-5 Prepayment Premium, or the Class A-6 Prepayment Premium shall be
limited solely to funds received by the Issuer pursuant to Section 2.4(d) of the
Sale and Servicing Agreement and no other assets of the Issuer will be available
to pay the Class A-1 Prepayment Premium, the Class A-2 Prepayment Premium, the
Class A-3 Prepayment Premium, the Class A-4 Prepayment Premium, the Class A-5
Prepayment Premium, or the Class A-6 Prepayment Premium under any circumstances.
(c) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, the proceeds of such sale shall be
distributed as provided in Section 5.06. If amounts are to be paid to
Noteholders pursuant to this Section 10.01(c), the Servicer or the Issuer shall,
to the extent practicable, furnish notice of such event to the Trustee not later
than 25 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date.
SECTION 10.02. Form of Redemption Notice.
(a) Notice of redemption under Section 10.01(a) shall be given by the
Trustee by first-class mail, postage prepaid, mailed not less than five days
prior to the applicable Redemption Date to each Holder of Notes, as of the close
of business on the Record Date with respect to the Payment Date immediately
preceding the applicable Redemption Date, at such Holder's address appearing in
the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the Issuer
to be maintained as provided in Section 3.02).
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Notice of redemption of the Notes shall be given by the Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
(b) Prior notice of redemption under Sections 10.01(b) and 10.01(c) is
not required to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption (if any)
as required by Section 10.02, on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Trustee to
take any action under any provision of this Indenture, the Issuer shall furnish
to the Trustee (i) an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Indenture Collateral or other
property or securities with the Trustee that is to be made the basis for
the release of any property subject to the lien created by this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a)
or elsewhere in this Indenture, furnish to the Trustee an Officers'
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Indenture Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the Trustee an
Officers' Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer shall
also deliver to the Trustee an Independent Certificate as to the same
matters, if the fair value to the Issuer of the property to be so deposited
and of all other such property made the basis of any such withdrawal or
release since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to clause (i)
above and this clause (ii), is 10% or more of the Outstanding Amount of the
Notes, but such a certificate need not be furnished with respect to any
property so deposited, if the fair value thereof to the Issuer as set forth
in the related Officers' Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Other than with respect to any release described in clause
(A) or (B) of Section 11.01(b)(v), whenever any property or securities are
to be released from the lien created by this Indenture, the Issuer shall
also furnish to the Trustee an Officers' Certificate certifying or stating
the opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to
be released and stating that in the opinion of such person the proposed
release will not impair the security created by this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee an
Officers' Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer shall
also furnish to the Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property or securities (other than property described in clauses (A) or (B)
of Section 11.01(b)(v)) released from the lien created by this Indenture
since the commencement of the then
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current fiscal year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof as set
forth in the related Officers' Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding any other provision of this Section, the
[Trustee?] may, without compliance with the other provisions of this
Section, (A) collect, liquidate, sell or otherwise dispose of Contracts as
and to the extent permitted or required by the Related Documents (including
as provided in Section 3.1 of the Sale and Servicing Agreement) and (B)
make cash payments out of the Trust Accounts as and to the extent permitted
or required by the Related Documents.
SECTION 11.02. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy,
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at the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Trustee's right to rely upon the truth and accuracy of any statement or
opinion contained in any such document as provided in Article VI.
SECTION 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to or filed with:
(a) the Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office,
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(b) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class, postage prepaid, to the Issuer addressed to: Green Tree Asset
Receivables Trust, 199_-_, in care of _______________________, as Owner
Trustee, ___________________________________, Attention: Corporate Trust
Administration or at any other address previously furnished in writing to
the Trustee by Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Trustee, or
Notices required to be given to the Rating Agencies by the Issuer, the
Trustee or the Owner Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt requested to (i) in the case of
Moody's, at the following address: Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007 and (ii)
in the case of Standard & Poor's, at the following address: Standard &
Poor's Ratings Group, 26 Broadway (20th Floor), New York, New York 10004,
Attention of Asset Backed Surveillance Department; or as to each of the
foregoing, at such other address as shall be designated by written notice
to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created
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hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Trustee or any Paying Agent
to such Holder, that is different from the methods provided for in this
Indenture for such payments or notices. The Issuer will furnish to the Trustee
a copy of each such agreement and the Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA (S)(S) 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not.
All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 11.10. Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
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SECTION 11.12. Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trustee or any other counsel reasonably
acceptable to the Trustee,) to the effect that such recording is necessary
either for the protection of the Noteholders or any other Person secured
hereunder or for the enforcement of any right or remedy granted to the Trustee
under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Trustee on the Notes or under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Trustee
or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Trustee or of any successor or assign of the Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee and the Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
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that they will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any United States Federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, this Indenture or any of the Related Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Trustee shall
and shall cause its representatives to hold in confidence all such information
except to the extent disclosure may be required by law (and all reasonable
applications for confidential treatment are unavailing) and except to the extent
that the Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
SECTION 11.19. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by ___________________________________, not individually or personally
but solely as Owner Trustee of the Issuer under the Trust Agreement, in the
exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by ___________________________________ but is made and intended for
the purpose for binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on ______________________________,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties to this Agreement and by any person claiming by, through or under them
and (d) under no circumstances shall _______________________________ be
personally liable for the payment of any indebtedness or expenses of the Issuer
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Agreement or
any related documents.
-65-
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
By ____________________________________________ ,
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement,
By ____________________________________________ ,
Name:_______________________________________
Title:______________________________________
_______________________________________________ ,
not in its individual capacity but solely as
Trustee and Trustee,
By_____________________________________________
Name:_______________________________________
Title:______________________________________
-66-
<PAGE>
EXHIBIT A
Schedule of Initial Contracts
A-1
<PAGE>
EXHIBIT B
Form of Depository Agreement
B-1
<PAGE>
EXHIBIT C-1
REGISTERED $ /*/
---------------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO._____________________
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
______% CLASS A-1 GREEN TREE ASSET CONTRACTS-BACKED NOTE
Green Tree Asset Receivables Trust, 199_-_, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [ ],
or registered assigns, the principal sum of [ ] payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $__________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-1 Notes pursuant to Section 3.01 of the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable on
the earlier of the __________________ Payment Date (the "Class A-1 Final
Scheduled Distribution Date") and the Redemption Date, if any, pursuant to
Section 10.01(a) and (c) of the Indenture referred to on the reverse hereof;
provided further, that a portion of the principal amount of this Note in an
amount equal to the result obtained by multiplying (i) a fraction the numerator
of which is [INSERT INITIAL
- ---------------------------
/*/Denominations of $1,000 and integral multiples thereof.
C-1-1
<PAGE>
PRINCIPAL AMOUNT OF NOTE] and the denominator of which is $__________ by (ii)
the Class A-1 Prepayment Amount after giving effect to the purchase of all
Subsequent Contracts, on the Payment Date on or immediately following the last
day of the Funding Period, will be due and payable on the Redemption Date, if
any, pursuant to Section 10.01(b) of the Indenture (referred to on the reverse
hereof). If the Pre-Funded Amount at the end of the Funding Period exceeds
$100,000, the Issuer will pay a premium on this Note, on the Redemption Date, in
an amount equal to the result obtained by multiplying (a) a fraction the
numerator of which is [INSERT INITIAL PRINCIPAL AMOUNT OF NOTE] and the
denominator of which is $__________ by (b) the Class A-1 Prepayment Premium. The
Issuer will pay interest on this Note at the rate per annum shown above on each
Payment Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
____________, 199_. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest and premium, if any, on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest and premium, if any, on this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C-1-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE ASSET RECEIVABLES
TRUST, 199_-_
By
-------------------------------------
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
By
-------------------------------------
Name:
Title:
C-1-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
-----------------------------------
not in its individual capacity but
solely as Trustee,
By
---------------------------------
Authorized Signatory
C-1-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ______% Class A-1 Asset Contracts-Backed Notes (herein called
the "Notes"), all issued under an Indenture dated as of ____________, 199_ (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and _________________________, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture)_________________________, to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ___________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(c) of the Indenture. As described above, a portion of the unpaid
principal balance of this Note shall be due and payable on the Redemption Date,
if any, pursuant to Section 10.01(b) of the Indenture. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable (i) on the date on which an Event of Default shall have occurred and be
continuing so long as an Insurer Default shall not have occurred and be
continuing or (ii) if an Insurer Default shall have occurred and be continuing,
on the date on which an Event of Default shall have occurred and be continuing
and the Trustee or the Holders of the Notes representing at least 66-2/3% of the
Outstanding Amount of the Notes have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the Class
A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on
C-1-5
<PAGE>
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Depository (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) affected by any payments made on any Payment Date
shall be binding upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Trustee, in the name
of and on behalf of the Issuer, will notify the Person who was the Registered
Holder hereof as of the Record Date with respect to the Payment Date immediately
preceding such Redemption Date by notice mailed within five days of such
Redemption Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Trustee's principal Corporate
Trust Office or at the office of the Trustee's agent appointed for such purposes
located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
Payments of premium, if any, on this Note will be payable on the
related Redemption Date in an amount described on the face hereof.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.01(a) of the Indenture, in whole, but not in part, at the option
of the Seller or the Servicer on any Payment Date on or after the date on which
the Aggregate Principal Balance is less than or equal to 10% of the Original
Pool Balance, and (b) pursuant to Section 10.01(b) of the Indenture, in part, on
a pro rata basis, on the Payment Date on or immediately following the last day
of the Funding Period, in the event that any amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the
C-1-6
<PAGE>
Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
C-1-7
<PAGE>
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of each class of
Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither ___________________________ in its
individual capacity, any owner of a beneficiary interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this
C-1-8
<PAGE>
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purpose of binding the interests of the Owner Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that except as
expressly provided in the Related Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
C-1-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- ------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _________________________________________________________________**
Signature Guaranteed:
_______________________________
- ------------------------
- ------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C-1-10
<PAGE>
EXHIBIT C-2
REGISTERED $ /**/
-------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.__________________________
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
______% CLASS A-2 ASSET CONTRACTS-BACKED NOTE
Green Tree Asset Receivables Trust, 199_--_, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to [ ],
or registered assigns, the principal sum of [ ] payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $__________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-2 Notes pursuant to Section 3.01 of the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable on
the earlier of the __________________ Payment Date (the "Final Scheduled
Distribution Date") and the Redemption Date, if any, pursuant to Section
10.01(a) and (c) of the Indenture referred to on the reverse hereof; provided
further, that a portion of the principal amount of this Note in an amount equal
to the result obtained by multiplying (i) a fraction the numerator of which is
[INSERT INITIAL PRINCIPAL
- -----------------------
/**/Denominations of $1,000 and integral multiples thereof.
C-2-1
<PAGE>
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the Class
A-2 Prepayment Amount, after giving effect to the purchase of all Subsequent
Contracts on the Payment Date on which the Funding Period ends (or on the
Payment Date on or immediately following the last day of the Funding Period if
the Funding Period does not end on a Payment Date) will be due and payable on
the Redemption Date, if any, pursuant to Section 10.01(b) of the Indenture
(referred to on the reverse hereof). If the Pre-Funded Amount at the end of the
Funding Period exceeds $100,000, the Issuer will pay a premium on this Note, on
the Redemption Date, in an amount equal to the result obtained by multiplying
(a) a fraction the numerator of which is [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $__________ by (b) the Class A-2
Prepayment Premium. The Issuer will pay interest on this Note at the rate per
annum shown above on each Payment Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date). Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such Payment Date or, if no interest has yet been paid, from
____________, 199_. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest and premium, if any, on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest and premium, if any, on this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C-2-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE ASSET RECEIVABLES
TRUST, 199_-_
By
----------------------------------
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
By
----------------------------------
Name:
Title:
C-2-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
___________________________________
not in its individual capacity but
solely as Trustee,
By
---------------------------------
Authorized Signatory
C-2-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ______% Class A-2 Asset Contracts-Backed Notes (herein called
the "Notes"), all issued under an Indenture dated as of ____________, 199_ (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and _________________________, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ___________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.01(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the Trustee
or the Holders of the Notes representing at least 66-2/3% of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. All principal payments on
the Class A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by
C-2-5
<PAGE>
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) affected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date with respect to the Payment Date immediately preceding such
Redemption Date by notice mailed within five days of such Redemption Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
Payments of premium, if any, on this Note will be payable on the
related Redemption Date in an amount described on the face hereof.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.01(a) of the Indenture, in whole, but not in part, at the option
of the Seller or the Servicer on any Payment Date on or after the date on which
the Aggregate Principal Balance is less than or equal to 10% of the Original
Pool Balance, and (b) pursuant to Section 10.01(b) of the Indenture, in part, on
a pro rata basis, on the Payment Date on or immediately following the last day
of the Funding Period in the event that any amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any
C-2-6
<PAGE>
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
C-2-7
<PAGE>
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of each class of
Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither ___________________________ in its
individual capacity, any owner of a beneficiary interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purpose of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of
C-2-8
<PAGE>
this Note by the acceptance hereof agrees that except as expressly provided in
the Related Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
C-2-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _____________________________________________________________________**
Signature Guaranteed:
-----------------------------------
- -----------------------------
- ------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C-2-10
<PAGE>
EXHIBIT C-3
REGISTERED $ /***/
---------------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.__________________________
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
______% CLASS A-3 ASSET CONTRACTS-BACKED NOTE
Green Tree Asset Receivables Trust, 199_-_, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [ ], or
registered assigns, the principal sum of [ ] payable on each
Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF NOTE]
and the denominator of which is $__________ by (ii) the aggregate amount, if
any, payable from the Note Distribution Account in respect of principal on the
Class A-3 Notes pursuant to Section 3.01 of the Indenture; provided, however,
that the entire unpaid principal amount of this Note shall be due and payable on
the earlier of the __________________ Payment Date (the "Final Scheduled
Distribution Date") and the Redemption Date, if any, pursuant to Section
10.01(a) and (c) of the Indenture referred to on the reverse hereof; provided
further, that a portion of the principal amount of this Note in an amount equal
to the result obtained by multiplying (i) a fraction the numerator of which is
[INSERT INITIAL PRINCIPAL
- ---------------------
/***/Denominations of $1,000 and integral multiples thereof.
C-3-1
<PAGE>
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the Class
A-3 Prepayment Amount, after giving effect to the purchase of all Subsequent
Contracts on the Payment Date on which the Funding Period ends (or on the
Payment Date on or immediately following the last day of the Funding Period if
the Funding Period does not end on a Payment Date) will be due and payable on
the Redemption Date, if any, pursuant to Section 10.01(b) of the Indenture
(referred to on the reverse hereof). If the Pre-Funded Amount at the end of the
Funding Period exceeds $100,000, the Issuer will pay a premium on this Note, on
the Redemption Date, in an amount equal to the result obtained by multiplying
(a) a fraction the numerator of which is [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $__________ by (b) the Class A-3
Prepayment Premium. The Issuer will pay interest on this Note at the rate per
annum shown above on each Payment Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date). Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such Payment Date or, if no interest has yet been paid, from
____________, 199_. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest and premium, if any, on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest and premium, if any, on this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C-3-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE ASSET RECEIVABLES
TRUST, 199_-_
By
----------------------------------
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement,
By
----------------------------------
Name:
Title:
C-3-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
----------------------------------------
not in its individual capacity but
solely as Trustee,
By
--------------------------------------
Authorized Signatory
C-3-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ______% Class A-3 Asset Contracts-Backed Notes (herein called
the "Notes"), all issued under an Indenture dated as of ____________, 199_ (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and _________________________, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ___________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.01(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the Trustee
or the Holders of the Notes representing at least 66-2/3% of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. All principal payments on
the Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by
C-3-5
<PAGE>
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) affected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date with respect to the Payment Date immediately preceding such
Redemption Date by notice mailed within five days of such Redemption Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
Payments of premium, if any, on this Note will be payable on the
related Redemption Date in an amount described on the face hereof.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.01(a) of the Indenture, in whole, but not in part, at the option
of the Seller or the Servicer on any Payment Date on or after the date on which
the Aggregate Principal Balance is less than or equal to 10% of the Original
Pool Balance, and (b) pursuant to Section 10.01(b) of the Indenture, in part, on
a pro rata basis, on the Payment Date on or immediately following the last day
of the Funding Period in the event that any amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any
C-3-6
<PAGE>
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
C-3-7
<PAGE>
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of each class of
Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither ___________________________ in its
individual capacity, any owner of a beneficiary interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purpose of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of
C-3-8
<PAGE>
this Note by the acceptance hereof agrees that except as expressly provided in
the Related Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
C-3-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
________________________________________________________________________________
_________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ____________________________________________________________________**
Signature Guaranteed:
----------------------------------------------
- --------------------------------
- ----------------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C-3-10
<PAGE>
EXHIBIT C-4
REGISTERED $ /****/
---------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.__________________________
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
______% CLASS A-4 ASSET CONTRACTS-BACKED NOTE
Green Tree Asset Receivables Trust, 199_-_, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [ ],
or registered assigns, the principal sum of [ ]
payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $[INSERT INITIAL PRINCIPAL
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the Class A-4 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the __________________ Payment Date (the
"Final Scheduled Distribution Date") and the Redemption Date, if any, pursuant
to Section 10.01(a) and (c) of the Indenture referred to on the reverse hereof;
provided further, that a portion of the principal amount of this Note in an
amount equal to the result obtained by multiplying (i) a fraction the numerator
of which is [INSERT INITIAL PRINCIPAL
- --------------------
/****/Denominations of $1,000 and integral multiples thereof.
C-4-1
<PAGE>
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the Class
A-4 Prepayment Amount, after giving effect to the purchase of all Subsequent
Contracts on the Payment Date on which the Funding Period ends (or on the
Payment Date on or immediately following the last day of the Funding Period if
the Funding Period does not end on a Payment Date) will be due and payable on
the Redemption Date, if any, pursuant to Section 10.01(b) of the Indenture
(referred to on the reverse hereof). If the Pre-Funded Amount at the end of the
Funding Period exceeds $100,000, the Issuer will pay a premium on this Note, on
the Redemption Date, in an amount equal to the result obtained by multiplying
(a) a fraction the numerator of which is [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $__________ by (b) the Class A-4
Prepayment Premium. The Issuer will pay interest on this Note at the rate per
annum shown above on each Payment Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date). Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such Payment Date or, if no interest has yet been paid, from
____________, 199_. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest and premium, if any, on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest and premium, if any, on this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C-4-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
By_______________________________________________
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement,
By_______________________________________________
Name:
Title:
C-4-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
_______________________________________________
not in its individual capacity but solely as
Trustee,
By_____________________________________________
Authorized Signatory
C-4-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ______% Class A-4 Asset Contracts-Backed Notes (herein called
the "Notes"), all issued under an Indenture dated as of ____________, 199_ (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and _________________________, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ___________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.01(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the Trustee
or the Holders of the Notes representing at least 66-2/3% of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. All principal payments on
the Class A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by
C-4-5
<PAGE>
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) affected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date with respect to the Payment Date immediately preceding such
Redemption Date by notice mailed within five days of such Redemption Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.
Payments of premium, if any, on this Note will be payable on the
related Redemption Date in an amount described on the face hereof.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.01(a) of the Indenture, in whole, but not in part, at the option
of the Seller or the Servicer (with the consent of the Security Insurer under
certain circumstances), on any Payment Date on or after the date on which the
Aggregate Principal Balance is less than or equal to 10% of the Original Pool
Balance, and (b) pursuant to Section 10.01(b) of the Indenture, in part, on a
pro rata basis, on the Payment Date on or immediately following the last day of
the Funding Period in the event that any amount remains on deposit in the Pre-
Funding Account after giving effect to the purchase of all Subsequent Contracts,
including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the
C-4-6
<PAGE>
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
C-4-7
<PAGE>
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of each class of
Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither ___________________________ in its
individual capacity, any owner of a beneficiary interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations
C-4-8
<PAGE>
and indemnifications have been made by the Owner Trustee for the sole purpose of
binding the interests of the Owner Trustee in the assets of the Issuer. The
Holder of this Note by the acceptance hereof agrees that except as expressly
provided in the Related Documents, in the case of an Event of Default under the
Indenture, the Holder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
C-4-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- ---------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto________________________________________________________________
______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ____________________________________________________________________**
Signature Guaranteed:
----------------------------------------
- ------------------------------------
- --------------------------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C-4-10
<PAGE>
EXHIBIT C-5
REGISTERED $ /*****/
--------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.__________________________
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
______% CLASS A-5 ASSET CONTRACTS-BACKED NOTE
Green Tree Asset Receivables Trust, 199_-_, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [ ],
or registered assigns, the principal sum of [ ]
payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $[INSERT INITIAL PRINCIPAL
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the Class A-5 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the __________________ Payment Date (the
"Final Scheduled Distribution Date") and the Redemption Date, if any, pursuant
to Section 10.01(a) and (c) of the Indenture referred to on the reverse hereof;
provided further, that a portion of the principal amount of this Note in an
amount equal to the result obtained by multiplying (i) a fraction the numerator
of which is [INSERT INITIAL PRINCIPAL
- --------------------
/*****/Denominations of $1,000 and integral multiples thereof.
C-5-1
<PAGE>
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the Class A-
5 Prepayment Amount, after giving effect to the purchase of all Subsequent
Contracts on the Payment Date on which the Funding Period ends (or on the
Payment Date on or immediately following the last day of the Funding Period if
the Funding Period does not end on a Payment Date) will be due and payable on
the Redemption Date, if any, pursuant to Section 10.01(b) of the Indenture
(referred to on the reverse hereof). If the Pre-Funded Amount at the end of the
Funding Period exceeds $100,000, the Issuer will pay a premium on this Note, on
the Redemption Date, in an amount equal to the result obtained by multiplying
(a) a fraction the numerator of which is [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $__________ by (b) the Class A-5
Prepayment Premium. The Issuer will pay interest on this Note at the rate per
annum shown above on each Payment Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date). Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such Payment Date or, if no interest has yet been paid, from
____________, 199_. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest and premium, if any, on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest and premium, if any, on this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C-5-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
By______________________________________________
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement,
By______________________________________________
Name:
Title:
C-5-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
_____________________________________________ ,
not in its individual capacity but solely as
Trustee,
By___________________________________________
Authorized Signatory
C-5-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ______% Class A-5 Asset Contracts-Backed Notes (herein called
the "Notes"), all issued under an Indenture dated as of ____________, 199_ (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and _________________________, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-5 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ___________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.01(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the Trustee
or the Holders of the Notes representing at least 66-2/3% of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. All principal payments on
the Class A-5 Notes shall be made pro rata to the Class A-5 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by
C-5-5
<PAGE>
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) affected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date with respect to the Payment Date immediately preceding such
Redemption Date by notice mailed within five days of such Redemption Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-5 Interest Rate to the extent lawful.
Payments of premium, if any, on this Note will be payable on the
related Redemption Date in an amount described on the face hereof.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.01(a) of the Indenture, in whole, but not in part, at the option
of the Seller or the Servicer on any Payment Date on or after the date on which
the Aggregate Principal Balance is less than or equal to 10% of the Original
Pool Balance, and (b) pursuant to Section 10.01(b) of the Indenture, in part, on
a pro rata basis, on the Payment Date on or immediately following the last day
of the Funding Period in the event that any amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any
C-5-6
<PAGE>
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
C-5-7
<PAGE>
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of each class of
Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither ___________________________ in its
individual capacity, any owner of a beneficiary interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purpose of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of
C-5-8
<PAGE>
this Note by the acceptance hereof agrees that except as expressly provided in
the Related Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
C-5-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto_______________________________________________________________
_____________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ______________________________________________________________________**
Signature Guaranteed:
--------------------------------------
___________________________________
- --------------------------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C-5-10
<PAGE>
EXHIBIT C-6
REGISTERED $ /******/
---------------------------------
No. R
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO.__________________________
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
______% CLASS A-6 ASSET CONTRACTS-BACKED NOTE
Green Tree Asset Receivables Trust, 199_-_, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to [
], or registered assigns, the principal sum of [
] payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $[INSERT INITIAL PRINCIPAL
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the Class A-6 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the __________________ Payment Date (the
"Final Scheduled Distribution Date") and the Redemption Date, if any, pursuant
to Section 10.01(a) and (c) of the Indenture referred to on the reverse hereof;
provided further, that a portion of the principal amount of this Note in an
amount equal to the result obtained by multiplying (i) a fraction the numerator
of which is [INSERT INITIAL PRINCIPAL
- ----------------------
/******/Denominations of $1,000 and integral multiples thereof.
C-6-1
<PAGE>
AMOUNT OF NOTE] and the denominator of which is $__________ by (ii) the Class
A-6 Prepayment Amount, after giving effect to the purchase of all Subsequent
Contracts on the Payment Date on which the Funding Period ends (or on the
Payment Date on or immediately following the last day of the Funding Period if
the Funding Period does not end on a Payment Date) will be due and payable on
the Redemption Date, if any, pursuant to Section 10.01(b) of the Indenture
(referred to on the reverse hereof). If the Pre-Funded Amount at the end of the
Funding Period exceeds $100,000, the Issuer will pay a premium on this Note, on
the Redemption Date, in an amount equal to the result obtained by multiplying
(a) a fraction the numerator of which is [INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $__________ by (b) the Class A-6
Prepayment Premium. The Issuer will pay interest on this Note at the rate per
annum shown above on each Payment Date until the principal of this Note is paid
or made available for payment, on the principal amount of this Note outstanding
on the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date). Interest on this Note will accrue for each
Payment Date from the most recent Payment Date on which interest has been paid
to but excluding such Payment Date or, if no interest has yet been paid, from
____________, 199_. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. Such principal of and interest and premium, if any, on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest and premium, if any, on this Note are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. All
payments made by the Issuer with respect to this Note shall be applied first to
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C-6-2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: GREEN TREE ASSET RECEIVABLES TRUST, 199_-_
By ____________________________________________
not in its individual capacity but solely as
Owner Trustee under the Trust Agreement,
By ____________________________________________
Name:
Title:
C-6-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
______________________________________________
not in its individual capacity but solely as
Trustee,
By ___________________________________________
Authorized Signatory
C-6-4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ______% Class A-6 Asset Contracts-Backed Notes (herein called
the "Notes"), all issued under an Indenture dated as of ____________, 199_ (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and _________________________, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Trustee and the
Holders of the Notes. The Notes are subject to all terms of the Indenture. All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes and the Class A-6 Notes (collectively, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-6 Notes will be payable on each Payment Date
in an amount described on the face hereof. "Payment Date" means the fifteenth
day of each month, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing ___________, 199_.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Distribution Date
and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(c) of the
Indenture. As described above, a portion of the unpaid principal balance of this
Note shall be due and payable on the Redemption Date, if any, pursuant to
Section 10.01(b) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the Trustee
or the Holders of the Notes representing at least 66-2/3% of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. All principal payments on
the Class A-6 Notes shall be made pro rata to the Class A-6 Noteholders entitled
thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by
C-6-5
<PAGE>
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment. Any reduction in the principal amount of this Note (or any one or more
Predecessor Notes) affected by any payments made on any Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Trustee, in the name of and on behalf of
the Issuer, will notify the Person who was the Registered Holder hereof as of
the Record Date with respect to the Payment Date immediately preceding such
Redemption Date by notice mailed within five days of such Redemption Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Trustee's principal Corporate Trust Office or at
the office of the Trustee's agent appointed for such purposes located in The
City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-6 Interest Rate to the extent lawful.
Payments of premium, if any, on this Note will be payable on the
related Redemption Date in an amount described on the face hereof.
As provided in the Indenture, the Notes may be redeemed (a) pursuant
to Section 10.01(a) of the Indenture, in whole, but not in part, at the option
of the Seller or the Servicer on any Payment Date on or after the date on which
the Aggregate Principal Balance is less than or equal to 10% of the Original
Pool Balance, and (b) pursuant to Section 10.01(b) of the Indenture, in part, on
a pro rata basis, on the Payment Date on or immediately following the last day
of the Funding Period in the event that any amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Contracts, including any such purchase on such Redemption Date.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any
C-6-6
<PAGE>
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Seller, the Issuer or any
General Partner, or join in any institution against the Seller, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
C-6-7
<PAGE>
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Security Insurer and of the Holders
of Notes representing a majority of the Outstanding Amount of each class of
Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Related Documents, neither ___________________________ in its
individual capacity, any owner of a beneficiary interest in the Issuer, nor any
of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purpose of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of
C-6-8
<PAGE>
this Note by the acceptance hereof agrees that except as expressly provided in
the Related Documents, in the case of an Event of Default under the Indenture,
the Holder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
C-6-9
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________________________________________
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ______________________________________________________________________**
Signature Guaranteed:
---------------------------------------
- ----------------------------
- ------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C-6-10
<PAGE>
EXHIBIT D
Form of Note Policy
D-1
<PAGE>
EXHIBIT E
Letter Agreement between the Seller and the Trustee and Other Fee Letters
E-1
