<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 8, 1995
REGISTRATION NO. 33-62433
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
(ISSUER WITH RESPECT TO OFFERED CERTIFICATES)
GREEN TREE FLOORPLAN FUNDING CORP.
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
DELAWARE 9999 APPLIED FOR
(STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
500 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 RENWICK D. MARTIN
DORSEY & WHITNEY P.L.L.P. BROWN & WOOD
220 SOUTH SIXTH STREET, MINNEAPOLIS, ONE WORLD TRADE CENTER, NEW YORK, NEW
MINNESOTA 55402 YORK 10048
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If 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, check the following box. [_]
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(c)
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. [_]
--------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Floorplan Receivable
Trust Certificates,
Series 1995-1........ $400,000,000 100% $400,000,000 $137,931.04(2)
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the proposed maximum aggregate offering price, pursuant to
Rule 457(c).
(2) Of this amount, $344.83 has previously been paid and $137,586.21 is being
paid herewith.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM AND CAPTION IN FORM S-1 CAPTION IN PROSPECTUS
---------------------------- ---------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front Forepart of Registration Statement; Outside
Cover Page of Prospectus... Front Cover Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of Pro- Inside Front Cover Page; Outside Back Cover
spectus.................... Page of Prospectus
3. Summary Information, Risk
Factors and Ratio of Earn-
ings to Fixed Charges...... Prospectus Summary; Risk Factors
4. Use of Proceeds............. Use of Proceeds
5. Determination of Offering
Price...................... *
6. Dilution.................... *
7. Selling Security Holders.... *
8. Plan of Distribution........ Underwriting
9. Description of Securities to The Trust; The Transferor; The Receivables;
be Registered.............. Description of the Offered Certificates
10. Interests of Named Experts
and Counsel................ Legal Matters
11. Information with Respect to
the Registrant............. The Trust; The Transferor
12. Disclosure of Commission Po-
sition on Indemnification
for Securities Act Liabili-
ties....................... See Part II
</TABLE>
- --------
*Not applicable
<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 NOVEMBER , 1995
PROSPECTUS
LOGO
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
$ FLOATING RATE FLOORPLAN RECEIVABLE TRUST CERTIFICATES, SERIES 1995-1,
CLASS A
$ FLOATING RATE FLOORPLAN RECEIVABLE TRUST CERTIFICATES, SERIES 1995-1,
CLASS B
GREEN TREE FLOORPLAN GREEN TREE FINANCIAL CORPORATION
FUNDING CORP.
TRANSFEROR SERVICER
-----------
Each of the Floating Rate Floorplan Receivable Trust Certificates, Series
1995-1, Class A (the "Class A Certificates") and each of the Floating Rate
Floorplan Receivable Trust Certificates, Series 1995-1, Class B (the "Class B
Certificates," and, together with the Class A Certificates, the "Offered
Certificates") will represent an undivided interest in the Green Tree Floorplan
Receivables Master Trust (the "Trust"), created pursuant to a Pooling and
Servicing Agreement among Green Tree Floorplan Funding Corp., as transferor
(the "Transferor"), Green Tree Financial Corporation, as servicer ("Green Tree"
or the "Servicer") and , as trustee (the "Trustee"). The fractional
undivided interests in the Trust represented by the Class B Certificates will
be subordinated to fund certain payments with respect to the Class A
Certificates as described in "Description of the Offered Certificates--
Application of Collections," "--Reallocated Principal Collections," and "--
Investor Charge-Offs." The assets of the Trust will include wholesale
receivables (the "Receivables"), generated from time to time in a portfolio of
revolving financing arrangements (the "Accounts") with dealers, manufacturers
and distributors to finance their inventory of manufactured housing and other
consumer and commercial products and all monies due or to become due in payment
of such Receivables.
Concurrently with the issuance of the Offered Certificates, the Trust will
issue the Floorplan Receivable Trust Certificates, Series 1995-1, Class C (the
"Class C Certificates"), which may be privately placed, and the Floorplan
Receivable Trust Certificates, Series 1995-1, Class D (the "Class D
Certificates," and, together with the Class C Certificates and the Offered
Certificates, the "Certificates") to the Transferor. The Offered Certificates,
the Class C Certificates and the Class D Certificates constitute "Series 1995-
1." The fractional undivided interests in the Trust represented by the Class C
Certificates will be subordinated to fund certain payments with respect to the
Offered Certificates and the Class D Certificates will be subordinated to fund
certain payments with respect to the Class C Certificates and the Offered
Certificates as described in "Description of the Offered Certificates--
Application of Collections," "--Reallocated Principal Collections," and "--
Investor Charge-Offs." The Transferor will own the remaining undivided interest
in the Trust not represented by the Certificates and any other investor
certificates issued by the Trust, which retained interest will be represented
by the Exchangeable Transferor Certificate. The Exchangeable Transferor
Certificate will be held initially by the Transferor and will be transferable
only as provided in the Pooling and Servicing Agreement. The Transferor from
time to time may offer to the public or other investors under a prospectus or
other disclosure document in transactions either registered under the
Securities Act of 1933, as amended, or exempt from registration thereunder,
other series of certificates that evidence undivided interests in certain
assets of the Trust by exchanging a portion of its interest in the Trust
therefor. Only the Offered Certificates are being offered pursuant to this
Prospectus.
Interest on the outstanding principal balance of the Class A Certificates
will accrue at a rate per annum equal to the lesser of (i) the applicable one-
month LIBOR (calculated and determined as described under "Description of the
Offered Certificates--Interest Payments") plus % per annum or (ii) the Net
Receivables Rate (as defined under "Description of the Offered Certificates--
Interest") (the "Class A Certificate Rate"). Interest on the outstanding
principal balance of the Class B Certificates will accrue at a rate per annum
equal to the lesser of (i) the applicable one-month LIBOR plus % per annum or
(ii) the Net Receivables Rate (as defined under "Description of the Offered
Certificates--Interest") (the "Class B Certificate Rate"). Interest with
respect to the Certificates will be distributed on December 15, 1995 and on the
15th day of each month thereafter (or, if such 15th day is not a business day,
the next succeeding business day) (each, a "Distribution Date"). Principal on
the Class A Certificates is scheduled to be distributed on each Distribution
Date commencing on the Distribution Date in but may be paid earlier
under certain limited circumstances described herein. Principal on the Class B
Certificates will be payable monthly on each Distribution Date on or after the
Distribution Date on which the Class A Invested Amount is paid in full.
Application will be made to list the Offered Certificates on the Luxembourg
Stock Exchange.
There currently is no secondary market for the Offered Certificates, and
there is no assurance that one will develop or, if one does develop, that it
will continue until the Offered Certificates are paid in full.
-----------
POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET
FORTH IN "RISK FACTORS" ON PAGES 23 THROUGH 28 HEREIN.
-----------
THE OFFERED CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF THE TRANSFEROR, GREEN
TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF. NEITHER THE
OFFERED CERTIFICATES NOR THE RECEIVABLES ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRE-
SENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING THE
PUBLIC(1) DISCOUNT TRANSFEROR(1)(2)
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<S> <C> <C> <C>
Per Class A Certificate.............. % % %
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Per Class B Certificate.............. % % %
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Total................................ $ $ $
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</TABLE>
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(1) Plus accrued interest, if any, from , 1995.
(2) Before deduction of expenses estimated to be $ .
-----------
The Offered Certificates are offered by the Underwriters as described in
"Underwriting," subject to prior sale, when, as and if issued to and accepted
by the Underwriters and subject to approval of certain legal matters by counsel
for the Underwriters. The Underwriters reserve the right to reject orders in
whole or in part. It is expected that the Offered Certificates will be
delivered in book-entry form on or about , 1995 through the facilities
of The Depository Trust Company, CEDEL S.A. and the Euroclear System.
-----------
MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC.
-----------
The date of this Prospectus is , 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates (as defined herein) are issued,
monthly and annual reports, containing information concerning the Trust and
prepared by the Servicer, will be sent on behalf of the Trust to Cede & Co., as
nominee of The Depository Trust Company ("DTC") and registered holder of the
Offered Certificates, pursuant to the Pooling and Servicing Agreement (as
defined herein). All references herein to "holders" or "Certificateholders" in
respect of the Offered Certificates reflect the rights of the owners of the
beneficial interests in the Offered Certificates ("Certificate Owners") as they
may indirectly exercise such rights through DTC and its participants, except as
otherwise specified herein. Neither Green Tree Financial Corporation nor any
successor servicer intends to send any of such monthly and annual reports to
Certificate Owners. See "Description of the Offered Certificates--Book-Entry
Registration," "--Reports to Certificateholders" and "--Evidence as to
Compliance." Certificate Owners may receive such reports upon written request,
together with (i) a certification that they are Certificate Owners and (ii)
payment of any expenses associated with the distribution of such reports, from
the Trustee at , Attention: . Such reports
will not constitute financial statements prepared in accordance with generally
accepted accounting principles. The Servicer will file with the Securities and
Exchange Commission (the "Commission") such periodic reports with respect to
the Trust as are required under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the Commission
thereunder.
AVAILABLE INFORMATION
Green Tree Floorplan Funding Corp., as originator of the Trust, has filed a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with the Commission on behalf of the Trust with respect to
the Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
public references facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New York 10048,
Suite 1300; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of the Registration Statement and amendments thereof and
exhibits thereto may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Periodic reports with respect to the Trust that have been filed under
the Exchange Act and the rules and regulations of the Commission thereunder and
other information filed by the Servicer can be inspected and copied at the
public reference facilities maintained by the Commission referred to above.
OTHER INFORMATION
Upon receipt of a request by an investor who has received an electronic
Prospectus from an Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a Prospectus,
the Transferor or such Underwriter will promptly deliver, or cause to be
delivered, without charge, a paper copy of the Prospectus.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain
capitalized terms used herein are defined in the "Glossary of Terms" or
elsewhere in this Prospectus. Unless the context requires otherwise, certain
capitalized terms, when used in this Prospectus, relate only to the Series
1995-1 Certificates and not to other certificates which may exist from time to
time.
Offered Certificates......... $ aggregate principal amount of Class A
Certificates and $ aggregate principal
amount of Class B Certificates are being of-
fered hereby. The Offered Certificates will be
available for purchase in minimum denominations
of $1,000 and in integral multiples of $1,000
in excess thereof.
The Offered Certificates represent obligations
of the Trust only and do not represent inter-
ests in or recourse obligations of Green Tree,
the Transferor, or any affiliate of either of
them.
The Class B Certificates will be subordinated to
fund certain payments with respect to the Class
A Certificates as described herein. See "De-
scription of the Offered Certificates--Subordi-
nation of the Class B Certificates."
Other Series 1995-1 $ aggregate principal amount of Class C
Certificates............... Certificates, which may be privately placed,
and $ aggregate principal amount of
Class D Certificates, which are being issued
concurrently to the Transferor. Only the Of-
fered Certificates are being offered pursuant
to this Prospectus.
Transferor...................
Green Tree Floorplan Funding Corp., a wholly
owned subsidiary of Green Tree, is the Trans-
feror. The principal executive offices of the
Transferor are located at 500 Landmark Towers,
345 St. Peter Street, St. Paul, Minnesota
55102-1639, telephone number (612) 293-3400.
See "The Transferor."
Servicer.....................
Green Tree Financial Corporation (in such capac-
ity, "Green Tree" or the "Servicer"). The prin-
cipal executive offices of the Servicer are lo-
cated at 1100 Landmark Towers, 345 St. Peter
Street, St. Paul, Minnesota 55102-1639, tele-
phone number (612) 293-3400. A substitute
Servicer may be appointed in certain circum-
stances. See "Green Tree Financial Corporation
and its Commercial Finance Division" and "De-
scription of the Offered Certificates--Certain
Matters Regarding the Transferor and the
Servicer."
Trustee .....................
, is the Trustee. Under
certain circumstances specified herein, the
beneficial owners of investor certificates rep-
resenting more than 50% of the aggregate in-
vested amount of all Series will have the right
to remove the Trustee. See "Description of the
Offered Certificates--The Trustee."
Trust........................ The Trust will be formed pursuant to the Pooling
and Servicing Agreement, which will be supple-
mented by the Series 1995-1
3
<PAGE>
Supplement relating to the Series 1995-1 Cer-
tificates, and by Supplements applicable to
other Series that may be issued in the future.
See "The Trust."
Trust Assets.................
The Trust assets will include (i) all Receiv-
ables existing as of the Cut-Off Date and
thereafter arising under the Accounts from time
to time satisfying certain criteria described
herein (see "The Receivables--Eligible Receiv-
ables and Eligible Accounts"), (ii) all funds
to be collected in respect of the Receivables,
(iii) all the rights of the Transferor under
the Receivables Purchase Agreement between the
Transferor and Green Tree (the "Purchase Agree-
ment"), (iv) all funds on deposit in certain
accounts of the Trust, (v) any amounts received
by the Servicer with respect to Receivables
that were previously charged off as uncollecti-
ble ("Recoveries"), (vi) an assignment of a se-
curity interest in the consumer and commercial
products or other assets securing each Receiv-
able (collectively, the "Collateral Security"),
(vii) the Transferor's rights under all
Floorplan Agreements with manufacturers relat-
ing to the Collateral Security, and (viii) all
proceeds of the foregoing. The Offered Certifi-
cates will not have the benefit of any credit
enhancement other than the subordination of the
Class B Certificates, Class C Certificates and
Class D Certificates for the benefit of each
Class of Series 1995-1 Certificates with an
earlier alphabetical designation as described
above.
Pursuant to the Purchase Agreement, the Trans-
feror will purchase from Green Tree all of the
Receivables arising from time to time under the
Accounts, whether such Receivables are existing
as of the Cut-off Date or thereafter created.
See "Description of the Purchase Agreement--
Purchases of Receivables."
Pursuant to the Pooling and Servicing Agreement,
the Transferor will automatically transfer to
the Trust all of its right, title, and interest
in and to the Receivables. See "Risk Factors--
Transfer of the Receivables; Insolvency Risk
Considerations" for a discussion of certain le-
gal considerations relating to such transfer.
The Accounts.................
The Accounts pursuant to which the Receivables
will be generated are revolving credit agree-
ments entered into with Green Tree by dealers
located in the United States to finance their
consumer and commercial product inventory
("Floorplan Receivables") or by manufacturers
or distributors located in the United States to
finance their inventory, finished parts or
other assets ("Asset-Based Receivables") (such
dealers, manufacturers and distributors being
referred to as "Dealers"). Such products may
include, among others: manufactured housing,
recreational vehicles and marine products.
Green Tree expects that the types of products
financed will expand over time, and that the
relative proportions of the various products
financed
4
<PAGE>
by the Receivables will change over time. The
Accounts will be selected from all such credit
agreements of Green Tree that meet the credit
criteria specified in the Pooling and Servicing
Agreement and the related Series Supplement
(the "Eligible Accounts"). Under certain cir-
cumstances Accounts may be added to, or removed
from, the Trust, and the Transferor expects to
add additional Accounts to the Trust from time
to time. See "Description of Certificates--Rep-
resentations and Warranties," "--Addition of
Accounts" and "--Removal of Accounts."
Receivables..................
The Receivables have arisen or will arise in the
Accounts. The Receivables will bear interest at
an adjustable rate described herein. Certain
Receivables do not bear interest for a speci-
fied period following their origination. Gener-
ally, the principal amount of a Receivable is
due (i) in the case of Floorplan Receivables,
in scheduled installments with payment in full
due upon the retail sale of the related prod-
uct, or (ii) in the case of Asset-Based Receiv-
ables, upon the reduction of eligible collat-
eral or as the borrower's needs decline, and in
full upon the termination of the facility. Ac-
cordingly, the amount of Receivables will fluc-
tuate from day to day as new Receivables are
generated and as existing Receivables are col-
lected, written off as uncollectible, or other-
wise adjusted. See "Green Tree Financial Corpo-
ration and its Commercial Finance Division."
Collections..................
The Servicer will deposit all collections of Re-
ceivables (other than collections allocable to
the Exchangeable Transferor Certificate, sub-
ject to certain exceptions specified herein) in
the Collection Account on each Business Day.
The aggregate of (A) all collections on the Re-
ceivables with respect to interest or other
fees, (B) investment earnings on amounts on de-
posit in all Trust Accounts on such business
day and (C) Recoveries will be treated as "Fi-
nance Charge Collections." In addition, in or-
der to provide additional yield to the Trust to
offset the effect of any increase in Receiv-
ables that do not bear interest for a specified
period, any increase in the length of such a
period or any decrease in the level of interest
rates borne by the Receivables, the Transferor
may elect at any time to instruct the Servicer
to allocate a specified percentage (the "Dis-
count Factor") of Principal Collections to be
treated as interest collections ("Imputed Yield
Collections"). The Discount Factor, if any, may
vary from time to time, and initially will be
zero. Finance Charge Collections and Imputed
Yield Collections, if any, are collectively re-
ferred to as "Interest Collections." The re-
mainder of the collections on the Receivables
received on any business day will be treated as
"Principal Collections." Principal Collections
and Interest Collections are collectively some-
times referred to herein as "Collections." See
"Description of the Offered Certificates--In-
terest Collections; Principal Collections." All
such amounts will then be
5
<PAGE>
allocated in accordance with the respective in-
terests of the Certificateholders, the
certificateholders of any other Series, and the
holder of the Exchangeable Transferor Certifi-
cate in the Principal Receivables and in the
Interest Collections Receivables in the Trust.
During the Revolving Period, upon the retail
sale of a product securing a Receivable where
Green Tree is providing the customer financing
for such retail sale, Green Tree will not be
obligated to deposit cash in the Collection Ac-
count in respect of the principal amount of
such Receivable but may instead replace such
Receivable with other Receivables. See "De-
scription of the Offered Certificates--Alloca-
tion Percentages."
The Series 1995-1
Certificates
A. Class A Certificates.... The Class A Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class A Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest
on the Class A Certificates at the Class A Cer-
tificate Rate and the payment of principal to
the extent of the Class A Invested Amount
(which may be less than the aggregate unpaid
principal amount of the Class A Certificates,
in certain circumstances, if the Investor De-
fault Amount exceeds funds allocable thereto
and the Class B Invested Amount, the Class C
Invested Amount and the Class D Invested Amount
are reduced to zero). See "Description of the
Offered Certificates--Subordination of the
Class B Certificates," "--Allocation Percent-
ages" and "--Investor Charge-Offs."
B. Class B Certificates.... The Class B Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class B Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest
on the Class B Certificates at the Class B Cer-
tificate Rate and the payment of principal to
the extent of the Class B Invested Amount
(which may be less than the aggregate unpaid
principal amount of the Class B Certificates,
in certain circumstances, if the Investor De-
fault Amount exceeds funds allocable thereto
and the Class C Invested Amount and the Class D
Invested Amount are reduced to zero). See "De-
scription of the Offered Certificates--Subordi-
nation of the Class B Certificates," "--Alloca-
tion Percentages" and "--Investor Charge-Offs."
The Class C Certificates will evidence undivided
C. Class C Certificates.... interests in the assets of the Trust allocated
to the Class C Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest
on the Class C Certificates at the Class C Cer-
tificate Rate, the payment of principal to the
extent
6
<PAGE>
of the Class C Invested Amount (which may be
less than the aggregate unpaid principal amount
of the Class C Certificates, in certain circum-
stances, if the Investor Default Amount exceeds
funds allocable thereto and the Class D In-
vested Amount is reduced to zero, and rights to
receive payments under a Limited Guaranty of
Green Tree for the benefit of the Class C
Certificateholders). See "Description of the
Offered Certificates--Allocation Percentages"
and "--Investor Charge-Offs." The Class C Cer-
tificates are not being offered hereby.
D. Class D Certificates.... The Class D Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class D Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of principal
to the extent of the Class D Invested Amount.
The Class D Invested Amount may be adjusted
from time to time, as described under "Descrip-
tion of the Offered Certificates--The
Overconcentration Amounts." The Class D Certif-
icates are not being offered hereby.
Transferor Interest.......... The Pooling and Servicing Agreement provides
that the Trustee will issue two types of cer-
tificates: (i) investor certificates in one or
more Series, each of which may have multiple
classes and of which one or more such classes
may be transferable, and (ii) the Exchangeable
Transferor Certificate. The Exchangeable Trans-
feror Certificate will evidence the Transferor
Interest, will be held by the Transferor, and
will be transferable only as provided in the
Pooling and Servicing Agreement, including
through the issuance of a Supplemental Certifi-
cate.
Issuance of New Series....... The Pooling and Servicing Agreement provides
that, pursuant to any one or more supplements
thereto (each, a "Supplement"), the Transferor
may cause the Trustee to issue one or more new
Series of certificates (a "New Issuance"). The
Transferor may create a New Issuance either by
transferring a sufficient amount of Receivables
in Additional Accounts to the Trust or pursuant
to an Exchange (described below). The Trans-
feror may offer any Series for sale in transac-
tions either registered under the Securities
Act or exempt from registration thereunder, di-
rectly or through one or more underwriters or
placement agents, in fixed-price offerings, in
negotiated transactions or otherwise. The
Transferor currently intends to offer, from
time to time, additional Series issued by the
Trust.
Exchanges....................
The Pooling and Servicing Agreement provides
that, pursuant to any one or more Supplements
to the Pooling and Servicing Agreement, the
Transferor may tender the Exchangeable Trans-
feror Certificate or, if provided in the rele-
vant Supplement, certificates comprising any
Series and the Exchangeable Transferor Certifi-
cate, to the Trustee in exchange for certifi-
cates comprising one or more new Series and a
reissued Ex
7
<PAGE>
changeable Transferor Certificate (an "Ex-
change"). Any Exchange will be subject to cer-
tain conditions specified in the Pooling and
Servicing Agreement, including the requirement
that at all times, the interest in the Princi-
pal Receivables in the Trust (plus amounts on
deposit in the Excess Funding Account, if any)
represented by the Transferor Interest must
equal or exceed the Minimum Transferor Inter-
est. See "Description of the Offered Certifi-
cates--Exchanges."
Interest.....................
Interest on the respective outstanding balance
of each Class of Series 1995-1 Certificates
(other than the Class D Certificates) will ac-
crue at the applicable Certificate Rate (as de-
fined below) and will be payable on the 15th
day of each month, or if such day is not a
business day, on the next succeeding business
day (each a "Distribution Date"), beginning De-
cember 15, 1995. Interest will accrue from and
including the preceding Distribution Date (or,
in the case of the first Distribution Date,
from and including the Closing Date) to but ex-
cluding such Distribution Date (each an "Inter-
est Accrual Period") and will be calculated on
the basis of the actual number of days in the
related Interest Accrual Period divided by 360.
Interest on the outstanding principal balance of
the Class A Certificates will accrue for each
Interest Accrual Period at a rate per annum
equal to the lesser of (i) one-month LIBOR
(calculated as described under "Description of
the Offered Certificates--Interest Payments")
determined as of the second LIBOR business day
prior to such Interest Accrual Period plus %
per annum or (ii) the Net Receivables Rate (as
described under "Description of the Offered
Certificates--Interest") (the "Class A Certifi-
cate Rate"). Interest on the outstanding prin-
cipal balance of the Class B Certificates will
accrue for each Interest Accrual Period at a
rate per annum equal to the lesser of (i) one-
month LIBOR determined as of the second LIBOR
business day prior to such Interest Accrual Pe-
riod plus % per annum or (ii) the Net Re-
ceivables Rate (the "Class B Certificate Rate"
and together with the Class A Certificate Rate,
the "Certificate Rates"). The Class C Certifi-
cates will bear interest at a rate equal to a
specified margin in excess of LIBOR.
Interest payments on the Series 1995-1 Certifi-
cates will be made from Series Available Inter-
est Collections, as described under "Descrip-
tion of the Offered Certificates--Application
of Collections--Payment of Fees, Interest and
Other Items," and from certain other funds al-
located for such purpose under the Pooling and
Servicing Agreement. See "Description of the
Offered Certificates--Reallocated Principal
Collections."
Revolving Period.............
The "Revolving Period" with respect to Series
1995-1 means the period from and including the
Closing Date to, but not including, the earlier
of (a) the Initial Principal Payment Date (de
8
<PAGE>
scribed below), (b) the commencement of the
Controlled Accumulation Period (described be-
low) and (c) the commencement of the Early Am-
ortization Period. During the Revolving Period,
Principal Collections otherwise allocable to
the Certificateholders (other than any Reallo-
cated Principal Collections applied to make in-
terest distributions) will, subject to certain
limitations, be paid from the Trust to the
holder of the Exchangeable Transferor Certifi-
cate or applied as Shared Principal Collections
and paid to holders of certificates of other
series, as described below under "Shared Prin-
cipal Collections."
The aggregate principal amount of the Series
1995-1 Certificates, except as otherwise pro-
vided herein, will remain fixed during the Re-
volving Period.
Principal Payments
A. Initial Principal
Payment Date.......
Unless an Early Amortization Event has occurred,
principal with respect to the Class A Certifi-
cates is expected to be paid on the Class A
Scheduled Payment Date, and principal with re-
spect to the Class B Certificates is expected
to be paid on the Class B Scheduled Payment
Date. However, if the Servicer elects not to
extend the Initial Principal Payment Date, the
revolving Period or the Controlled Accumulation
Period, as applicable, will end and principal
will be paid to the Class A Certificateholders
on the Payment Date and, if necessary, on each
Distribution Date thereafter until the earlier
of the date on which the Class A Invested
Amount has been paid in full or the Series
1995-1 Termination Date, and after the Class A
Invested Amount has been paid in full, princi-
pal will be paid to the Class B
Certificateholders on each Distribution Date
until the earlier of the date on which the
Class B Invested Amount has been paid in full
or the Series 1995-1 Termination Date. The
"Initial Principal Payment Date" will initially
be the December 1997 Distribution Date, but
will successively and automatically be extended
to the next Distribution Date after the then-
current Initial Principal Payment Date unless
the Servicer elects not to so extend; provided
that the Initial Principal Payment Date may not
be later than the Class A Scheduled Payment
Date. See "Description of the Offered Certifi-
cates--Extension of Initial Principal Payment
Date" herein.
B. Controlled Accumulation
Period.............
On September 15, 1998, the Servicer will deter-
mine the Accumulation Period Length. The "Accu-
mulation Period Length" will be one, two, three
or four month(s) and will be calculated as the
product, rounded upwards to the nearest inte-
ger, of (a) four and (b) a fraction, the numer-
ator of which is the Invested Amount as of Sep-
tember 15, 1998 (after giving effect to all
changes therein on such date) and the denomina-
tor of which
9
<PAGE>
is the sum of such Invested Amount and the in-
vested amounts as of September 15, 1998 (after
giving effect to all changes therein on such
date) of all other outstanding Series whose re-
spective revolving periods are not scheduled to
end before the last day of the January 1999
Monthly Period. If the Accumulation Period
Length is one month, two months, three months
or four months, the "Accumulation Period Com-
mencement Date" will be the first day of the
January 1999 Collection Period, the December
1998 Collection Period, the November 1998 Col-
lection Period or the October 1998 Collection
Period, respectively. Notwithstanding the fore-
going, the Accumulation Period Commencement
Date will be October 1, 1998 if, prior to such
date, any other outstanding Series has entered
into an early amortization period. In addition,
if the Accumulation Period Length has been de-
termined to be less than four months and,
thereafter, any outstanding Series enters into
an early amortization period, the Accumulation
Period Commencement Date will be the earlier of
(i) the date that such outstanding Series en-
tered into its early amortization period and
(ii) the Accumulation Period Commencement Date
as previously determined.
The Controlled Accumulation Period will end on
the earliest of (i) the commencement of the
Early Amortization Period, (ii) the Initial
Principal Payment Date, (iii) payment of the
Investor Interest in full and (iv) the Series
1995-1 Termination Date.
On each business day during the Controlled Accu-
mulation Period, prior to the payment of the
Class A Invested Amount in full, the Servicer
will deposit into an account established for
the Certificateholders (the "Principal Ac-
count") an amount equal to the lesser of (a)
Principal Collections allocable to the Class A,
Class B and Class C Certificateholders' Inter-
ests plus Shared Principal Collections, if any,
from other Series allocable to the Class A,
Class B and Class C Certificates, plus certain
other amounts comprising Class A, Class B and
Class C Principal, and (b) the amount, if any,
by which (i) the sum of the Controlled Accumu-
lation Amount for such Monthly Period plus the
Accumulation Shortfall (described below), if
any (such sum being referred to as the "Con-
trolled Deposit Amount" for the related Monthly
Period) exceeds (ii) the amount in the princi-
pal account for the account of the Class A
Certificateholders.
On each business day during the Controlled Accu-
mulation Period, following the payment (or de-
posit in the Principal Account) of the Class A
Invested Amount in full but prior to the pay-
ment (or deposit in the Principal Account) of
the Class B Invested Amount in full, an amount
equal to the lesser of (a) Principal Collec-
tions allocable to the Class B and Class C
Certificateholders' Interests plus Shared Prin-
cipal Collections, if any, from other Series
allocable to the Class B and Class C
10
<PAGE>
Certificates, plus certain other amounts com-
prising Class B and Class C Principal, and (b)
the amount, if any, by which (i) the Controlled
Deposit Amount for the related Monthly Period
exceeds (ii) the amount in the Principal Ac-
count for the account of the Class B
Certificateholders, will be deposited daily in
the Principal Account.
On any business day when the amount on deposit
in the Principal Account equals or exceeds the
Controlled Deposit Amount for the related Dis-
tribution Date, the balance of all such funds
remaining on deposit in the Collection Account
will be treated as Shared Principal Collections
and may be used to make payments on other Se-
ries or classes of such Series that may be ac-
cumulating principal or amortizing.
If, for any Monthly Period, the amount deposited
in the Principal Account is less than the Con-
trolled Deposit Amount, the amount of such de-
ficiency will be the "Accumulation Shortfall"
for the succeeding Monthly Period.
All funds on deposit in the Principal Account
will be invested at the direction of the
Servicer by the Trustee in certain Permitted
Investments. Investment earnings (net of in-
vestment losses and expenses) on funds on de-
posit in the Principal Account (the "Principal
Investment Proceeds") during the Controlled Ac-
cumulation Period will be treated as Available
Series Interest Collections. Amounts, if any,
in the Principal Account may be expected to
earn interest at a rate that is less than the
"Base Rate," which is equal to the sum of the
weighted average of the Class A Certificate
Rate, the Class B Certificate Rate and the
Class C Certificate Rate plus 2%. The differ-
ence between the amount of interest actually
earned on investments in the Principal Account
on any day and the amount of interest that
would have been earned on such investments at
the Base Rate is the "Principal Funding Invest-
ment Shortfall" for such day. On each business
day, the Servicer will apply an amount equal to
the lesser of (i) the Series Allocation Per-
centage of the Interest Collections allocable
to the Transferor Interest ("Transferor Inter-
est Collections") on such business day and (ii)
the Principal Funding Investment Shortfall plus
the Negative Carry Amount (described below un-
der "Excess Funding Account"), if any, for such
business day, in the manner specified for ap-
plication of Available Series Interest Collec-
tions.
Funds on deposit in the Principal Account will
be available to pay the Class A
Certificateholders the Class A Invested Amount
on the Class A Scheduled Payment Date. If the
aggregate principal amount of deposits made to
the Principal Account is insufficient to pay
the Class A Invested Amount on the Class A
Scheduled Payment Date, the Early Amortization
Period will commence as described below. Al-
though it is anticipated that during the Con-
trolled Accumulation Period
11
<PAGE>
prior to the payment of the Class A Invested
Amount in full, funds will be deposited in the
Principal Account in an amount equal to the ap-
plicable Controlled Deposit Amount for each
Monthly Period and that scheduled principal
will be available for distribution to the Class
A Certificateholders on the Class A Scheduled
Payment Date, no assurance can be given in that
regard. See "Risk Factors--Certificate Rating"
and "Maturity Considerations."
On the Class B Scheduled Payment Date, provided
that the Class A Invested Amount is paid in
full on the Class A Scheduled Payment Date and
the Early Amortization Period has not com-
menced, Principal Collections will be paid to
the Class B Certificateholders in respect of
the Class B Invested Amount as described here-
in. If the Principal Collections are insuffi-
cient to pay the Class B Invested Amount in
full on the Class B Scheduled Payment Date, the
Early Amortization Period will commence as de-
scribed below. Although it is anticipated that
scheduled principal will be available for dis-
tribution to the Class B Certificateholders on
the Class B Scheduled Payment Date, no assur-
ance can be given in that regard. See "Risk
Factors--Certificate Rating" and "Maturity Con-
siderations."
If a Pay Out Event occurs during the Controlled
Accumulation Period, the Early Amortization Pe-
riod will commence and any amounts on deposit
in the Principal Account will be paid to the
Class A Certificateholders on the Distribution
Date in the month following the commencement of
the Early Amortization Period.
Other Series issued by the Trust may or have ei-
ther an accumulation period or an amortization
period. Such periods may have different lengths
and begin on different dates than the Con-
trolled Accumulation Period described herein.
Thus, certain Series may be in their revolving
periods while others are in their amortization
or accumulation periods. In addition, other Se-
ries may allocate Principal Collections based
upon different investor percentages. No Supple-
ment with respect to any such Series, however,
may change the terms of the Series 1995-1 Cer-
tificates or the terms of the Pooling and Ser-
vicing Agreement as it relates to the Offered
Certificates. See "Description of the Offered
Certificates--Exchanges" for a discussion of
the potential terms of other Series.
C. Early Amortization If a Pay Out Event occurs, either during the Re-
Period................. volving Period or the Controlled Accumulation
Period, the Early Amortization Period will be-
gin. During the Early Amortization Period,
Principal Collections allocable to the respec-
tive Certificateholders' Interest (other than
an interest represented by any class of in-
vestor certificates which is retained by the
Transferor (a "Transferor Retained Class")) and
certain other amounts (including Shared Princi-
pal Collections from any
12
<PAGE>
other Series and funds on deposit in the Excess
Funding Account, if any) will no longer be re-
invested in the Trust or otherwise used to
maintain the Certificateholders' Interest, but
instead will be distributed as principal pay-
ments monthly on each Distribution Date begin-
ning with the first Distribution Date following
the Monthly Period in which a Pay Out Event oc-
curs or is deemed to have occurred. Principal
payments would be made first to the Class A
Certificateholders until the Class A Invested
Amount has been paid in full, and then to the
Class B Certificateholders until the Class B
Invested Amount has been paid in full, and then
to the Class C Certificateholders until the
Class C Invested Amount has been paid in full,
and then to the Class D Certificateholders un-
til the Class D Invested Amount has been paid
in full. See "Description of the Offered Cer-
tificates--Pay Out Events."
Allocation of Trust Assets...
The Trust's assets will be allocated among the
Class A Certificateholders' Interest, the Class
B Certificateholders' Interest, the Class C
Certificateholders' Interest, the Class D
Certificateholders' Interest, the interest of
the certificateholders of any other Series is-
sued pursuant to the Pooling and Servicing
Agreement and applicable Supplements, and the
Transferor Interest. The interest of the
certificateholders of any class of any Series
in the assets of the Trust will be limited to
the certificateholders' interest for such class
and Series, and such certificateholders will
not have any recourse against any assets of the
Trust other than those allocated to such
certificateholders' interest pursuant to the
Pooling and Servicing Agreement and any appli-
cable Supplement. The Transferor Interest will
represent the right to the assets of the Trust
not allocated to the Series 1995-1
Certificateholders' interest or the interest of
the holders of certificates of any future Se-
ries pursuant to the Pooling and Servicing
Agreement and applicable Supplements. The prin-
cipal amount of the Transferor Interest will
fluctuate as the amount of Receivables in the
Trust, the invested amount of each Series, and
the amounts, if any, on deposit in the Excess
Funding Account change from time to time. See
"Description of the Offered Certificates--Gen-
eral" and "--Excess Funding Account."
The Class A Certificateholders' Interest, the
Class B Certificateholders' Interest, the Class
C Certificateholders' Interest, and the Class D
Certificateholders' Interest will each include
the right to receive (but only to the extent
needed to make required payments under the
Pooling and Servicing Agreement) varying per-
centages of Interest Collections and Principal
Collections during each Monthly Period. Inter-
est Collections and the amount of Defaulted Re-
ceivables will be allocated on each business
day, and Principal Collections will be allo-
cated on each business day during the Revolving
Period, to the Class A Certificateholders' In-
terest, the Class B Certificateholders' In
13
<PAGE>
terest, the Class C Certificateholders' Inter-
est, and the Class D Certificateholders' Inter-
est based on the Class A Floating Allocation
Percentage, the Class B Floating Allocation
Percentage, the Class C Floating Allocation
Percentage, and the Class D Floating Allocation
Percentage, respectively. During the Revolving
Period for each Series, all Principal Collec-
tions that would otherwise be allocated to the
Certificateholders will be allocated on each
business day and paid to the Transferor (except
for Shared Principal Collections used to make
payments to other Series). During the Con-
trolled Accumulation Period, until the Class A
Scheduled Payment Date, Principal Collections
will generally be allocated on each business
day to the Class A Certificateholders' Interest
based on the ABC Fixed/Floating Allocation Per-
centage. On and after the Class A Scheduled
Payment Date, Principal Collections will gener-
ally be allocated on each business day to the
Class B Certificateholders' Interest based on
the ABC Fixed/Floating Allocation Percentage.
On and after the Class B Scheduled Payment
Date, all Principal Collections will generally
be allocated on each business day to the Class
C Certificateholders' Interest based on the ABC
Fixed/ Floating Allocation Percentage. See "De-
scription of the Offered Certificates--Alloca-
tion Percentages."
Shared Principal
Collections................. To the extent that Principal Collections and
other amounts that are allocated to the
certificateholders' interest of any class of
any series (other than any Transferor Retained
Class) are not needed to make payments to the
certificateholders of such class or required to
be deposited in the Principal Account, they may
be applied to cover principal payments due to
or for the benefit of certificateholders of an-
other Series. Any such reallocation will not
result in a reduction in the certificate-
holders' interest of the Series to which such
Principal Collections were initially allocated.
As a result, Principal Collections and certain
other amounts otherwise allocable to other Se-
ries, to the extent such collections are not
needed to make payments to the
certificateholders of such other Series, may be
applied to cover principal payments due to or
for the benefit of the holders of the Series
1995-1 Certificates, and Principal Collections
and certain other amounts otherwise allocable
to the Series 1995-1 Certificates, to the ex-
tent such collections are not needed to make
payments to the Series 1995-1 Certificates, may
be applied to cover principal payments due to
or for the benefit of the holders of certifi-
cates of other Series. See "Description of the
Offered Certificates--Application of Collec-
tions."
Excess Funding Account.......
At any time during which the Transferor Interest
is less than the Minimum Transferor Interest,
funds (to the extent available therefor as de-
scribed herein) otherwise payable to the Trans-
feror will be deposited in the Excess Funding
Account on each
14
<PAGE>
business day until the Transferor Interest is
equal to the Minimum Transferor Interest. If
for any reason the Transferor Interest (plus
any funds on deposit in the Excess Funding Ac-
count) is less than the Minimum Transferor In-
terest, or if the amount of funds in the Excess
Funding Account exceeds certain threshholds for
a specified period of time, a Pay Out Event
would occur and the Early Amortization Period
would begin. Funds on deposit in the Excess
Funding Account will be withdrawn and paid to
the Transferor to the extent that on any day
the Transferor Interest exceeds the Minimum
Transferor Interest. No funds will be deposited
in the Excess Funding Account, however, if any
Series is in an amortization or accumulation
period (including any early amortization peri-
od), unless the principal account for such Se-
ries has been fully funded for such Monthly Pe-
riod.
Any funds on deposit in the Excess Funding Ac-
count at the beginning of the Controlled Accu-
mulation Period will be deposited in the Prin-
cipal Account. See "Description of the Offered
Certificates--Excess Funding Account."
Amounts, if any, in the Excess Funding Account
may be expected to earn interest at a rate that
is less than the Base Rate (described above un-
der "Principal Payments--B. Controlled Accumu-
lation Period"). The difference between the
amount of interest actually earned on invest-
ments in the Excess Funding Account on any day
and the amount of interest that would have been
earned on such investments at the Base Rate is
the "Negative Carry Amount" for such day. On
each business day, Servicer will apply an
amount equal to the lesser of (i) the Trans-
feror Interest Collections on such business day
and (ii) the Principal Funding Investment
Shortfall plus the Negative Carry Amount, if
any, for such business day, in the manner spec-
ified for application of Available Series In-
terest Collections.
Distribution of Available
Series Interest Collections
Allocable to
Certificateholders..........
Available Series Interest Collections will be
applied on each business day in a Monthly Pe-
riod in the following order of priority:
(i) an amount equal to the amount of Class A
Monthly Interest and any overdue Class A
Monthly Interest not previously deposited in
the Interest Funding Account for such
Monthly Period and interest on any overdue
interest amounts will be deposited in the
Interest Funding Account;
(ii) an amount equal to the amount of Class
B Monthly Interest and any overdue Class B
Monthly Interest not previously deposited in
the Interest Funding Account for such
Monthly Period and interest on any overdue
interest amounts will be deposited in the
Interest Funding Account;
15
<PAGE>
(iii) an amount equal to the amount of Class
C Monthly Interest and any overdue Class C
Monthly Interest not previously deposited in
the Interest Funding Account for such
Monthly Period and interest on any overdue
interest amounts will be deposited in the
Interest Funding Account;
(iv) if Green Tree or an affiliate of Green
Tree is not the Servicer, an amount equal to
the Monthly Servicing Fee plus any Monthly
Servicing Fee that was due but not paid on
any prior business day will be paid to the
Servicer;
(v) an amount equal to the ABC Investor
Default Amount on such business day and, to
the extent not previously paid, the ABC
Investor Default Amount for each prior
business day in such Monthly Period will be
(a) during the Revolving Period, treated as
Shared Principal Collections, (b) during the
Controlled Accumulation Period, deposited in
the Principal Account (up to the Controlled
Deposit Amount) or (c) during any Early
Amortization Period, deposited in the
Principal Account;
(vi) an amount equal to the Class D Investor
Default Amount on such business day and, to
the extent not previously paid, the Class D
Investor Default Amount for each prior
business day in such Monthly Period will be
(a) during the Revolving Period and the
Controlled Accumulation Period prior to the
payment in full of the Class C Invested
Amount, paid to the Transferor in order to
maintain the Class D Invested Amount, (b)
during the Controlled Accumulation Period
following the payment in full of the Class C
Invested Amount, paid to Class D
Certificateholders up to the Class D
Invested Amount;
(vii) an amount equal to unreimbursed Class
A Investor Charge-Offs on such business day
will be (a) during the Revolving Period,
treated as Shared Principal Collections, (b)
during the Controlled Accumulation Period,
on or prior to the Class B Scheduled Payment
Date, deposited in the Principal Account (up
to the Controlled Deposit Amount), or (c)
during any Early Amortization Period,
deposited in the Principal Account;
(viii) an amount equal to the accrued and un-
paid interest on the outstanding aggregate
principal amount of the Class B Certificates
not previously paid to the Class B
Certificateholders for such Monthly Period
will be deposited in the Interest Funding Ac-
count;
(ix) an amount equal to the accrued and un-
paid interest on the outstanding aggregate
principal amount of the Class C Certificates
not previously deposited in the Interest
Funding Account for such Monthly Period will
be deposited in the Interest Funding Account;
16
<PAGE>
(x) an amount equal to unreimbursed Class B
Investor Charge-Offs on such business day
will be (a) during the Revolving Period,
treated as Shared Principal Collections, (b)
during the Controlled Accumulation Period, on
or prior to the Class B Scheduled Payment
Date, deposited in the Principal Account (up
to the Controlled Deposit Amount) for the
Class A Certificateholders, (c) during the
Controlled Accumulation Period, on and after
the Class B Scheduled Payment Date, deposited
in the Principal Account (up to the Con-
trolled Deposit Amount) for the Class B
Certificateholders, or (d) during any Early
Amortization Period, deposited in the Princi-
pal Account;
(xi) an amount equal to unreimbursed Class C
Investor Charge-Offs on such business day
will be (a) during the Revolving Period,
treated as Shared Principal Collections, (b)
during the Controlled Accumulation Period, on
or prior to the Class B Principal Commence-
ment Date, deposited in the Principal Account
(up to the Controlled Deposit Amount) for the
Class A Certificateholders, (c) during the
Controlled Accumulation Period, prior to the
Class C Principal Payment Commencement Date,
paid to the Class B Certificateholders up to
the Class B Invested Amount for the Class B
Certificateholders, or (d) during any Early
Amortization Period, deposited in the Princi-
pal Account;
(xii) an amount equal to unreimbursed Class D
Investor Charge-Offs on such business day
will be (a) during the Revolving Period and
during the Controlled Accumulation Period
prior to the payment in full of the Class C
Invested Amount, paid to the Transferor in
order to maintain the Class D Invested Amount
and (b) during the Controlled Accumulation
Period following the payment in full of the
Class C Invested Amount, paid to the Class D
Certificateholders;
(xiii) if Green Tree or an affiliate of Green
Tree is the Servicer, an amount equal to the
Monthly Servicing Fee plus any Monthly Ser-
vicing Fee that was due but not paid on any
prior business day will be paid to the
Servicer; and
(xiv) the remainder will be treated as Excess
Interest Collections. See "Description of the
Offered Certificates--Application of Collec-
tions."
Sharing of Excess Interest Interest Collections on any business day in ex-
Collections................. cess of the amounts necessary to make required
payments on such business day will be applied
to cover any shortfalls with respect to amounts
payable from Interest Collections allocable to
any other Series then outstanding, pro rata
based upon the amount of the shortfall, if any,
with respect to such other Series. Any Excess
Interest Collections remaining after covering
shortfalls with respect to all outstanding Se-
ries will be paid to the Transferor.
17
<PAGE>
Investor Default Amount;
Investor Charge-Offs........
A portion of all Defaulted Receivables (the "In-
vestor Default Amount") will be allocated to
the Certificateholders in an amount equal to
the product of the Floating Allocation Percent-
age applicable during the related Monthly Pe-
riod and the principal amount of Defaulted Re-
ceivables for such Monthly Period. Available
Series Interest Collections will be applied to
the payment thereof as described in clauses (v)
and (vi) of "Distribution of Available Series
Interest Collections Allocable to
Certificateholders" above. If such application
is not sufficient to cover the entire Investor
Default Amount, then the amount of Excess In-
terest Collections, to the extent applied to
the payment thereof as described in "Sharing of
Excess Interest Collections" above and any Re-
allocated Principal Collections applied with
respect thereto, as described under "Descrip-
tion of the Offered Certificates--Reallocated
Principal Collections," will be applied to
cover any remaining Investor Default Amount. If
such amounts are not sufficient to cover such
remaining Investor Default Amount, then the
Class D Invested Amount will be reduced by the
remaining aggregate Investor Default Amount (a
"Class D Investor Charge-Off") for such Monthly
Period to avoid a charge-off with respect to
the Class A Certificates, the Class B Certifi-
cates or the Class C Certificates.
The Class D Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class D Certificates)
on any business day by the amount of Available
Series Interest Collections allocated and
available for such purpose as described in
clause (xii) of "Distribution of Available Se-
ries Interest Collections Allocable to Certifi-
cateholders." If the Class D Invested Amount is
reduced to zero, a portion of the Class C In-
vested Amount equal to the amount by which such
insufficiency would have caused the Class D In-
vested Amount to be reduced below zero (but not
in excess of the remaining aggregate Investor
Default Amount for such Monthly Period) will be
deducted from the Class C Invested Amount (a
"Class C Investor Charge-Off") to avoid a
charge-off with respect to the Class A Certifi-
cates or the Class B Certificates. If and for
so long as the Class D Invested Amount is re-
duced to zero, the Class C Certificateholders
will bear directly the credit and other risks
associated with their undivided interest in the
Trust.
The Class C Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class C Certificates)
on any business day by the amount of Available
Series Interest Collections allocated and
available for that purpose as described in
clause (xi) of "Distribution of Available Se-
ries Interest Collections Allocable to
Certificateholders." If the Class C Invested
Amount is reduced to zero, a portion of
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<PAGE>
the Class B Invested Amount equal to the amount
by which such insufficiency would have caused
the Class C Invested Amount to be reduced below
zero (but not in excess of the remaining aggre-
gate Investor Default Amount for such Monthly
Period) will be deducted from the Class B In-
vested Amount (a "Class B Investor Charge-Off")
to avoid a charge-off with respect to the Class
A Certificates. If and for so long as the Class
C Invested Amount is reduced to zero, the Class
B Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust.
The Class B Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class B Certificates)
on any business day by the amount of Available
Series Interest Collections allocated and
available for that purpose as described in
clause (x) of "Distribution of Available Series
Interest Collections Allocable to
Certificateholders." If the Class B Invested
Amount is reduced to zero, a portion of the
Class A Invested Amount equal to the amount by
which such insufficiency would have caused the
Class B Invested Amount to be reduced below
zero (but not in excess of the remaining aggre-
gate Investor Default Amount for such Monthly
Period) will be deducted from the Class A In-
vested Amount (a "Class A Investor Charge-
Off"). If and for so long as the Class B In-
vested Amount and the Class C Invested Amount
are reduced to zero, the Class A
Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust.
The Class A Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class A Certificates)
on any business day by the amount of Available
Series Interest Collections allocated and
available for that purpose as described in
clause (vii) of "Distribution of Available Se-
ries Interest Collections Allocable to
Certificateholders." See "Description of the
Offered Certificates--Investor Charge-Offs."
Subordination of the Class B
Certificates, the Class C
Certificates and the Class
D Certificates..............
The Class B Certificates will be subordinated to
fund payments of principal and interest on the
Class A Certificates. The Class C Certificates
will be subordinated to fund payments of prin-
cipal and interest on the Class A Certificates
and the Class B Certificates. The Class D Cer-
tificates will be subordinated to fund payments
of principal and interest on the Class A Cer-
tificates, the Class B Certificates and the
Class C Certificates. See "Description of the
Offered Certificates--Subordination of the
Class B Certificates," "--Reallocation of Cash
Flows" and "--Reallocated Principal Collec-
tions" herein. The Class B In-
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<PAGE>
vested Amount, the Class C Invested Amount, and
the Class D Invested Amount will be subordi-
nated as described herein to the extent neces-
sary to fund certain payments with respect to
each Class of Certificates with an earlier al-
phabetical designation as described herein. If
at the end of any Monthly Period there is a
positive Class A Required Amount, Class B Re-
quired Amount or Class C Required Amount, then,
commencing on the first business day of the
following Monthly Period, certain Principal
Collections for such business day will be used
to fund first the Class A Required Amount, sec-
ond the Class B Required Amount and third the
Class C Required Amount, as more fully de-
scribed herein in "Description of the Offered
Certificates--Reallocated Principal Collec-
tions." To the extent the Class B Invested
Amount, the Class C Invested Amount or the
Class D Invested Amount is reduced, the per-
centage of Interest Collections allocated to
the Class B Certificateholders, the Class C
Certificateholders, or the Class D
Certificateholders, as applicable, in subse-
quent Monthly Periods will be reduced. More-
over, to the extent the amount of such reduc-
tion in the Class B Invested Amount, the Class
C Invested Amount, or the Class D Invested
Amount is not reimbursed, the amount of princi-
pal distributable to the Class B
Certificateholders, the Class C
Certificateholders, or the Class D
Certificateholders, as applicable, from the
Collection Account will be reduced. Principal
payments with respect to the Class B Certifi-
cates will not be made until the final payment
of the Class A Invested Amount has been made to
the Class A Certificateholders. Principal pay-
ments with respect to the Class C Certificates
will not be made until the final payment of the
Class A Invested Amount has been made to the
Class A Certificateholders and the final pay-
ment of the Class B Invested Amount has been
made to the Class B Certificateholders. Princi-
pal payments with respect to the Class D Cer-
tificates will not be made until the final pay-
ment of the Class A Invested Amount has been
made to the Class A Certificateholders, the fi-
nal payment of the Class B Invested Amount has
been made to the Class B Certificateholder and
the final payment of the Class C Invested
Amount has been made to the Class C Certifi-
cateholders. See "Description of the Offered
Certificates--Subordination of the Class B Cer-
tificates," "--Reallocation of Cash Flows" and
"--Reallocated Principal Collections."
Servicing Compensation....... The Servicer will receive a monthly servicing
fee and certain other amounts as described
herein as servicing compensation from the
Trust. See "Description of the Certificates--
Servicing Compensation and Payment of Ex-
penses." In certain circumstances, the Servicer
will be permitted to use for its own benefit
and not segregate collections on the Receiv-
ables received by it during each Monthly Period
until no later than
20
<PAGE>
the business day prior to the related Distribu-
tion Date. See "Description of the Certifi-
cates--Application of Collections."
Companion Series............. On or prior to the commencement of the Con-
trolled Accumulation Period or the Early Amor-
tization Period, the Series 1995-1 Certificates
may be paired with one or more other Series
(each a "Companion Series"). Each Companion Se-
ries either will be prefunded with an initial
deposit to a prefunding account in an amount up
to the initial principal balance of such Com-
panion Series, funded primarily from the pro-
ceeds for the sale of such Companion Series, or
will have a variable principal amount. Any such
prefunding account will be held for the benefit
of such Companion Series and not for the bene-
fit of Series 1995-1 Certificateholders. As
principal is paid with respect to the Series
1995-1 Certificates, either (i) in the case of
a prefunded Companion Series, an equal amount
of funds on deposit in any prefunding account
for such prefunded Companion Series will be re-
leased (which funds will be distributed to the
Transferor) or (ii) in the case of a Companion
Series having a variable principal amount, an
interest in such variable Companion Series in
an equal or lesser amount may be sold by the
Trust (and the proceeds thereof will be dis-
tributed to the Transferor) and, in either
case, the invested amount in the Trust of such
Companion Series will increase by up to the
corresponding amount. See "Description of the
Certificates-- Companion Series."
Optional Repurchase.......... The Invested Amount of the Class A Certificates,
the Class B Certificates and the Class C Cer-
tificates will be subject to optional repur-
chase by the Transferor on any Distribution
Date after the Invested Amount of the Class A
Certificates, the Class B Certificates and the
Class C Certificates is reduced to an amount
less than or equal to 10% of the initial In-
vested Amount of the Class A Certificates, the
Class B Certificates and the Class C Certifi-
cates, respectively, if certain conditions set
forth in the Pooling and Servicing Agreement
are met. The repurchase price will be equal to
the Invested Amount plus accrued and unpaid in-
terest on the Class A Certificates, the Class B
Certificates and the Class C Certificates
through the day preceding the Distribution Date
on which the repurchase occurs. See "Descrip-
tion of the Offered Certificates--Final Payment
of Principal; Termination."
Tax Status...................
In the opinion of counsel to Green Tree and the
Transferor, the Class A Certificates and the
Class B Certificates will be characterized as
debt and the Trust will not be characterized as
an association, publicly traded partnership or
taxable mortgage pool taxable as a corporation
for federal income tax purposes under existing
law. Under the Pooling and Servicing Agreement,
the Transferor, the Servicer, the Class A
Certificateholders and the Class B
Certificateholders will agree to treat
21
<PAGE>
the Class A Certificates and the Class B Cer-
tificates as debt for federal, state, and other
tax purposes. See "Certain Federal Income Tax
Consequences" for additional information con-
cerning the application of federal income tax
laws.
ERISA Considerations......... Under regulations issued by the U.S. Department
of Labor, the Trust's assets would not be
deemed "plan assets" of an employee benefit
plan holding an interest in the Certificates if
certain conditions are met, including that in-
terests in each Class of the Certificates be
held by at least 100 persons independent of the
Transferor and each other upon completion of
the public offering being made hereby. The Un-
derwriters expect, although no assurance can be
given, that the Class A Certificates will be
held by at least 100 such persons, and the
Transferor anticipates that the other condi-
tions of the "publicly offered security" excep-
tion contained in the regulations will be met
with respect to the Class A Certificates. No
monitoring or other measures will be taken to
ensure that any such conditions will be met
with respect to the Class A Certificates. The
Underwriter of the Class B Certificates expects
that the Class B Certificates will not be held
by at least 100 persons. Consequently, the pub-
licly offered security exception contained in
the regulations will not be met with respect to
the Class B Certificates. If the Trust's assets
were deemed to be "plan assets" of such a plan,
there is uncertainty as to whether existing ex-
emptions from the "prohibited transaction"
rules of the Employee Retirement Income Secu-
rity Act of 1974, as amended ("ERISA"), and the
Internal Revenue Code of 1986, as amended (the
"Code") would apply to all transactions involv-
ing the Trust's assets. Accordingly, employee
benefit plans contemplating purchasing the Of-
fered Certificates should consult their counsel
before making a purchase. See "Employee Benefit
Plan Considerations."
Offered Certificate Ratings..
It is a condition to the issuance of the Class A
Certificates that they be rated "AAA" or its
equivalent by at least one nationally recog-
nized rating agency (the rating agency or agen-
cies selected by the Transferor to rate any Se-
ries, is hereafter referred to as the "Rating
Agency."
It is a condition to the issuance of the Class B
Certificates that they be rated at least
" " or its equivalent by the Rating
Agency.
A rating is not a recommendation to buy, sell or
hold securities and may be subject to revision
or withdrawal at any time by the assigning Rat-
ing Agency. Each rating should be evaluated in-
dependently of any other rating. See "Risk Fac-
tors--Certificate Rating."
Listing...................... Application will be made to list the Offered
Certificates on the Luxembourg Stock Exchange.
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<PAGE>
RISK FACTORS
Prospective investors in the Offered Certificates should consider, among
other things, the following factors in connection with the purchase of the
Offered Certificates:
LIMITED EXPERIENCE
Green Tree began originating and servicing revolving credit arrangements in
February 1994, and thus has limited underwriting and servicing experience, and
very limited delinquency, default and loss experience, with respect to such
accounts. Green Tree's substantial experience in underwriting and servicing
retail installment sales contracts is not necessarily indicative that
satisfactory results will be experienced on Accounts and the Receivables
generated in Accounts. See "Green Tree Financial Corporation and its Commercial
Finance Division."
ADDITION OF TRUST ASSETS; ADDITIONAL PRODUCT TYPES
The Transferor expects, and in some cases will be obligated, to designate
Additional Accounts, the Receivables in which will be conveyed to the Trust.
Such Additional Accounts may include accounts with dealers originated by Green
Tree under criteria different from those which were applied to the Dealers on
the Accounts designated on the Cut-off Date or to the dealers on previously
designated Additional Accounts, because such accounts were originated at a
different date. Such Accounts may also provide financing for products of types
different from those included in the Trust on the Closing Date. Consequently,
there can be no assurance that Additional Accounts designated in the future
will relate to the same types of products or will be of the same credit quality
as previously designated Accounts or that new product types that may secure the
Receivables in new Accounts will provide security that is as favorable as that
provided by manufactured homes or other additional product types. The
designation of Additional Accounts will be subject to the satisfaction of
certain conditions described herein under "Description of the Certificates--
Addition of Accounts."
MASTER TRUST CONSIDERATIONS; POSSIBLE EFFECTS OF NEW SERIES ON PREVIOUSLY
ISSUED SERIES
In addition to the Certificates, the Trust, as a master trust, is expected to
issue additional Series from time to time. While the Principal Terms of any
Series will be specified in a Supplement to the Pooling and Servicing
Agreement, the provision of a Supplement and, therefore, the terms of any
additional Series, will not be subject to the prior review or consent of
holders of the certificates of any previously issued Series. Such Principal
Terms may include methods for determining applicable investor percentages and
allotting collections, provisions creating security or credit enhancement,
different classes of certificates (including subordinated classes of
certificates), provisions subordinating such Series to another Series (if the
Supplement relating to such Series so permits) or another Series to such Series
(if the Supplement for such other Series so permits), and any other amendment
or supplement to the Pooling and Servicing Agreement which is made applicable
only to such Series. See "Description of the Offered Certificates--Exchanges."
In addition, the provisions of any Supplement may give the holders of the
certificates issued pursuant thereto consent, approval, or other rights that
could result in such holders having the power to cause the Transferor, the
Servicer, or the Trustee to take or refrain from taking certain actions,
including, without limitation, actions with respect to the exercise of certain
rights and remedies under the Pooling and Servicing Agreement, without regard
to the position or interest of the Certificateholders of the 1995-1 Series or
the certificateholders of any other Series. Similar rights may also be given to
the provider of any credit enhancement for any Series. It is a condition
precedent to issuance of any additional Series that each Rating Agency that has
rated any outstanding Series deliver written confirmation to the Trustee that
the Exchange will not result in such Rating Agency reducing or withdrawing its
rating on any outstanding Series. There can be no assurance, however, that the
Principal Terms of any other Series, including any Series issued from time to
time hereafter, might
23
<PAGE>
not have an adverse impact on the timing and amount of payments received by a
Certificateholder or the value of Certificates even if there is no change in
the rating of any outstanding Series. See "Description of the Offered
Certificates--Exchanges."
TRANSFER OF THE RECEIVABLES; INSOLVENCY RISK CONSIDERATIONS
Green Tree will warrant to the Transferor in the Purchase Agreement relating
to any Series that the sale of the related Receivables by it to the Transferor
is a valid sale of such Receivables to the Transferor. Green Tree will take all
actions that are required under Minnesota law to perfect the Transferor's
ownership interest in such Receivables. See "Certain Legal Aspects of the
Receivables--Transfer of Receivables." Notwithstanding the foregoing, if Green
Tree were to become a debtor in a bankruptcy case and a creditor or trustee-in-
bankruptcy of Green Tree, or Green Tree itself as debtor-in-possession, were to
take the position that any sale of Receivables to the Transferor should be
recharacterized as a pledge of such Receivables to secure a borrowing of Green
Tree, then delays in payments to the Transferor (and therefore to the Trust and
the Certificateholders) of collections on the Receivables could occur or
(should the court rule that such transfers were borrowings rather than sales)
reductions in the amount of such payments could result. Green Tree's limited
guaranty with respect to the Class C Certificates (which are not being offered
hereby) may increase the risk of such recharacterization. If a transfer of
Receivables to the Transferor were recharacterized as a pledge, a tax or
government lien on the property of Green Tree arising before any Receivables
come into existence may have priority over the Transferor's (and therefore the
Trust's) interest in such Receivables. See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to Bankruptcy." If the transfer of
Receivables to the Transferor were respected as a sale, the Receivables would
not be part of Green Tree's bankruptcy estate and would not be available to
Green Tree's creditors.
In addition, if Green Tree were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of Green Tree, or Green Tree itself as
debtor-in-possession, were to request a bankruptcy court to order that the
Transferor be substantively consolidated with Green Tree, delays in and
reductions in the amount of distributions on the Certificates could occur.
Although the Pooling and Servicing Agreement will provide that the Transferor
is transferring all of its right, title, and interest in and to the Receivables
to the Trust, a court could treat such transactions as an assignment of
collateral as security for the benefit of holders of certificates issued by the
Trust. It is possible that the risk of such treatment may be increased by the
retention by the Transferor of the Exchangeable Transferor Certificate and the
Class D Certificates. The Transferor will represent and warrant in the Pooling
and Servicing Agreement that the transfer of the Receivables to the Trust is
either a valid transfer and assignment of the Receivables to the Trust or the
grant to the Trust of a security interest in the Receivables. The Transferor
has taken and will take certain actions required to perfect the Trust's
interest in the Receivables and will warrant that if the transfer to the Trust
is deemed to be a grant to the Trust of a security interest in the Receivables,
the Trustee will have a first priority perfected security interest therein,
subject only to Permitted Liens. If the transfer of the Receivables to the
Trust is deemed to create a security interest therein under the UCC, a tax or
government lien on property of the Transferor arising before Receivables come
into existence may have priority over the Trust's interest in such Receivables.
In the event of the insolvency of the Transferor, certain administrative
expenses may also have priority over the Trust's interest in such Receivables.
See "Certain Legal Aspects of the Receivables--Transfer of Receivables."
In a recent decision, Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), the United States Court of Appeals for the 10th Circuit suggested
that even where a transfer of accounts or chattel paper from a seller to a
buyer constitutes a "true sale," the accounts or chattel paper would
nevertheless constitute property of the seller's estate in a bankruptcy of the
seller. If Green Tree or the Transferor were to become subject to a bankruptcy
proceeding and a court were to follow the Octagon court's reasoning,
Certificateholders might experience delays in payment or possibly losses in
their investment in the Certificates. Counsel to the Transferor has advised the
Transferor that the reasoning of the Octagon case appears to be inconsistent
with established precedent and the Uniform Commercial Code. See "Certain Legal
Aspects of the Receivables--Certain Matters Relating to Bankruptcy."
24
<PAGE>
To the extent that the Transferor is deemed to have granted a security
interest in the Receivables to the Trust and such security interest was validly
perfected before any insolvency of the Transferor and was not granted or taken
in contemplation of insolvency or with the intent to hinder, delay, or defraud
the Transferor or its creditors, such security interest should not be subject
to avoidance in the event of insolvency or receivership of the Transferor, and
payments to the Trust with respect to the Receivables should not be subject to
recovery by a bankruptcy trustee or receiver of the Transferor. If, however,
such a bankruptcy trustee or receiver were to assert a contrary position,
delays in payments on the Offered Certificates and possible reductions in the
amount of those payments could occur. If a bankruptcy trustee or receiver were
appointed for the Servicer, and no Servicer Default other than such bankruptcy
or receivership or insolvency of the Servicer exists, the bankruptcy trustee or
receiver may have the power to prevent either the Trustee or the majority of
the Certificateholders from effecting a transfer of servicing to a successor
Servicer. If a bankruptcy trustee or receiver were appointed for the
Transferor, causing a Pay Out Event with respect to all Series then
outstanding, new Principal Receivables would not be transferred to the Trust
pursuant to the Pooling and Servicing Agreement and the Trustee would sell the
portion of the Receivables allocable in accordance with the Pooling and
Servicing Agreement to each Series (unless holders of more than 50% of the
principal amount of each class of each Series, excluding any class or portion
thereof held by the Transferor, and the holders of any Supplemental
Certificates or any other interest in the Exchangeable Transferor Certificates
other than the Transferor instruct otherwise), thereby causing early
termination of the Trust and a loss to the Certificateholders if the net
proceeds allocable to the Certificateholders from such sale, if any, were
insufficient to pay the Certificateholders in full. The net proceeds of any
such sale of the portion of the Receivables allocated in accordance with the
Pooling and Servicing Agreement to each Series will first be used to pay
amounts due to the Class A Certificateholders, will thereafter be used to pay
amounts due to the Class B Certificateholders, will thereafter be used to pay
amounts due to the Class C Certificateholders, and will thereafter be used to
pay amounts due to the Class D Certificateholders. If the only Pay Out Event to
occur is either the insolvency of the Transferor or the appointment of a
bankruptcy trustee or receiver for the Transferor, the bankruptcy trustee or
receiver may have the power to continue to require the Transferor to transfer
new Receivables to the Trust and to prevent the early sale, liquidation, or
disposition of the Receivables and the commencement of the Early Amortization
Period. In addition, a bankruptcy trustee or receiver for the Transferor may
have the power to cause early payment of the Certificates. See "Certain Legal
Aspects of the Receivables--Certain Matters Relating to Bankruptcy."
BASIS RISK
The Receivables will bear interest at a variable rate above a designated
index rate. See "Green Tree Financial Corporation and its Commercial Finance
Division--Floorplan Payment Terms." The Offered Certificates bear interest at a
floating rate based on LIBOR. If there is a decline in such index rate, the
amount of Interest Collections on such Accounts may be reduced, whereas the
amounts payable as Monthly Interest on such Series of Certificates and other
amounts required to be funded out of Interest Collections with respect to such
Series may not be similarly reduced and therefore might not be covered by such
Interest Collections. The Servicer has the right to change the Discount Factor
to offset any such reduced Interest Collections, but the Discount Factor may in
no event exceed %. There can be no assurance that any other assets of the
Trust that are intended to be available to cover such shortfalls will be
available or sufficient to cover any such shortfalls. The interest rates borne
by the Receivables will be limited by the applicable state usury laws.
SOCIAL, ECONOMIC AND OTHER FACTORS; COMPETITION
Green Tree's ability to generate new Receivables, and the Dealers' ability to
pay Receivables owned by the Trust, will depend upon the retail sales of
manufactured housing and other products securing such Receivables. The level of
retail sales of such products will be affected by a variety of social and
economic factors, including national and regional unemployment levels and
levels of economic activity in general, interest rates and consumer perceptions
of economic conditions. In addition, Green Tree competes with various other
financing sources, including independent finance companies, manufacturer-
affiliated finance
25
<PAGE>
companies and banks, who are in the business of providing floorplan financing
arrangements to dealers. If, for any reason, Green Tree were unable to or
ceased to generate new receivables, a Pay Out Event would occur. See "Payments
and Maturity; Reinvestment Risk" below.
LIMITED LIQUIDITY
The Underwriters currently intend to make a market in the Offered
Certificates but are not obligated to do so. There can be no assurance that a
secondary market will develop for the Offered Certificates, or, if it does
develop, that it will provide the holders of any of the Offered Certificates
with liquidity of investment or that if such a secondary market develops that
it will continue to exist for the term of the Offered Certificates.
NON-RECOURSE TO TRANSFEROR, GREEN TREE OR AFFILIATES THEREOF
No Certificateholder will have recourse for payment of its Certificates to
any assets of any of the Transferor (other than the Exchangeable Transferor
Certificate and an interest represented by any class of investor certificates
which is retained by the Transferor (a "Transferor Retained Class"), in each
case to the extent described herein), Green Tree (other than its Limited
Guaranty that will benefit the Class C Certificates only), or any affiliates
thereof. Consequently, Certificateholders must rely solely upon payments on the
Receivables for the payment of principal of and interest on the Certificates.
Furthermore, under the Pooling and Servicing Agreement, the Certificateholders
have an interest in the Receivables and Collections only to the extent of the
Certificateholders' Interest and, to the limited extent described herein, the
Transferor Interest. Should the Offered Certificates not be paid in full on a
timely basis, Certificateholders may not look to any assets of any of the
Transferor (other than the Exchangeable Transferor Certificate and any
Transferor Retained Class, in each case to the extent described herein), Green
Tree or any affiliates thereof to satisfy their claims.
PAYMENTS AND MATURITY; REINVESTMENT RISK
The Receivables may be paid at any time and there is no assurance that there
will be additional Receivables created or that any particular pattern of
repayments will occur. A significant decline in the amount of Receivables
generated could result in the occurrence of a Pay Out Event and the
commencement of the Early Amortization Period if, as a result, the Transferor
Interest were reduced below the Minimum Transferor Interest or amounts in the
Excess Funding Account result in significant Negative Carry Amounts. See
"Maturity Considerations" and "Description of the Offered Certificates--Pay Out
Events" for a discussion of other Pay Out Events. If a Pay Out Event occurs,
the Early Amortization Period will commence and the average life and maturity
of the Offered Certificates may be significantly reduced. There can be no
assurance in that event that the holders of the Offered Certificates would be
able to reinvest any accelerated distributions on account of such Offered
Certificates in other suitable investments having a comparable yield.
EFFECT OF SUBORDINATION OF CLASS B CERTIFICATES; PRINCIPAL PAYMENTS
The Class B Certificates will be subordinated in right of payment of
principal to the Class A Certificates. Payments of principal in respect of the
Class B Certificates will not commence until after the Class A Invested Amount
has been paid in full. Moreover, the Class B Invested Amount is subject to
reduction on any Determination Date if collections of Principal Receivables
allocable to the Class B Certificates are reallocated to cover the Class A
Required Amount or if the aggregate Investor Default Amount, if any, for the
preceding Monthly Period exceeds the aggregate Available Series Interest
Collections applied to the payment thereof and is not funded from Excess
Interest Collections, Class C Reallocated Principal Collections or Class D
Reallocated Principal Collections and is not assessed against the Class C
Invested Amount or the Class D Invested Amount. If the Class B Invested Amount
suffers such a reduction, Interest Collections allocable to the Class B
Certificateholders' Interest in future Monthly Periods will be reduced.
Moreover, to the extent the amount of such reduction in the Class B Invested
Amount is not reimbursed, the amount of principal
26
<PAGE>
distributable to the Class B Certificateholders will be reduced. See
"Description of the Offered Certificates-- Allocation Percentages," "--
Reallocated Principal Collections," "--Investor Charge-Offs" and
"--Subordination of the Class B Certificates."
NEGATIVE CARRY; DECREASE IN AVAILABLE SERIES INTEREST COLLECTIONS
If funds are deposited in the Excess Funding Account at any time, such funds
will be invested in Permitted Investments and, as a result, would be expected
to earn a rate of return lower than the interest rates borne by a comparable
amount of Principal Receivables. Accordingly, any deposit of funds in the
Excess Funding Account may be expected to reduce the amount of Interest
Collections available to the Trust on each business day, until Green Tree is
able to generate sufficient Eligible Receivables to permit such funds to be
released from the Excess Funding Account.
ABILITY OF SERVICER TO CHANGE PAYMENT TERMS OF THE RECEIVABLES
The Servicer will have the right, on behalf of the Transferor, to change
payment terms (including without limitation the interest rate and repayment
terms) and various other terms with respect to the Receivables, subject to the
conditions described below. A decrease in the interest rate borne by the
Receivables or an increase in interest-free periods without an increase in the
Discount Factor would decrease the Portfolio Yield and could result in the
occurrence of a Pay Out Event. See "Payments and Maturity; Reinvestment Risk"
above. Green Tree will covenant that it will only change the terms relating to
the Receivables generally if in its reasonable judgment, no Pay Out Event will
occur as a result of the change and the interests of the certificateholders of
all outstanding Series will not be materially adversely affected. Except as
specified above, there are no restrictions on the ability of the Servicer to
change the terms of the Receivables. While the Servicer has no current
intention of taking actions which would change the payment or other terms of
the Receivables, other than in accordance with its customary and usual
procedures, there can be no assurance that changes in the marketplace or
prudent business practice might not result in a determination to do so.
Green Tree will have the right to generate new Receivables with payment terms
which are generally longer than the current payment terms on the Receivables.
Such a lengthening of the payment period could result in a reduction of the
monthly payment rate and consequently a reduction in the Portfolio Yield (if a
Discount Factor is in use) unless such Discount Factor is increased
accordingly, for any Monthly Period.
CONTROL OF ACTIONS UNDER THE POOLING AND SERVICING AGREEMENT
Subject to certain exceptions, the consent or approval of the holders of a
specified percentage of the aggregate unpaid principal amount of all
outstanding investor certificates of each Series will be required to direct
certain actions to be taken, under the Pooling and Servicing Agreement or the
related Supplement. In determining whether the required percentage of
Certificateholders have given their approval or consent, except as otherwise
specified, the Class A Certificateholders, the Class B Certificateholders and
the Class C Certificateholders will be treated as a single Series. Accordingly,
the Class A Certificateholders will have the power to determine whether any
such action is taken without regard to the position or interests of the Class B
Certificateholders or the Class C Certificateholders relating to such action.
Neither the Class B Certificateholders nor the Class C Certificateholders will
have similar power. However, under certain circumstances the consent or
approval of a specified percentage of the aggregate invested amount of all
Series outstanding or of the invested amount of each class of each Series may
be required to direct certain actions, including requiring the appointment of a
successor Servicer following a Servicer Default, amending the Pooling and
Servicing Agreement in certain circumstances, directing the Servicer not to
sell the Receivables upon the occurrence of an Insolvency Event and directing a
repurchase of all outstanding Series upon the breach of certain representations
and warranties by the Transferor. In such instances, it may be difficult for
the Certificateholders to achieve the results that they desire.
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<PAGE>
CERTIFICATE RATING
It is a condition to issuance of the Class A Certificates that they have an
initial rating of "AAA" or its equivalent by at least one nationally recognized
rating agency. It is a condition to issuance of the Class B Certificates that
they have an initial rating of " " or its equivalent by at least one
nationally recognized rating agency. However, any such rating will not address
the likelihood that the principal of, or interest on, the Class A Certificates
will be paid by the Class A Scheduled Payment Date or that the principal of, or
interest on, the Class B Certificates will be paid by the Class B Scheduled
Payment Date. It is a condition to issuance of the Class C Certificates that
they be rated " " or its equivalent by at least one nationally
recognized rating agency. The Class D Certificates initially will not be rated.
The ratings will be based primarily on the value of the Receivables and the
funds on deposit in the Excess Funding Account, if any (and the manner in which
such funds are invested). The ratings are not a recommendation to purchase,
hold, or sell the Class A Certificates, the Class B Certificates or the Class C
Certificates, inasmuch as such ratings do not comment as to the market price or
suitability for a particular investor. There can be no assurance that the
ratings will remain in effect for any given period of time or that either
rating will not be lowered or withdrawn by any Rating Agency if in its judgment
circumstances so warrant.
The Transferor will request a rating of the Offered Certificates by at least
one nationally recognized rating agency. There can be no assurance as to
whether any rating agency not requested to rate the Offered Certificates will
nonetheless issue a rating with respect to any Class of the Offered
Certificates, and, if so, what such rating would be. A rating assigned to any
Class of the Offered Certificates by a rating agency that has not been
requested by the Transferor to do so may be lower than the ratings assigned by
the Rating Agencies pursuant to the Transferor's request.
THE TRUST
The Trust will be formed, in accordance with the laws of the State of
Minnesota, pursuant to the Pooling and Servicing Agreement. The Trust will be
formed for the transactions described herein and similar transactions, as
contemplated by the Pooling and Servicing Agreement, and prior to formation
will have no assets or obligations. The Trust will not engage in any business
activity, other than as described herein, but rather will only acquire and hold
the Receivables (and related assets), issue (or cause to be issued) the
Certificates, the Exchangeable Transferor Certificate, and certificates
representing additional Series and engage in related activities (including,
with respect to any Series, entering into any credit enhancement and credit
enhancement agreement relating thereto) and make payments thereon. As a
consequence, the Trust is not expected to have any need for additional capital
resources.
THE TRANSFEROR
Green Tree Floorplan Funding Corp., a wholly owned subsidiary of Green Tree,
was incorporated in Delaware in September 1995. The Transferor was organized
for the limited purposes of purchasing receivables from Green Tree and
transferring such receivables to third parties, and any activities incidental
to and necessary or convenient for the accomplishment of such purposes. The
principal executive offices of the Transferor are located at 500 Landmark
Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639 (telephone (612)
293-3400).
The Transferor has taken, and will take in connection with the creation of
each Series of Certificates, steps intended to ensure that the voluntary or
involuntary application for relief by Green Tree under the United States
Bankruptcy Code or similar applicable state laws ("Insolvency Laws") will not
result in consolidation of the assets and liabilities of the Transferor with
those of Green Tree. These steps include the creation of the Transferor as a
separate, limited-purpose subsidiary pursuant to a certificate of incorporation
containing certain limitations (including restrictions on the nature of the
Transferor's business and a
28
<PAGE>
restriction on the Transferor's ability to commence a voluntary case or
proceeding under any Insolvency Law without the unanimous affirmative vote of
all of its directors). The Transferor's Certificate of Incorporation includes a
provision that requires the Transferor to have two directors who qualify under
the Certificate of Incorporation as "Independent Directors," meaning a person
who is not now, and has never been, a director or officer of, employed by, or
the holder of any beneficial economic interest in any Affiliate, and who may at
no time hold any beneficial or economic interest in the Transferor. "Affiliate"
means any entity other than the Transferor (i) which owns beneficially,
directly or indirectly, 10% or more of the outstanding shares of Common Stock
of the Transferor, or (ii) of which 10% or more of the outstanding shares of
its Common Stock is owned beneficially, directly or indirectly, by any entity
described in clause (i) above, or (iii) which is controlled by an entity
described in clause (i) above, as the term "control" is defined under the Rules
and Regulations of the Securities and Exchange Commission. No assurance can be
given, however, that such a consolidation will not occur. See "Risk Factors--
Transfer of the Receivables; Insolvency Risk Considerations."
GREEN TREE FINANCIAL CORPORATION AND ITS COMMERCIAL FINANCE DIVISION
Green Tree is a Delaware corporation that, as of June 30, 1995, had
stockholders' equity of approximately $844,992,000. 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 Dealers for purposes of purchasing inventory from
manufacturers. Green Tree is currently the largest servicer of manufactured
housing government insured or guaranteed contracts, and is one of the largest
servicers of conventional manufactured housing contracts, in the United States.
Green Tree conducts its business throughout the United States through 51
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, 345 St. Peter Street, St. Paul, Minnesota
55102-1639 (telephone (612) 293-3400). Green Tree's Annual Report on Form 10-K
for the year ended December 31, 1994, most recent Proxy Statement, and, when
available, subsequent quarterly or annual reports are available from Green Tree
upon written request. The Certificates do not represent an interest in or
obligation of Green Tree, the Transferor or any of their affiliates, and no
Certificateholder will have recourse for payment of its Certificates to any
assets of any of Green Tree, the Transferor (other than the Exchangeable
Transferor Certificate and any Transferor Retained Class, to the extent
described herein) or any of their affiliates.
COMMERCIAL FINANCE DIVISION--GENERAL
The Receivables sold or to be sold to the Transferor have been or will be
selected from extensions of credit made by Green Tree's Commercial Finance
Division ("CFD") under revolving financing arrangements with (i) retail dealers
of certain consumer products to enable such dealers to acquire inventory
("Floorplan Receivables") and (ii) manufacturers and distributors of certain
consumer and commercial products to finance their inventory of such products
and to finance their accounts receivable arising from sales of such inventory
("Asset-Based Receivables"). The dealers, manufacturers and distributors
obligated under the Receivables are collectively referred to herein as
"Dealers." The products currently financed by Floorplan Receivables include
manufactured homes, recreational vehicles and marine products. The products
financed by Asset-Based Receivables are expected to be primarily the same type
of products as are then being financed by CFD under Floorplan Receivables, but
may include commercial products and other types of consumer products. The types
of products financed by CFD may change over time, and the relative proportions
of types of products currently financed by CFD is expected to change over time.
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<PAGE>
FLOORPLAN RECEIVABLES--GENERAL
The Floorplan Receivables are secured by the products being financed and the
Dealer's other inventory, together with personal guaranties in some instances.
The amount of the advance is generally equal to 100% of the invoice price of
the product. The Floorplan Receivables are generally full recourse obligations
of the related Dealer.
FLOORPLAN AGREEMENTS WITH MANUFACTURERS
Green Tree will provide financing for products for a particular Dealer, in
most instances, only if Green Tree has also entered into a floorplanning
agreement (the "Floorplan Agreement") with the manufacturer, distributor or
other vendor (each a "Manufacturer") of such product. Pursuant to the Floorplan
Agreement, the Manufacturer will agree, among other matters, to purchase from
Green Tree those products sold by such Manufacturer to a Dealer and financed by
Green Tree if Green Tree acquires possession of such products pursuant to
repossession, voluntary surrender, or other circumstances. The terms of such
repurchase obligations may vary, both by industry and by Manufacturer. In some
instances, the Manufacturer will be obligated to repurchase the product for a
price equal to the unpaid principal balance owed by the Dealer for the product
in question whenever Green Tree acquires possession thereof. On occasion,
different terms may be negotiated. Such terms may provide for a smaller
purchase price, or a purchase price which declines over time, or time periods
beyond which no obligation to purchase by the Manufacturer shall apply. Certain
Floorplan Agreements may also eliminate the repurchase obligation or reduce the
purchase price payable by the Manufacturer, depending upon the condition of the
inventory acquired by Green Tree.
FLOORPLAN CREDIT UNDERWRITING PROCESS
A Dealer requesting the establishment of a credit line with Green Tree is
required to submit an application and financial information, including audited
or unaudited financial statements and, in some cases, tax returns. CFD attempts
to talk to, or receive reference letters from, several of the applicant's
current creditors and may also obtain a credit agency report on the applicant's
credit history. In addition to such current financial information and
historical credit information, CFD will consider the following factors: the
reason for the request for the extension of credit; the need for the credit
line; the products to be financed and the financial status of the manufacturer
of such products, if any, that would enter into a related Floorplan Agreement;
and the experience of the Dealer's management. The determination of whether to
extend credit and the amount to be extended is based upon a weighing of the
above factors.
Extensions of credit lines in excess of $5,000,000 must be approved at the
corporate level of Green Tree. Extensions of credit up to $5,000,000 may be
approved by division level credit officers and up to $1,000,000 by a business
center vice president. CFD reviews individual Dealer credit limits (i) prior to
any increase in such credit limit, (ii) generally every 12 to 18 months and
(iii) upon becoming aware that the Dealer is experiencing financial
difficulties or is in default on its obligations under its agreement with Green
Tree.
CREATION OF FLOORPLAN RECEIVABLES
Green Tree's floorplan business is typically documented by an agreement
between Green Tree and the dealer which provides for both the extension of
credit and a grant of a security interest. Such agreements are generally for an
unspecified period of time and create discretionary lines of credit, which
Green Tree may terminate at any time in its sole discretion, subject, however,
to prevailing standards of commercial reasonableness and good faith. Absent
default by the Dealer, the outstanding Floorplan Receivables owed by such
Dealer cannot be accelerated, even if the line of credit is terminated. After
the effective date of termination, Green Tree is under no obligation to
continue to provide additional financing, but the then current outstanding
balance will be repayable in accordance with the payment terms of such Dealer's
program with Green Tree, as described below.
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<PAGE>
Advances made for the purchase of inventory are most commonly arranged in the
following manner: the Dealer will contact the manufacturer and place a purchase
order for a shipment of inventory. If the manufacturer has been advised that
Green Tree is the Dealer's inventory financing source, the manufacturer will
contact Green Tree to obtain an approval number with respect to such purchase
order. Upon such request, Green Tree will determine whether (i) the
manufacturer is in compliance with its Floorplan Agreement, (ii) the Dealer is
in compliance with its program with Green Tree and (iii) such purchase order is
within the Dealer's credit limit. If so, Green Tree will issue an approval
number to the manufacturer. The manufacturer will then ship the inventory and
directly submit its invoice for such purchase order to Green Tree for payment.
Interest or finance charges normally begin to accrue on the Dealer's accounts
as of the invoice date. The proceeds of the loan being made by Green Tree to
the Dealer are paid directly to the manufacturer in satisfaction of the invoice
price and will normally be funded at that time. In some cases, however, Green
Tree will negotiate a delay in funding the advance for a period which in most
cases does not exceed 10 days after the date of the invoice. Green Tree and the
manufacturer may also agree that Green Tree may discount the invoice price of
the inventory ordered by the Dealer. Under this arrangement, the manufacturer
will deem itself paid in full upon receipt of such discounted amount.
Typically, in exchange for the increased yield created by the discount, Green
Tree will agree to provide the manufacturer's Dealers with reduced interest, or
perhaps no interest, for some period of time. Thus, the Dealer's financing
program may provide for so-called "interest free" or "free flooring" periods
during which no interest or finance charges will accrue on their accounts.
FLOORPLAN PAYMENT TERMS
The Dealer is obligated to pay interest or finance charges monthly, but
principal repayment with respect to any particular item of inventory financed
by Green Tree is due and payable only upon the sale of such item by the Dealer,
subject in some cases to an ultimate maturity date. In addition, Green Tree
requires Dealers to begin repaying principal in installments if the unit has
not been sold within a specified period of time. These payments are referred to
as "curtailments." Even if a unit is subject to curtailment payments, the
outstanding balance with respect to such unit will remain fully payable upon
the sale of the unit.
Floorplan receivables generally accrue interest (subject to any "interest
free" or "free flooring" periods as described above) at a floating rate based
on a generally published prime rate or other index. Green Tree also charges the
Dealer a documentation, handling and inspection fee for each unit financed
("DHI Fees"). These fees will be included in the Finance Charge Collections
owned by the Trust. Interest and DHI Fees are due and payable on a monthly
basis.
FLOORPLAN BILLING PROCEDURES
At the beginning of each month Green Tree sends to each Dealer a billing
statement for the interest, DHI Fees, curtailments, if any, and any other non-
principal charges accrued or arising in the prior month. Payment is due in the
same month.
FLOORPLAN DEALER MONITORING
Inventory inspections are performed to physically verify the collateral used
to secure a Dealer's loan, check the condition of the inventory, account for
any missing inventory and collect any funds due. The inventory inspection is
one of the key tools utilized by CFD for monitoring inventory financed by Green
Tree, and is performed on at least a monthly basis with respect to each Dealer
account (and each location within a Dealer account to the extent that a dealer
conducts its business in more than one location). If an inspection reveals that
the Dealer has sold any inventory without immediate repayment to Green Tree,
the inventory is considered "sold and unpaid" ("SAU") and Green Tree demands
immediate repayment from the Dealer or initiates other appropriate steps to
resolve the SAU. Inspection dates within each month must vary, and unscheduled
inspections are performed whenever CFD deems it appropriate. CFD also requires
regular rotation of the individuals conducting a Dealer's inspections.
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<PAGE>
In addition, Region Managers, within their respective portfolio of Dealers,
monitor each Dealer as to their performance and adherence to Green Tree's
requirements. This includes a regular review of annual and interim financial
statements for trends, payments for sold inventory between inspections,
monitoring of Green Tree's on-going perfected security interests in the
inventory, existence of proper insurance coverage with respect to such
inventory at all times, timely payment of interest, DHI fees and curtailments,
proper recording of invoices, the maintenance of the Manufacturer Statements of
Origin which are on file with respect to each manufactured home financed, and
the requirement that all inventory stays within the repurchase period in effect
with respect to each Manufacturer.
REALIZATION ON FLOORPLAN RECEIVABLES
Upon any default by a Dealer of its obligations to Green Tree under the
related financing agreement and expiration of any and all applicable notice and
cure periods that may have been agreed to between Green Tree and such Dealer,
Green Tree may declare such Dealer's obligations immediately due and payable
and enforce all of its legal rights and remedies, including commencement of
proceedings to realize upon any collateral, subject to prevailing standards of
commercial reasonableness and good faith. Upon learning of such a default Green
Tree makes contact with the Dealer to determine whether it can develop a
workout arrangement with the Dealer to cure all defaults. If disputes with the
Dealer exist, such disputes may be submitted to arbitration. If Green Tree
determines that such an arrangement to cure a default cannot be successfully
implemented, the Dealer's payment obligations are accelerated. Green Tree then
attempts to obtain possession of the collateral. If a Manufacturer is obligated
to repurchase the collateral under a Floorplan Agreement as described above
under "Floorplan Agreements with Manufacturers", the collateral is turned over
to the related Manufacturer. Green Tree repossesses, stores and then attempts
to sell all other salable collateral in a commercially reasonable manner. See
"The Accounts--Loss Experience."
ASSET-BASED RECEIVABLES
Asset-Based Receivables that may be sold to the Transferor arise from asset
based revolving credit facilities provided to certain manufacturers and
distributors. These facilities typically involve a revolving line of credit,
often for a contractually committed period of time, pursuant to which the
borrower may draw the lesser of the maximum amount of such line of credit or a
specifically negotiated loan availability amount, subject to the availability
of adequate collateral. Interest is typically payable monthly, while principal
payments and draws are generally settled weekly or, if earlier, when and to the
extent principal outstandings exceed eligible collateral at negotiated advance
rates. The loan availability amount is determined by multiplying an agreed upon
advance rate against the value of certain types of assets. In these facilities,
Green Tree will most typically lend against finished inventory and parts in the
borrower's possession which are free and clear of other liens and otherwise in
compliance with specified standards. Green Tree will also lend against a
borrower's eligible accounts receivable. Green Tree's asset-based revolving
credit facilities are usually secured by the assets which constitute the
borrowing base against which the loan availability amount is calculated and,
occasionally, by other personal property, mortgages or other assets of the
borrower. Asset-Based Receivables are generally not supported by any Floorplan
Agreement with a Manufacturer, and for that reason generally have significantly
lower advance rates than a borrowing agreement supported by a Floorplan
Agreement with a Manufacturer.
THE RECEIVABLES
The Receivables conveyed to the Trust arise in Accounts selected from Green
Tree's portfolio of accounts on the basis of criteria set forth in the Pooling
and Servicing Agreement and the Series 1995-1 Series Supplement as applied on
the Cut-off Date and, with respect to Additional Accounts, as of the related
date of their designation (the "Trust Portfolio"). The Transferor will have the
right (subject to certain limitations and conditions set forth therein), and in
some circumstances will be obligated, to designate from time to time
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<PAGE>
Additional Accounts and to transfer to the Trust all Receivables of such
Additional Accounts, whether such Receivables are then existing or thereafter
created. Green Tree expects to transfer Receivables in Additional Accounts to
the Transferor, who will transfer such Receivables to the Trust, as Green
Tree's commercial finance business continues to grow. Any Additional Accounts
must be Eligible Accounts as of the date the Transferor designates such
accounts as Additional Accounts. Furthermore, pursuant to the Pooling and
Servicing Agreement, the Transferor has the right (subject to certain
limitations and conditions) to designate certain Accounts as Removed Accounts
and to require the Trustee to reconvey all Receivables in such Removed Accounts
to the Transferor, whether such Receivables are then existing or thereafter
created. Throughout the term of the Series, the Accounts from which the
Receivables arise will be the Accounts designated by the Transferor on the Cut-
off Date plus any Additional Accounts minus any Removed Accounts. Pursuant to
the Agreement and the Series 1995-1 Series Supplement, the Transferor will
represent and warrant to the Trust that, as of the Closing Date and the date
Receivables are conveyed to the Trust, such Receivables meet certain
eligibility requirements. See "Description of the Certificates--
Representations and Warranties."
ELIGIBLE RECEIVABLES AND ELIGIBLE ACCOUNTS
The Receivables must arise under an Eligible Account. An "Eligible Account"
is defined to mean, as of the relevant Cut-off Date (or, with respect to
Additional Accounts, as of their date of designation for inclusion in the
Trust), an arrangement to provide a revolving extension of credit by Green Tree
to a Dealer (i) in order to finance the purchase by a Dealer of consumer and
commercial product inventory or (ii) as a line of credit secured by
unencumbered assets of such Dealer, which extension of credit, as of the date
of determination thereof, (a) is in existence and maintained with Green Tree,
(b) is payable in United States dollars, (c) is with a Dealer whose most recent
billing address is in the United States or its territories or possessions, (d)
has been originated by Green Tree in the ordinary course of its business, (e)
in respect of which no amounts have been charged off by Green Tree as
uncollectible in its customary and usual manner as of the Cut-off Date (or,
with respect to Additional Accounts, as of their date of designation for
inclusion in the Trust), and (f) is with a Dealer that is not involved in
insolvency proceedings. The definition of Eligible Account may be changed by
amendment to the Pooling and Servicing Agreement without the consent of the
Certificateholders if (i) the Transferor delivers to the Trustee a certificate
of an authorized officer to the effect that, in the reasonable belief of the
Transferor, such amendment will not as of the date of such amendment adversely
affect in any material respect the interest of the Certificateholders, and (ii)
such amendment will not result in a withdrawal or reduction of the rating of
any outstanding Series under the Trust.
An "Eligible Receivable" is defined as a Receivable (a) that was originated
by Green Tree in the ordinary course of business, (b) that has arisen under an
Eligible Account, (c) that was created in compliance with all requirements of
law applicable thereto and pursuant to a floorplan or asset-based financing
agreement that complies with all requirements of law applicable thereto, (d)
with respect to which all consents, licenses or authorizations of, or
registrations with, any governmental authority required to be obtained or given
by Green Tree or the Transferor in connection with the creation of such
Receivable, or the transfer thereof to the Trust or the execution, delivery,
creation and performance by Green Tree of the related floorplan or asset-based
financing agreement have been duly obtained or given and are in full force and
effect as of the date of the creation of such Receivable, (e) as to which, at
the time of its creation, the Transferor had and at all times following the
transfer of such Receivables to the Trust, the Trust will have, good and
marketable title free and clear of all liens and security interests (other than
certain liens permitted pursuant to the Pooling and Servicing Agreement), (f)
that is the legal, valid, binding and assignable payment obligation of the
related Dealer, legally enforceable against such Dealer in accordance with its
terms (with certain bankruptcy related exceptions), (g) that constitutes
"chattel paper," an "account" or a "general intangible" under Article 9 of the
Uniform Commercial Code as then in effect in the State of Minnesota, (h) if
such Receivable has the benefit of a Floorplan Agreement with a Manufacturer,
such Floorplan Agreement provides, subject to the specific terms thereof and
any limitations therein (which may vary among Floorplan Agreements), that the
Manufacturer is obligated to repurchase the products securing the Receivables
upon the Servicer's
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<PAGE>
repossession thereof upon the related Dealer's default, (i) which has been the
subject of a valid transfer and assignment from the Transferor to the Trust of
all the Transferor's interest therein (including any proceeds thereof), (j)
which at the time of transfer to the Trust is not subject to any right of
rescission, setoff, or any other defense (including defenses arising out of
violations of usury laws) of the Dealer, (k) as to which, at the time of
transfer of such Receivable to the Trust, Green Tree and the Transferor have
satisfied all their respective obligations with respect to such Receivable
required to be satisfied at such time, (l) as to which, at the time of transfer
of such Receivable to the Trust, neither Green Tree nor the Transferor has
taken or failed to take any action which would impair the rights of the Trust
or the certificateholders therein and (m) which represents the obligation of a
Dealer to repay an advance made to or on behalf of such Dealer to finance
products or the accounts receivable arising from the sale of such products.
THE ACCOUNTS
GENERAL
The Receivables have arisen or will arise in the Accounts. The Accounts have
been selected from all the accounts that were Eligible Accounts (the "Eligible
Portfolio") at the Cut-off Date. In order to be included in the Eligible
Portfolio, each Account must be an account established by Green Tree in the
ordinary course of business and meet certain other criteria provided in the
Pooling and Servicing Agreement. See "The Receivables--Eligible Receivables and
Eligible Accounts" and "Description of the Certificates--Representations and
Warranties."
Pursuant to the Pooling and Servicing Agreement, the Transferor, and pursuant
to the Purchase Agreement, Green Tree have the right (subject to certain
limitations and conditions), and in some circumstances are obligated, to
designate from time to time additional Eligible Accounts to be included as
Accounts ("Additional Accounts") and convey to the Trust the Receivables of
such Additional Accounts, including Receivables thereafter created. These
accounts must meet the eligibility criteria set forth above as of the date such
accounts are designated as Additional Accounts. Green Tree will convey the
Receivables then existing, with certain exceptions, or thereafter created under
such Additional Accounts to the Transferor, which will in turn convey them to
the Trust. See "Description of the Certificates--Addition of Accounts."
DESCRIPTION OF THE PORTFOLIO
The following tables set forth the composition of the Receivables owned by
the Trust, as of November , 1995, by business line and other criteria.
Because Green Tree expects to designate Additional Accounts from time to time
and to transfer Receivables therein to the Transferor and thence to the Trust,
the actual composition of the Receivables by business line is expected to
change over time. In addition, due to the variability and uncertainty with
respect to the rates at which receivables in the portfolio are created, paid or
otherwise reduced, the characteristics set forth below may vary significantly
as of any other date of determination.
COMPOSITION OF RECEIVABLES IN THE TRUST BY BUSINESS LINE [/R]
NOVEMBER , 1995
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF NUMBER OF NUMBER
RECEIVABLES RECEIVABLES OF OF
BUSINESS LINE BALANCE BALANCES ACCOUNTS ACCOUNTS
------------- ----------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Manufactured Housing Floorplan
Receivables.................... $ % %
Marine Floorplan Receivables....
Recreational Vehicle Floorplan
Receivables....................
Asset-Based Receivables.........
-------- ----- -------- -----
Total......................... $ 100.0% 100.0%
======== ===== ======== =====
</TABLE>
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<PAGE>
COMPOSITION OF RECEIVABLES IN THE TRUST BY ACCOUNT BALANCE
AS OF NOVEMBER , 1995
<TABLE>
<CAPTION>
RECEIVABLES PERCENTAGE PERCENTAGE
BALANCE OF NUMBER OF NUMBER
(DOLLARS IN RECEIVABLES OF OF
ACCOUNT BALANCE RANGE MILLION) BALANCES ACCOUNTS ACCOUNTS
--------------------- ----------- ----------- -------- ----------
<S> <C> <C> <C> <C>
$1 to $999,999.99 $ % %
$1,000,000 to $2,499,999.99
$2,500,000 to $4,999,999.99
$5,000,000 to $9,499,999.99
Over $10,000,000.00
-------- ----- ------- -----
Total......................... $ 100.0% 100.0%
======== ===== ======= =====
</TABLE>
GEOGRAPHIC DISTRIBUTION OF RECEIVABLES IN THE TRUST
AS OF NOVEMBER , 1995
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
RECEIVABLES RECEIVABLES NUMBER OF NUMBER OF
DEALER LOCATION BALANCE BALANCES ACCOUNTS ACCOUNTS
--------------- ----------- ------------- --------- -------------
<S> <C> <C> <C> <C>
$ % %
Other States(1)............
-------- --- ------ ---
Total.................... $ 100% 100%
======== === ====== ===
</TABLE>
- --------
(1) The percentage of the Receivables Balance represented by Receivables in
each state not specifically listed is less than 3% of the Receivables
balance.
YIELD INFORMATION
The Receivables bear interest in their accrual periods at rates generally
equal to an index rate selected in the related financing agreement plus a
margin. Certain Receivables do not bear interest for a specified period after
their origination. During the first nine months of 1995, the receivables in
Green Tree's portfolio had a yield of % per annum. The Trust's yield on its
Receivables will be affected by the interest rates borne by Receivables, the
Discount Factor, if any, and the rate at which the Receivables balances are
paid.
MAJOR CUSTOMERS; MAJOR MANUFACTURERS
At November , 1995 no one Dealer accounted for more than % of the
aggregate balance of the Receivables in the Trust. At November , 1995 no one
Manufacturer was obligated under Floorplan Agreements relating to Receivables
aggregating more than % of the aggregate Receivables balance. At September
30, 1995, Fleetwood Enterprises was obligated under its Floorplan Agreement
with Green Tree with respect to receivables aggregating 16.65% of Green Tree's
entire portfolio. No prediction can be made as to what percentage of the
Receivables in the future may be obligations of a single Dealer or be related
to a single Manufacturer under its Floorplan Agreement, but such percentages
are subject to overconcentration amounts. See "Description of the Offered
Certificates--The Overconcentration Amounts."
35
<PAGE>
DELINQUENCY EXPERIENCE
The following table sets forth the delinquency experience as of the dates
indicated for Green Tree's entire portfolio. Because Green Tree's portfolio has
grown rapidly in the past year, and Green Tree expects to create a substantial
number of Additional Accounts that will be transferred to the Trust in the
future, the actual delinquency experience with respect to the Eligible Accounts
may be different. There can be no assurance that the delinquency experience for
the Receivables in the future will be similar to the experience shown below.
DELINQUENCY EXPERIENCE FOR TOTAL PORTFOLIO
RECEIVABLE BALANCES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE DECEMBER JUNE SEPTEMBER
1994 1994 1995 1995
------- -------- -------- ---------
<S> <C> <C> <C> <C>
Aggregate Principal Balance............. $22,284 $166,507 $421,464 $469,562
30+ Delinquencies
Curtailments.......................... $0 $24 $46 $479
Finance Charges....................... $0 $23 $322 $415
------- -------- -------- --------
Total............................... $0 $47 $368 $894
======= ======== ======== ========
0.000% 0.028% 0.087% 0.190%
======= ======== ======== ========
SAU/NSF(1).............................. n/a n/a n/a $188
======= ======== ======== ========
n/a n/a n/a 0.040%
</TABLE>
- --------
(1) A "SAU/NSF" Account is one that is deemed delinquent when (i) there is an
unpaid receivable balance as to which the related product has been sold and
such receivable balance not paid by the related Dealer or (ii) a payoff
check from the related Dealer has been returned because of insufficient
funds.
LOSS EXPERIENCE
The following table sets forth Green Tree's average principal receivables
balance and loss experience for each of the periods shown with respect to its
portfolio. Because Green Tree's portfolio has grown rapidly in the past year,
and Green Tree expects to create a substantial number of Additional Accounts
that will be transferred to the Trust in the future, actual loss experience
with respect to the Eligible Accounts may be different. Since a substantial
number of receivables from which the Receivables will be taken were only
recently originated, it may be expected that such receivables have not yet
exhibited a loss experience that is representative of the losses that may be
experienced over a longer period of time. There can be no assurance that the
loss experience for the Receivables in the future will be similar to the
historical experience set forth below with respect to the portfolio. The
historical experience set forth below includes the effect of the financial
obligations of Manufacturers in respect of repossessed products as described
above under "Green Tree Financial Corporation and its Commercial Finance
Division--Floorplan Agreements with Manufacturers". If manufacturers are not
able to perform such obligations in the future, the loss experience in respect
of the portfolio and the Receivables may be adversely affected.
36
<PAGE>
LOSS EXPERIENCE FOR THE PORTFOLIO [/R]
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED
--------------------------
DECEMBER 31, SEPTEMBER 30,
1994 1995
------------ -------------
<S> <C> <C>
Average Principal Receivables Balance(1)............ $36,221,024 $346,920,556
Gross Losses........................................ 0 24,095
Net Losses(2)....................................... 0 24,095
Net Losses as a percentage of Average Principal
Receivables Balance................................ .007%
</TABLE>
- --------
(1) Average Principal Receivables Balance is the average daily principal
balances for the eleven months ended December 31, 1994 and the nine months
ended September 30, 1995, respectively.
(2) Net losses in any period are gross losses less recoveries for such period.
Recoveries include recoveries from collateral security in addition to
recoveries from the products.
AGING EXPERIENCE
The following table provides the age distribution of inventory for all
dealers in the portfolio, as a percentage of total principal outstanding at the
date indicated. Because the Eligible Accounts will only be a portion of the
entire portfolio, actual age distribution with respect to the Eligible Accounts
may be different.
AGE DISTRIBUTION FOR THE PORTFOLIO(1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
RECEIVABLES BALANCE PERCENTAGE OF RECEIVABLES BALANCE
------------------------- --------------------------------------
NOVEMBER , NOVEMBER , NOVEMBER , NOVEMBER ,
1995 1994 1995 1994
------------ ------------ ---------------- ----------------
<S> <C> <C> <C> <C>
Days $ $ % %
1-30..................
31-60.................
61-90.................
91-120................
121-180...............
181-270...............
Over 270..............
------ ------ ---------------- ----------------
Total............... $ $ 100.0% 100.0%
====== ====== ================ ================
</TABLE>
- --------
(1) Excludes Asset-Based Receivables. Age distribution is not available prior
to .
MATURITY CONSIDERATIONS
The Pooling and Servicing Agreement provides that Class A Certificateholders
will not receive payments of principal until the Class A Scheduled Payment
Date, or earlier in the event of a Pay Out Event that results in the
commencement of the Early Amortization Period. The Pooling and Servicing
Agreement also provides that Class B Certificateholders will not receive
payments of principal until the Class B Scheduled Payment Date, or earlier in
the event of a Pay Out Event that results in the commencement of the Early
Amortization Period (in either case, only after the Class A Invested Amount has
been paid in full). The Class B Certificateholders will not receive any
payments of principal until the final principal payment on the Class A
Certificates has been made.
37
<PAGE>
Controlled Accumulation Period. On each business day during the Controlled
Accumulation Period, prior to the payment (or deposit in the Principal Account)
of the Class A Invested Amount in full, an amount equal to the lesser of (a)
Principal Collections allocable to the Class A, Class B and Class C
Certificateholders' Interest plus Shared Principal Collections, if any, from
other Series allocable to the Class A, Class B and Class C Certificates, plus
certain other amounts comprising Class A, Class B and Class C Principal, and
(b) the amount, if any, by which (i) the sum of the Controlled Accumulation
Amount for such Monthly Period plus the Accumulated Shortfall, if any (such sum
being referred to as the "Controlled Deposit Amount" for the related Monthly
Period) exceeds (ii) the amount in the Principal Account for the account of the
Class A, Class B and Class C Certificateholders, will be deposited daily in the
Principal Account.
On each business day during the Controlled Accumulation Period, following the
payment (or deposit in the Principal Account) of the Class A Invested Amount in
full but prior to the payment (or deposit in the Principal Account) of the
Class B Invested Amount in full, an amount equal to the lesser of (a) Principal
Collections allocable to the Class A, Class B and Class C Certificateholders'
Interest plus Shared Principal Collections, if any, from other Series allocable
to the Class A, Class B and Class C Certificates, plus certain other amounts
comprising Class A, Class B and Class C Principal, and (b) the amount, if any,
by which (i) the Controlled Deposit Amount for the related Monthly Period
exceeds (ii) the amount in the Principal Account for the account of the Class B
Certificateholders, will be deposited daily in the Principal Account.
Although it is anticipated that during the Controlled Accumulation Period
prior to the payment of the Class A Invested Amount in full, funds will be
deposited in the Principal Account in an amount equal to the applicable
Controlled Deposit Amount for each Monthly Period and that the Class A Invested
Amount will be available for distribution to the Class A Certificateholders on
the Class A Scheduled Payment Date, and that the Class B Invested Amount will
be available for distribution to the Class B Certificateholders on the Class B
Scheduled Payment Date, respectively, no assurance can be given in that regard.
Pay Out Event. If a Pay Out Event occurs, the Early Amortization Period will
commence and any amounts on deposit in the Principal Account will be paid to
the Class A Certificateholders on the Distribution Date in the month following
the commencement of the Early Amortization Period. In addition, to the extent
that the Class A Invested Amount has not been paid in full on the Class A
Scheduled Payment Date, the Class A Certificateholders will be entitled to
monthly payments of principal equal to the Principal Collections allocable to
the Class A, Class B and Class C Certificateholders' Interest plus Shared
Principal Collections, if any, from other Series allocable to the Class A,
Class B and Class C Certificates, plus certain other amounts comprising Class
A, Class B and Class C Principal, until the earlier of the date on which the
Class A Invested Amount has been paid in full and the Series 1995-1 Termination
Date. After the Class A Invested Amount has been paid in full and if the Series
1995-1 Termination Date has not occurred, Principal Collections allocable to
the Class B and Class C Certificateholders' Interest plus Shared Principal
Collections, if any, from other Series allocable to the Class A, Class B and
Class C Certificates, plus certain other amounts comprising Class B and Class C
Principal, will be paid to the Class B Certificateholders on each Distribution
Date until the earlier of the date on which the Class B Invested Amount has
been paid in full and the Series 1995-1 Termination Date. Thereafter, on and
after the Class C Principal Payment Commencement Date, the Class C
Certificateholders will be entitled to receive monthly payments of principal,
until the Class C Invested Amount is paid in full or until the Series 1995-1
Termination Date.
A "Pay Out Event" occurs, either automatically or after specified notice,
upon
(i) failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within five Business Days after the day on which it
is required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
(ii) failure on the part of the Transferor, the Servicer or Green Tree,
as applicable, to make certain payments or transfers of funds for the
benefit of the Certificateholders or to observe or perform in any
38
<PAGE>
material respect certain other covenants within the time periods specified
in the Pooling and Servicing Agreement;
(iii) material breaches of certain representations, warranties or
covenants of Green Tree or the Transferor which remain uncured after the
grace periods specified in the Pooling and Servicing Agreement;
(iv) the occurrence of certain events of bankruptcy, insolvency or
receivership relating to Green Tree or the Transferor;
(v) the Trust or the Transferor becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended;
(vi) on any Determination Date, the Transferor Interest for the next
Distribution Date will be reduced to an amount less than the Minimum
Transferor Interest on such Determination Date after giving effect to the
distributions to be made on the next Distribution Date;
(vii) any Servicer Default occurs;
(viii) on any Determination Date, the average of the Monthly Payment
Rates for the three preceding Monthly Periods, where the Monthly Payment
Rate for a Monthly Period is the percentage obtained by dividing the
aggregate of the Receivables balances (without deducting therefrom any
discount portion) collected during such Monthly Period by the average daily
aggregate Receivables balance (without deducting therefrom any discount
portion) for such Monthly Period, is less than 15%;
(ix) the failure to pay the outstanding principal amount of the Class A,
Class B or Class C Certificates by the Class A Scheduled Payment Date,
Class B Scheduled Payment Date or the Class C Expected Final Payment Date,
as applicable;
(x) the ratio (expressed as a percentage) of (i) the average for each
month of the net losses on the Receivables (exclusive of the Ineligible
Receivables) owned by the Trust (i.e., gross losses less recoveries on any
such Receivables (including, without limitation, recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds)) during any three consecutive
calendar months to (ii) the average of the month-end aggregate balances of
such Receivables (without deducting therefrom the discount portion) for
such three-month period, exceeds 5% on an annualized basis; provided, that
this clause (x) may be amended or waived with the consent of the Transferor
and each Rating Agency and without the consent of any Certificateholder;
and
(xi) the sum of all Eligible Investments and amounts on deposit in the
Excess Funding Account represents more than 50% of the total assets of the
Trust on each of six or more consecutive Determination Dates, after giving
effect to all payments made or to be made on the Distribution Date next
succeeding each such respective Determination Date.
39
<PAGE>
The amount of new Receivables generated in any month and payment rates on the
Receivables may vary because of seasonal variations in product sales and
inventory levels, retail incentive programs provided by product manufacturers
and various economic factors affecting product sales generally. The following
table sets forth the monthly payment rates ("MPR") for the receivables
originated by Green Tree from Dealers for each month since February 1994 and
the average monthly payment rates for such receivables for all months during
those periods shown, in each case calculated by dividing the total collections
during a given month by total opening monthly balances of such receivables
during the periods shown and expressing such amounts as a percentage. Payment
rates shown in the table are based on amounts which would be deemed payments of
Principal Receivables with respect to such receivables.
MONTHLY PAYMENT RATES FOR THE PORTFOLIO
<TABLE>
<CAPTION>
PORTFOLIO
COMPOSITION
(1)
PAYMENT -------------
MONTH/YEAR RATE PRESOLD STOCK
- ---------- ------- ------- -----
<S> <C> <C> <C>
February 1994............................................. 95% 97% 3%
March 1994................................................ 132% 100% 0%
April 1994................................................ 137% 100% 0%
May 1994.................................................. 139% 100% 0%
June 1994................................................. 122% 100% 0%
July 1994................................................. 106% 99% 1%
August 1994............................................... 112% 99% 1%
September 1994............................................ 120% 99% 1%
October 1994.............................................. 98% 83% 17%
November 1994............................................. 48% 35% 65%
December 1994............................................. 21% 10% 90%
--- --- ---
1994 Average.............................................. 56% 42% 58%
--- --- ---
January 1995.............................................. 23% 11% 89%
February 1995............................................. 19% 9% 91%
March 1995................................................ 24% 8% 92%
April 1995................................................ 25% 9% 91%
May 1995.................................................. 29% 9% 91%
June 1995................................................. 29% 10% 90%
July 1995................................................. 29% 10% 90%
August 1995............................................... 32% 10% 90%
September 1995............................................ 29% 10% 90%
--- --- ---
1995 Average (2).......................................... 27% 10% 90%
--- --- ---
Life Average.............................................. 30% 13% 87%
=== === ===
</TABLE>
- --------
(1) Green Tree began financing manufactured housing floorplan receivables on a
"Presold" basis in February 1994. Under the Presold program, floorplan
financing is provided to a dealer on units for which Green Tree has already
approved a retail contract for sale to a customer. In October 1994 Green
Tree began financing manufactured housing floorplan receivables on a dealer
"Stock" basis, and later began financing other products through the Stock
program as well.
(2) Through September 1995.
The amount of collections on Receivables may vary from month to month due to
seasonal fluctuations in sales of the products securing the Receivables and
other factors. There can be no assurance that Principal Collections with
respect to the Trust, and thus the rate at which the Certificateholders could
expect to receive payments of principal on their Certificates during the
Controlled Accumulation Period, will be similar to the historical experience
set forth above. If a Pay Out Event occurs, the average life and maturity of
the Offered
40
<PAGE>
Certificates could be significantly reduced. Certificateholders will bear the
risk of being able to reinvest principal received on the Certificates at a
yield at least equal to their yield on the Certificates. If an investor
acquires a Certificate at a discount, the repayment of principal on the
Certificate later than on the related Scheduled Payment Date will likely result
in a lower than anticipated yield. In addition, if an investor acquires a
Certificate at a premium, repayment of principal earlier than the related
Scheduled Payment Date will result in a yield to that investor that is lower
than anticipated by that investor.
USE OF PROCEEDS
The Trustee, on behalf of the Trust, will receive the Receivables from the
Transferor and, in exchange therefor, will issue the Exchangeable Transferor
Certificate, the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates to or upon the order of the
Transferor. The Transferor will apply the entire net proceeds received from the
sale of the Offered Certificates, which is expected to be approximately
$ , to pay the purchase price of the Receivables.
DESCRIPTION OF THE OFFERED CERTIFICATES
The Offered Certificates will be issued pursuant to the Pooling and Servicing
Agreement and the Series 1995-1 Supplement. Pursuant to the Pooling and
Servicing Agreement, the Transferor and the Trustee may execute additional
Supplements in order to issue additional Series.
GENERAL
The Offered Certificates will represent undivided interests in certain assets
of the Trust, including the right to the investor allocation percentage of all
Obligor payments on the Receivables in the Trust. Each Class A Certificate and
Class B Certificate represents the right to receive payments of interest at the
Class A Certificate Rate or the Class B Certificate Rate, as the case may be,
funded from Available Series Interest Collections and the right to receive
payments of principal on or after the Class A Scheduled Payment Date or the
Class B Scheduled Payment Date, as applicable, in each case funded from
Principal Collections allocated to the Class A, Class B and Class C
Certificateholders' Interests.
The Transferor will own the Exchangeable Transferor Certificate and the Class
D Certificates. The Exchangeable Transferor Certificate will represent an
undivided interest in the Trust, including the right to a percentage (the
"Transferor Percentage") of all Obligor payments on the Receivables in the
Trust equal to 100% minus the sum of the applicable investor allocation
percentages (which shall not exceed 100%) for all Series of certificates then
outstanding. See "--Certain Matters Regarding the Transferor and the Servicer."
During the Revolving Period, the amount of the Invested Amount in the Trust
will remain constant except under certain limited circumstances. See "--
Defaulted Receivables." The amount of Principal Receivables in the Trust,
however, will vary each day as new Receivables arise in the Accounts and other
Receivables are paid. The amount of the Transferor Interest (or the amount in
the Excess Funding Account, if necessary) will fluctuate each day, therefore,
to reflect the changes in the amount of the Principal Receivables in the Trust.
During the Controlled Accumulation Period, the Invested Amount will decline as
dealer payments of Principal Receivables are collected and held for
distribution or distributed to the Certificateholders. As a result, the
Transferor Interest will generally increase each month during the Controlled
Accumulation Period to reflect the reductions in the Invested Amount of such
Series and will also change to reflect the variations in the amount of the
Principal Receivables in the Trust. The Transferor Interest may be reduced as
the result of an Exchange. See "--Exchanges."
Each Class of Offered Certificates initially will be represented by
certificates registered in the name of the nominee of DTC (together with any
successor depository selected by the Transferor, the "Depository"),
41
<PAGE>
except as set forth below. Beneficial interests in each Class of Offered
Certificates will be available for purchase in minimum denominations of $1,000
and integral multiples of $1,000 in excess thereof in book-entry form only. The
Transferor has been informed by DTC that DTC's nominee will be Cede & Co.
Accordingly, Cede & Co. is expected to be the holder of record of the Offered
Certificates. Unless and until Definitive Certificates are issued under the
limited circumstances described herein, no Certificate Owner acquiring an
interest in any Class of Offered Certificates will be entitled to receive a
certificate representing such Certificate Owner's interest in such
Certificates. Until such time, all references herein to actions by
Certificateholders of any Class of Offered Certificates will refer to actions
taken by the Depository upon instructions from its participating organizations
("Participants") and all references herein to distributions, notices, reports,
and statements to Certificateholders of any Class of Offered Certificates will
refer to distributions, notices, reports, and statements to the Depository or
its nominee, as the registered holder of the Offered Certificates of such
Class, for distribution to Certificate Owners of such Class in accordance with
the Depository's procedures. See "--Book-Entry Registration" and "--Definitive
Certificates."
BOOK-ENTRY REGISTRATION
With respect to each Class of Offered Certificates in book-entry form,
Certificateholders may hold their Certificates through DTC (in the United
States) or CEDEL or Euroclear (in Europe), if they are participants of such
systems, or indirectly through organizations that are participants in such
systems.
Cede, as nominee for DTC, will hold the global certificates. CEDEL and
Euroclear will hold omnibus positions on behalf of the CEDEL Participants and
the Euroclear Participants, respectively, through customers' securities
accounts in CEDEL's and Euroclear's names on the books of their respective
depositaries (collectively, the "Depositaries") which in turn will hold such
positions in customers' securities accounts in the Depositaries' names on the
books of DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities for its Participants ("Participants") and facilitates the
clearance and settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Participants include securities brokers
and dealers, banks, trust companies, clearing corporations, and certain other
organizations. Indirect access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust companies that dear
through or maintain a custodial relationship with a Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between CEDEL Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly through
DTC in the United States, on the one hand, and directly or indirectly through
CEDEL Participants or Euroclear Participants on the other, will be effected in
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. CEDEL Participants and Euroclear Participants may not deliver instructions
directly to the Depositaries.
42
<PAGE>
Because of time-zone differences, credits or securities in CEDEL or Euroclear
as a result of a transaction with a DTC Participant will be made during the
subsequent securities settlement processing, dated the business day following
the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant
CEDEL Participant or Euroclear Participant on such business day. Cash received
in CEDEL or Euroclear as a result of sales of securities by or through a CEDEL
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
CEDEL or Euroclear cash account only as of the business day following
settlement in DTC.
Purchases of Offered Certificates under the DTC system must be made by or
through Participants, which will receive a credit for the Offered Certificates
on DTC's records. The ownership interest of each actual Certificate Owner is in
turn to be recorded on the Participants' and Indirect Participants' records.
Certificate Owners will not receive written confirmation from DTC of their
purchase, but Certificate Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Participant or Indirect Participant through which the
Certificate Owner entered into the transaction. Transfers of ownership
interests in the Offered Certificates are to be accomplished by entries made on
the books of Participants acting on behalf of Certificate Owners. Certificate
Owners will not receive certificates representing their ownership interest in
Offered Certificates, except in the event that use of the book-entry system for
the Offered Certificates is discontinued.
To facilitate subsequent transfers, all Offered Certificates deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Offered Certificates with DTC and their registration
in the name of Cede & Co. effects no change in beneficial ownership. DTC has no
knowledge of the actual Certificate Owners; DTC's records reflect only the
identity of the Participants to whose accounts such Offered Certificates are
credited, which may or may not be the Certificate Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Certificate Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Offered
Certificates. Under its usual procedures, DTC mails an omnibus proxy to the
issuer as soon as possible after the record date, which assigns Cede & Co.'s
consenting or voting rights to those Participants to whose accounts the Offered
Certificates are credited on the record date (identified in a listing attached
thereto).
Principal and interest payments on the Offered Certificates will be made to
DTC. DTC's practice is to credit Participants' accounts on the Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on the Distribution
Date. Payments by Participants to Certificate Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Trustee or the Transferor, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of the Trustee, disbursement of such payments to
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Certificate Owners shall be the responsibility of Participants
and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Offered Certificates at any time by giving reasonable notice to
the Transferor or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, Definitive Certificates are
required to be printed and delivered. The Transferor may decide to discontinue
use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Definitive Certificates will be printed
and delivered.
43
<PAGE>
CEDEL S.A. ("CEDEL") is incorporated under the laws of Luxembourg as a
professional depository. CEDEL holds securities for its participating
organizations ("CEDEL Participants") and facilitates the clearance and
settlement of securities transactions between CEDEL Participants through
electronic book-entry changes in accounts of CEDEL Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled by CEDEL in any of 28 currencies, including United States dollars.
CEDEL provides to its CEDEL Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. CEDEL interfaces with domestic
markets in several countries. As a professional depository, CEDEL is subject to
regulations by the Luxembourg Monetary Institute. CEDEL Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the underwriters of any Series
of Certificates. Indirect access to CEDEL is also available to others, such as
banks, brokers, dealers and trust companies that dear through or maintain a
custodial relationship with a CEDEL Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Transactions may now be
settled in any of 32 currencies, including United States dollars. The Euroclear
System includes various other services, including securities lending and
borrowing and interfaces with domestic markets in several countries generally
similar to the arrangements for cross-market transfers with DTC described
above. The Euroclear System is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office (the "Euroclear Operator" or "Euroclear"), under
contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear system on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters of any Series of Certificates. Indirect access
to the Euroclear System is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either directly
or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear Operator
acts under the Terms and Conditions only on behalf of Euroclear Participants
and has no record of or relationship with persons holding through Euroclear
Participants.
Distributions with respect to Offered Certificates held through CEDEL or
Euroclear will be credited to the cash accounts of CEDEL Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions will
be subject to tax reporting in accordance with relevant United States tax laws
and regulations. CEDEL or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a Certificateholder under
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the related Pooling and Servicing Agreement on behalf of a CEDEL Participant or
a Euroclear Participant only in accordance with its relevant rules and
procedures and subject to its Depositary's ability to effect such actions on
its behalf through DTC.
Although DTC, CEDEL and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of Offered Certificates among participants of
DTC, CEDEL and Euroclear, they are under no obligation to perform or continue
to perform such procedures and such procedures may be discontinued at any time.
DEFINITIVE CERTIFICATES
Each Class of Offered Certificates will be issued in such registered,
certificated form to the Certificate Owners of such Class or their nominees
("Definitive Certificates"), rather than to the Depository or its nominee, only
if (i) the Transferor advises the Trustee in writing that the Depository is no
longer willing or able to discharge properly its responsibilities as Depository
with respect to the Offered Certificates of such Class, and the Trustee or the
Transferor is unable to locate a qualified successor, (ii) the Transferor, 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 a
Servicer Default, Certificate Owners representing not less than 50% of the
Invested Amount of such Class advise the Trustee and the Depository through
Participants in writing that the continuation of a book-entry system through
the Depository is no longer in the best interest of the Certificate Owners of
such Class.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Depository is required to notify all Participants of
the availability through the Depository of Definitive Certificates. Upon
surrender by the Depository of the definitive certificate representing the
Offered Certificates of the affected Class and instructions for registration,
the Trustee will issue the Offered Certificates of such Class as Definitive
Certificates, and thereafter the Trustee will recognize the holders of such
Definitive Certificates as Certificateholders under the Pooling and Servicing
Agreement.
Distribution of principal and interest on the Offered Certificates will be
made by the Trustee directly to Certificateholders in accordance with the
procedures set forth herein and in the Pooling and Servicing Agreement.
Interest payments and any principal payments on each Distribution Date will be
made to Certificateholders in whose names the Definitive Certificates were
registered at the close of business on the related Record Date. Distributions
will be made by check mailed to the address of such Certificateholder as it
appears on the register maintained by the Trustee. The final payment on any
Offered Certificate, however, will be made only upon presentation and surrender
of such Certificate at the office or agency specified in the notice of final
distribution to Certificateholders. The Trustee will provide such notice to
registered Certificateholders mailed not later than the fifth day of the month
of such final distributions.
Definitive Certificates will be transferable and exchangeable at the offices
of the transfer agent and registrar, which initially will be the Trustee (in
such capacity, the "Transfer Agent and Registrar"). No service charge will be
imposed for any registration of transfer or exchange, but the Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith. The Transfer Agent and
Registrar will not be required to register the transfer or exchange of
Definitive Certificates for the period from the Record Date preceding the due
date for any payment to the Distribution Date with respect to such Definitive
Certificates.
INTEREST PAYMENTS
Interest on the respective outstanding balance of each Class of Certificates
(other than the Class D Certificates) will accrue at the applicable Certificate
Rate and will be payable on the 15th day of each month, or if such day is not a
business day, on the next succeeding business day (each a "Distribution Date"),
beginning December 15, 1995. Interest will accrue from and including the
preceding Distribution Date (or,
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in the case of the first Distribution Date, from and including the Closing
Date) to but excluding such Distribution Date and will be calculated on the
basis of the actual number of days in the related Interest Accrual Period
divided by 360 days.
Interest on the outstanding principal balance of the Class A Certificates
will accrue for each Interest Accrual Period at the Class A Certificate Rate
which shall equal the lesser of (i) LIBOR (calculated as described below)
determined as of the second LIBOR business day prior to such Interest Accrual
Period plus % per annum or (ii) the Net Receivables Rates (described
below). Interest on the outstanding principal balance of the Class B
Certificates will accrue for each Interest Accrual Period at the Class B
Certificate Rate which shall equal the lesser of (i) LIBOR determined as of the
second LIBOR business day prior to such Interest Accrual Period plus % per
annum or (ii) the Net Receivables Rate (described below).
The Class C Certificates will bear interest at a rate equal to a specified
margin in excess of LIBOR determined as set forth below.
The Trustee will determine LIBOR on for the period from
through and will determine LIBOR for each Interest
Accrual Period following the initial Interest Accrual Period on the second
business day prior to the Distribution Date on which such Interest Accrual
Period commences (each, a "LIBOR Determination Date"). For purposes of
calculating LIBOR, a business day is any day on which banks in London and New
York are open for the transaction of international business. The Trustee will
determine LIBOR in accordance with the following provisions:
(i) On each LIBOR Determination Date, the Trustee will determine LIBOR on
the basis of quotations of the offered rates for one-month United States
dollar deposits following the LIBOR Determination Date provided by four
major banks in the London interbank market selected by the Servicer (the
"Reference Banks") as of 11:00 a.m. (London time) as such quotations appear
on the Telerate Page 3875 of the Dow Jones Telerate Service (or such other
page as may replace Telerate Page 3875 on that service for the purpose of
displaying London interbank offered rates of major banks). LIBOR as
determined by the Trustee is the arithmetic mean of such quotations
(rounded, if necessary, to the nearest multiple of 0.0625% per annum).
(ii) If, on any LIBOR Determination Date, at least two but fewer than all
of the Reference Banks provide quotations, LIBOR will be determined in
accordance with clause (i) above on the basis of the offered quotations of
those Reference Banks providing such quotations.
(iii) If, on the LIBOR Determination Date, only one or none of the
Reference Banks provides such offered quotations, LIBOR will be:
(a) the rate per annum (rounded as aforesaid) that the Trustee
determines to be either (x) the arithmetic mean of the offered
quotations that leading banks in The City of New York selected by the
Servicer are quoting on the relevant LIBOR Determination Date for one-
month United States dollar deposits to the principal London office of
each of the Reference Banks or those of them (being at least two in
number) to which such offered quotations are, in the opinion of the
Servicer, being so made or (y) in the event the Trustee can determine
no such arithmetic mean, the arithmetic mean of the offered quotations
that leading banks in The City of New York selected by the Servicer are
quoting on such LIBOR Determination Date to leading European banks for
one-month United States dollar deposits; or
(b) if the banks selected as aforesaid by the Servicer are not
quoting as described in clause (a) above, LIBOR for such Interest
Accrual Period will be LIBOR as determined on the previous LIBOR
Determination Date.
The "Net Receivables Rate" for a Distribution Date is (i) the weighted
average of the interest rates borne by the Receivables during the second
preceding Monthly Period (because interest payments on the
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Receivables at such rates will be due and payable in the Monthly Period
preceding such Distribution Date), plus (ii) the product of (x) the Monthly
Payment Rate for the Monthly Period preceding such Distribution Date, (y) the
Discount Factor, if any, for such Distribution Date and (z) twelve, less 2% per
annum, unless the Servicing Fee has been waived for such Monthly Period. The
"Monthly Payment Rate" for a Monthly Period is the percentage equivalent of a
fraction, the numerator of which is the aggregate of the Receivables balances
(without deducting therefrom the discount portion, if any) collected during
such Monthly Period and denominator of which is the average daily aggregate
Receivables balance (without deducting therefrom the discount portion, if any)
for such Monthly Period.
The Class A Certificate Rate and the Class B Certificate Rate applicable to
the then current and immediately preceding Interest Accrual Period may be
obtained by telephoning the Trustee at its Corporate Trust Office at .
Following the listing of the Offered Certificates on the Luxembourg Stock
Exchange, the Trustee will cause the Class A Certificate Rate and the Class B
Certificate Rate applicable to an Interest Accrual Period to be provided to the
Luxembourg Stock Exchange as soon as possible after its determination but in no
event later than the first day of such Interest Accrual Period.
PRINCIPAL PAYMENTS
During the Revolving Period (which begins on the Closing Date and ends on the
day before the earliest of (i) the Initial Principal Payment Date, (ii) the
commencement of the Controlled Accumulation Period or (iii) the commencement of
an Early Amortization Period), no principal payments will be made to the
Certificateholders. During the Controlled Accumulation Period, principal will
be paid to the Principal Account on each business day and such amounts will be
distributed to the Class A Certificateholders on the Class A Scheduled Payment
Date, then to the Class B Certificateholders on the Class B Scheduled Payment
Date, then to the Class C Certificateholders until the Class C Invested Amount
is paid in full, and finally to the Class D Certificateholders until the Class
D Invested Amount is paid in full. The amount of principal deposited in the
Principal Account during each Monthly Period during the Controlled Accumulation
Period will not exceed the Controlled Deposit Amount. See "--Pay Out Events"
for a discussion of events which might lead to the commencement of the Early
Amortization Period prior to the first day of the Monthly Period.
See "--Application of Collections" for a discussion of the method by which
Principal Collections are allocated during the Controlled Accumulation Period.
Principal Collections for any Monthly Period allocated to the Class A, Class
B and Class C Certificateholders' Interests will first be used to cover, with
respect to any Monthly Period during the Controlled Accumulation Period,
required deposits into the Principal Account for the benefit of the Class A
Certificateholders. On and after the Class B Principal Payment Commencement
Date, Principal Collections for any Monthly Period allocated to the Class A,
Class B and Class C Certificateholders' Interests will first be used to cover
required deposits into the Principal Account for the benefit of the Class B
Certificateholders. On and after the Class C Principal Payment Commencement
Date, Principal Collections for any Monthly Period allocated to the Class A,
Class B and Class C Certificateholders' Interests will first be used to cover
required deposits into the Principal Account for the benefit of the Class C
Certificateholders. The Servicer will determine the amount of Principal
Collections for any business day allocated to the Class A, Class B and Class C
Certificateholders' Interests and remaining after covering required deposits or
payments of principal to the Certificateholders and any similar amount
remaining with respect to certificates of any other Series (other than amounts
allocated to Transferor Retained Classes) (collectively, "Shared Principal
Collections"). The Servicer will allocate the Shared Principal Collections to
cover any scheduled or permitted principal distributions to certificateholders
and deposits to principal funding accounts, if any, for any Series that have
not been covered out of the Principal Collections allocable to such Series and
certain other amounts ("Principal Shortfalls"). Shared Principal Collections
will not be used to cover investor charge-offs for any Series. If Principal
Shortfalls exceed Shared Principal Collections on any business day, Shared
Principal Collections will be allocated pro rata among the applicable Series
based on the relative amounts of Principal Shortfalls. To the extent that
Shared Principal Collections exceed Principal Shortfalls, the balance will,
subject to certain limitations, be paid to the holder of the Exchangeable
Transferor Certificate.
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EXTENSION OF INITIAL PRINCIPAL PAYMENT DATE
Unless an Early Amortization Event has occurred, principal with respect to
the Class A Certificates is expected to be paid on the Class A Scheduled
Payment Date and principal with respect to the Class B Certificates is expected
to be paid on the Class B Scheduled Payment Date, provided that the
Certificateholders will receive payments of principal earlier than such dates
if the Servicer elects not to extend the Initial Principal Payment Date. The
Initial Principal Payment Date will initially be the December 1997 Distribution
Date, but will successively and automatically be extended to the next
Distribution Date after the then-current Initial Principal Payment Date unless
the Servicer elects not to so extend; provided that the Initial Principal
Payment Date may not be later than the Class A Scheduled Payment Date. In the
event that the Servicer elects not to extend the Initial Principal Payment
Date, the Revolving Period or the Controlled Accumulation Period, as
applicable, will end, and amounts then on deposit in the Principal Account and
Principal Collections with respect to each Distribution Date commencing on the
Initial Principal Payment Date will be paid first to the Class A
Certificateholders until the earlier of the date on which the Class A Invested
Amount is paid in full or the Series 1995-1 Termination Date, and thereafter
all Principal Collections will be paid to the Class B Certificateholders until
the earlier of the date on which the Class B Invested Amount is paid in full or
the Series 1995-1 Termination Date.
The Servicer will cause the Trustee to provide written notice to each
Certificateholder, the Transferor, the Rating Agency and the Luxembourg Stock
Exchange of any election by the Servicer not to extend the Initial Principal
Payment Date. The Servicer will cause the Trustee to mail such notice not more
than 60 nor less than 30 days prior to the then-current Initial Principal
Payment Date.
POSTPONEMENT OF CONTROLLED ACCUMULATION PERIOD
The Controlled Accumulation Period is currently expected to commence at the
close of business on ; however, the date on which the Controlled
Accumulation Period actually commences may be delayed if the Controlled
Accumulation Period Length (determined as described below) is less than the
number of months remaining between each Period Length Determination Date
(defined herein) and the Class A Scheduled Payment Date. Beginning on the
Determination Date immediately preceding the Distribution Date and on
each Determination Date thereafter until the Controlled Accumulation Period
actually commences (each, a "Period Length Determination Date"), the Transferor
will determine the "Controlled Accumulation Period Length" based on, among
other things, the then current principal payment rate on the Accounts (and the
principal amount of other Series that will give rise to Shared Principal
Collections with Series 1995-1); provided, however, that the Controlled
Accumulation Period Length will not be less than one month. If the Controlled
Accumulation Period Length is less than the number of months remaining between
the related Period Length Determination Date and the Class A Scheduled Payment
Date, the Controlled Accumulation Period will commence later than the close of
business on and the number of months in the Controlled Accumulation
Period will be equal to the Controlled Accumulation Period Length. The effect
of the foregoing calculation is to reduce the Controlled Accumulation Period
Length based on the invested amounts of other Series that are scheduled to be
in their revolving periods and thus scheduled to create Shared Principal
Collections during the Controlled Accumulation Period. In addition, if the
Controlled Accumulation Period Length has been determined to be less than 12
months and, after the date on which such determination is made, a Pay Out Event
occurs with respect to any such other Series, the Controlled Accumulation
Period will commence on the earlier of (i) the date that such Pay Out Event
occurred with respect to such Series and (ii) the date on which the Controlled
Accumulation Period is then scheduled to commence.
INTEREST COLLECTIONS; PRINCIPAL COLLECTIONS
The Servicer will allocate the aggregate amount of Collections available in
the Collection Account (or shall instruct the Trustee to so allocate from
amounts on deposit in the Collection Account if all Collections are being
deposited therein as described below under "--Application of Collections;
Allocations") on each
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business day to Interest Collections and Principal Collections. "Interest
Collections" are calculated as the sum of (A) all collections of interest and
other fees on the Receivables, (B) all Imputed Yield Collections (if a Discount
Rate is then in effect), (C) investment earnings on amounts on deposit in the
Trust Accounts on such business day and (D) Recoveries on such business day.
"Principal Collections" are such Collections other than Interest Collections.
SUBORDINATION OF THE CLASS B CERTIFICATES
The Class B Certificates will be subordinated to the extent necessary to fund
certain payments with respect to the Class A Certificates. To the extent the
Class B Invested Amount is reduced, the percentage of Interest Collections
allocated to the Class B Certificateholders in subsequent Monthly Periods will
be reduced. Moreover, to the extent the amount of such reduction in the Class B
Invested Amount is not reimbursed, the amount of principal distributable to the
Class B Certificateholders will be reduced.
The Class C Certificates will be subordinated to the extent necessary to fund
certain payments with respect to the Class A Certificates and the Class B
Certificates. To the extent the Class C Invested Amount is reduced, the
percentage of Interest Collections allocated to the Class C Certificateholders
in subsequent Monthly Periods will be reduced. Moreover, to the extent the
amount of such reduction in the Class C Invested Amount is not reimbursed, the
amount of principal distributable to the Class C Certificateholders will be
reduced.
If, on any Determination Date, the aggregate Investor Default Amount, if any,
for each business day in the preceding Monthly Period exceeds (a) the aggregate
amount of Available Series Interest Collections applied to the payment thereof
as described in clauses (v) and (vi) of "--Application of Collections--Payment
of Fees, Interest, and Other Items," (b) the amount of Excess Interest
Collections allocated thereto as described in "--Reallocation of Cash Flows,"
and (c) the amount of Reallocated Principal Collections allocated with respect
thereto as described in "--Reallocated Principal Collections," the Class D
Invested Amount will be reduced by the amount by which such aggregate Investor
Default Amount exceeds the amount applied with respect thereto during the
preceding Monthly Period. Such reductions of the Class D Invested Amount will
thereafter be reimbursed and the Class D Invested Amount increased on each
business day by the amount, if any, of Available Series Interest Collections
and Excess Interest Collections allocated and available for that purpose.
In the event that any such reduction of the Class D Invested Amount would
cause the Class D Invested Amount to be a negative number, the Class D Invested
Amount will be reduced to zero and the Class C Invested Amount will be reduced
by the amount by which the Class D Invested Amount would have been reduced
below zero, but not more than the remaining aggregate Investor Default Amount
for such preceding Monthly Period. Such reductions of the Class C Invested
Amount will thereafter be reimbursed and the Class C Invested Amount increased
during such Monthly Period by the amount, if any, of such Available Series
Interest Collections and Excess Interest Collections for such business day
allocated and available for that purpose.
In the event that any such reduction of the Class C Invested Amount would
cause the Class C Invested Amount to be a negative number, the Class C Invested
Amount will be reduced to zero and the Class B Invested Amount will be reduced
by the amount by which the Class C Invested Amount would have been reduced
below zero, but not more than the remaining aggregate Investor Default Amount
for such Monthly Period. Such reductions of the Class B Invested Amount will
thereafter be reimbursed and the Class B Invested Amount increased on each
business day by the amount, if any, of Available Series Interest Collections
and Excess Interest Collections for such business day allocated and available
for that purpose. If the Class B Invested Amount is reduced to zero, the Class
A Invested Amount will be reduced by the amount by which the Class B Invested
Amount would have been reduced below zero, but not more than the remaining
aggregate Investor Default Amount for such Monthly Period. Such reductions of
the Class A Invested
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Amount will thereafter be reimbursed and the Class A Invested Amount increased
on each business day by the amount, if any, of Available Series Interest
Collections and Excess Interest Collections allocated and available for that
purpose. See "--Reallocation of Cash Flows," "--Reallocated Principal
Collections" and "--Investor Charge-Offs."
TRANSFER AND ASSIGNMENT OF RECEIVABLES AND COLLATERAL SECURITY
On the Closing Date, the Transferor will transfer and assign to the Trust all
of its right, title, and interest in and to the Receivables and the related
Collateral Security outstanding as of the Closing Date, all of the Receivables
thereafter arising in the Accounts and its interest in the related Collateral
Security and the proceeds of all of the foregoing. Prior to such transfer and
assignment and pursuant to the Purchase Agreement, Green Tree will contribute
and sell to the Transferor all its right, title and interest in and to the
Receivables and the related Collateral Security existing as of the Cut-off Date
and all the Receivables and the related Collateral Security arising in the
Accounts from time to time thereafter. On the Closing Date, and concurrently
with the transfer and assignment of the Receivables and related Collateral
Security to the Trust, the Trustee will authenticate the Certificates and
deliver the Certificates to the Transferor which will in turn deliver the
Offered Certificates to the Underwriters against payment of the net proceeds of
the sale of the Offered Certificates. The Trustee will also authenticate and
deliver the Exchangeable Transferor Certificate to the Transferor.
Green Tree, for itself and as Servicer, will identify in its computer files
that the Receivables have been assigned to the Trust. Green Tree, as Servicer,
will retain and will not deliver to the Trustee any other records or agreements
relating to the Receivables. The records and agreements relating to the
Receivables will not be segregated from those relating to other accounts and
receivables of Green Tree and the physical documentation relating to the
Receivables will not be stamped or marked to reflect the transfer of the
Receivables to the Trust. The Trustee will have reasonable access to such
records and agreements as required by applicable law or to enforce the rights
of the Certificateholders. Green Tree will file one or more UCC-1 financing
statements in accordance with the UCC to perfect the Transferor's interest in
the Receivables, the Collateral Security and the proceeds thereof as
applicable. The Transferor, in turn, will file one or more UCC-1 financing
statements in accordance with applicable state law to perfect the Trust's
interest in the Receivables, the Collateral Security and the proceeds thereof.
See "Risk Factors"--"Transfer of the Receivables; Insolvency Risk
Considerations" and "Certain Legal Aspects of the Receivables."
EXCHANGES
The Pooling and Servicing Agreement provides for the Trustee to issue two
types of certificates: (i) one or more Series of certificates, each of which
may have one or more classes, and (ii) the Exchangeable Transferor Certificate.
The Exchangeable Transferor Certificate will evidence the Transferor Interest,
will initially be held by the Transferor, and will be transferable only as
provided in the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement also provides that, pursuant to any one or more Supplements to the
Pooling and Servicing Agreement, the holder of the Exchangeable Transferor
Certificate may tender the Exchangeable Transferor Certificate and the
certificates evidencing any Series of certificates, to the Trustee in exchange
for one or more new Series and a reissued Exchangeable Transferor Certificate.
Under the Pooling and Servicing Agreement, the holder of the Exchangeable
Transferor Certificate may define, with respect to any newly issued Series,
certain terms including: (i) its name or designation; (ii) its initial invested
amount (or method for calculating such amount); (iii) its certificate rate (or
the method of allocating interest payments or other cash flows to such Series);
(iv) the closing date; (v) the rating agency or agencies, if any, rating the
Series; (vi) the interest payment date or dates and the date or dates from
which interest shall accrue; (vii) the name of the clearing agency, if any;
(viii) the method for allocating collections to certificateholders of such
Series with respect to Principal Collections, Interest Collections, and
Defaulted Receivables and the method by which the principal amount of such
Series will amortize or accrue; (ix) the names of any accounts to be used by
such Series and the terms governing the operation of any such accounts;
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(x) the percentage used to calculate monthly servicing fees; (xi) the Minimum
Transferor Interest; (xii) the credit enhancement provider, if applicable, and
the terms of any credit enhancement with respect to such Series; (xiii) the
base rate applicable to such Series; (xiv) the terms on which the certificates
of such Series may be repurchased or remarketed to other investors; (xv) the
termination date of such Series; (xvi) any deposit into any account provided
for such Series; (xvii) the number of classes of such Series and, if more than
one class, the rights and priorities of each such class; (xviii) the fees, if
any, to be included in funds available to certificateholders in such Series;
(xix) the subordination, if any, of such new Series with respect to any other
Series; (xx) the rights, if any, of the holder of the Exchangeable Transferor
Certificate that have been transferred to the holders of such Series; (xxi) the
pool factor (consisting of a seven-digit decimal expressing the ratio of the
invested amount to the initial invested amount); (xxii) the Minimum Aggregate
Principal Receivables; (xxiii) whether such Series will be part of a group or
subject to being paired with any other prefunded Series; (xxiv) whether such
Series will be prefunded; and (xxv) any other relevant terms, including whether
or not such Series will be pledged as collateral for an issuance of any other
securities, including commercial paper (all such terms, the "Principal Terms"
of such Series). None of the Transferor, the Servicer, the Trustee, or the
Trust is required or intends to obtain the consent of any Certificateholder to
issue any additional Series or in connection with the determination of the
Principal Terms thereof. However, as a condition of an Exchange, the holder of
the Exchangeable Transferor Certificate will deliver to the Trustee written
confirmation that the Exchange will not result in any Rating Agency reducing or
withdrawing its rating of any outstanding Series, including the Offered
Certificates. The Transferor may offer any Series to the public or other
investors in transactions either registered under the Securities Act or exempt
from registration thereunder, directly, through one or more underwriters or
placement agents, in fixed-price offerings, in negotiated transactions, or
otherwise. Any such Series may be issued in fully registered or book-entry form
in minimum denominations determined by the Transferor. The Certificates
represent the Series initially issued by the Trust. The Transferor currently
intends to offer, from time to time, additional Series.
The Pooling and Servicing Agreement provides that the holder of the
Exchangeable Transferor Certificate may perform Exchanges and define the
Principal Terms of each Series, including the period during which amortization
of the principal amount thereof is intended to occur, which period may have a
different length and begin on a different date than such period for any other
Series. Accordingly, one or more Series may be in their amortization periods
while other Series are not. Moreover, any Series may have the benefit of a
credit enhancement that is available only to such Series. Under the Pooling and
Servicing Agreement, the Trustee will hold any such form of credit enhancement
only on behalf of the Series with respect to which it relates. Likewise, with
respect to each such form of credit enhancement, the holder of the Exchangeable
Transferor Certificate may deliver a different form of credit enhancement
agreement. The Pooling and Servicing Agreement also provides that the holder of
the Exchangeable Transferor Certificate may specify different coupon rates and
monthly servicing fees with respect to each Series (or a particular class
within such Series). Collections allocated to Interest Receivables not used to
pay interest on the certificates, the monthly servicing fee, the investor
default amount, or investor charge-offs with respect to any Series will be
allocated as provided in such credit enhancement agreement, if applicable. The
holder of the Exchangeable Transferor Certificate also has the option under the
Pooling and Servicing Agreement to vary between Series the terms upon which a
Series (or a particular class within such Series) may be repurchased by the
Transferor or remarketed to other investors. Additionally, certain Series may
be subordinated to other Series, and classes within a Series may have different
priorities. The Series 1995-1 Supplement does not permit the subordination of
the Certificates to any other Series that may be issued by the Trust (except to
the limited extent described herein with respect to Shared Principal
Collections and Excess Interest Collections). There is no limit to the number
of Exchanges that may be performed under the Pooling and Servicing Agreement.
The Trust will terminate only as provided in the Pooling and Servicing
Agreement.
An Exchange may occur only upon the satisfaction of certain conditions
provided in the Pooling and Servicing Agreement. The holder of the Exchangeable
Transferor Certificate may perform an Exchange by notifying the Trustee at
least five business days in advance of the date upon which the Exchange is to
occur. The notice will state the designation of any Series to be issued on the
date of the Exchange and, with respect
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to each such Series: (i) its initial principal amount (or method for
calculating such amount), (ii) its certificate rate (or the method of
allocating interest payments or other cash flows to such Series), and (iii) the
provider of the credit enhancement, if any, which is expected to provide credit
support with respect to it. The Pooling and Servicing Agreement provides that
on the date of the Exchange the Trustee will authenticate any such Series only
upon delivery to the Trustee of the following: (i) a Supplement to the Pooling
and Servicing Agreement specifying the Principal Terms of such Series, (ii) an
opinion of counsel to the effect that the certificates of such Series will be
characterized as indebtedness or as partnership interests under existing law
for federal and applicable state income tax purposes and that the issuance of
such Series will not materially adversely affect the federal income tax
characterization of any outstanding Series, including Series 1995-1, or result
in the trust being subject to tax at the entity level for federal or applicable
state tax purposes, (iii) if required by such Supplement, the form of credit
enhancement and an appropriate credit enhancement agreement with respect
thereto executed by the Transferor and the issuer of the credit enhancement,
(iv) written confirmation from each Rating Agency that the Exchange will not
result in such Rating Agency's reducing or withdrawing its rating on any then-
outstanding Series rated by it, including Series 1995-1, (v) the existing
Exchangeable Transferor Certificate and, if applicable, the certificates
representing the Series to be exchanged, and (vi) an officer's certificate of
the Transferor stating that, after giving effect to such Exchange, (a) the
Transferor Interest would be at least equal to the Minimum Transferor Interest,
and (b) taking into account the certificates of the newly issued Series, more
than 20% (by Invested Amount and by value) of the outstanding certificates
issued by the Trust with respect to which no opinion of counsel was issued that
the applicable class would be treated as debt for federal income tax purposes
(including the Exchangeable Transferor Certificate and each Transferor Retained
Class) shall, by their terms, be prohibited from being transferred.
Under the Pooling and Servicing Agreement, the Transferor may also exchange
the Exchangeable Transferor Certificate for a newly issued Exchangeable
Transferor Certificate and a second certificate (a "Supplemental Certificate")
the terms of which will be defined in a supplement upon the satisfaction of
certain conditions provided in the Pooling and Servicing Agreement.
REPRESENTATIONS AND WARRANTIES
The Transferor will make representations and warranties to the Trust relating
to the Accounts, the Receivables and the Collateral Security to the effect,
among other things, that (a) as of the Cut-off Date, the Closing Date and the
date of issuance of any other Series (a "Series Issuance Date") (or, in the
case of an Additional Account, as of the date of its designation for inclusion
in the Trust and the date the related Receivables are transferred to the Trust
(an "Addition Date")), each Account or Additional Account was or is an Eligible
Account or, if it was or is an Ineligible Account on such date, such Account is
being removed from the Trust in accordance with the requirements of the Pooling
and Servicing Agreement, (b) as of the Cut-off Date (or as of the Additional
Cut-off Date, in the case of any Additional Accounts) or as of the date any
future Receivable is generated (a "Transfer Date"), each Receivable is an
Eligible Receivable or, if such Receivable is not an Eligible Receivable, such
Receivable is conveyed to the Trust as described below under "Eligible Accounts
and Eligible Receivables," (c) each Receivable and all Collateral Security
conveyed to the Trust on the Series 1995-1 Closing Date and on each Transfer
Date or, in the case of Additional Accounts, on the Addition Date, and all of
the Transferor's right, title and interest in the Purchase Agreement, have been
conveyed to the Trust free and clear of any liens, and (d) all appropriate
consents and governmental authorizations required to be obtained by the
Transferor in connection with the conveyance of each such Receivable have been
duly obtained. If the Transferor breaches any representation and warranty
described in this paragraph, such breach remains uncured for 30 days (or such
longer period as may be agreed to by the Trustee) after the earlier to occur of
the discovery of such breach by the Transferor or the Servicer or receipt of
written notice of such breach by the Transferor or the Servicer, and such
breach has a materially adverse effect on the Certificateholders' Interest or
the interests of the holders of other outstanding Series in any Receivable or
Account, the Certificateholders' Interest and such other certificateholders'
interests in such Receivable or, in the case of a breach relating to an
Account, all Receivables in the related Account ("Ineligible Receivables") will
be reassigned to the Transferor on the terms and conditions set forth below and
such Account shall no longer be included as an Account.
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Each Ineligible Receivable will be reassigned to the Transferor on or before
the end of the Collection Period in which such reassignment obligation arises
by the Transferor directing the Servicer to deduct the balance of such
Receivable (discounted by the Discount Factor, if any, for the Collection
Period preceding such Determination Date) from the Pool Balance. In the event
that such deduction would cause the Transferor Interest to be less than the
Minimum Transferor Interest on the preceding Determination Date (after giving
effect to the allocations, distributions, withdrawals and deposits to be made
on such Distribution Date), on the date on which such reassignment is to occur
the Transferor will be obligated to make a deposit into the Collection Account
in immediately available funds in an amount equal to the amount by which the
Transferor Interest would be less than the Minimum Transferor Interest (the
amount of any such deposit being referred to herein as a "Transfer Deposit
Amount"), provided that if the Transfer Deposit Amount is not so deposited, the
principal balance of the related Receivables will be deducted from the Pool
Balance only to the extent the Transferor Interest is not reduced below the
Minimum Transferor Interest and any principal balance not so deducted will not
be reassigned and will remain part of the Trust. The reassignment of any such
Receivable to the Transferor and the payment of any related Transfer Deposit
Amount will be the sole remedy respecting any breach of the representations and
warranties described in the preceding paragraph with respect to such Receivable
available to Certificateholders or the Trustee on behalf of Certificateholders.
The Transferor will make in the Pooling and Servicing Agreement and related
Series Supplement representations and warranties to the Trust to the effect,
among other things, that as of the Closing Date of such Series (a) the
Transferor is duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
execute, deliver and perform its obligations under the Pooling and Servicing
Agreement, the Series 1995-1 Supplement, and the Purchase Agreement, (b) the
Transferor is duly qualified to do business and in good standing (or is exempt
from such requirement) in any state required in order to conduct its business
and has obtained all necessary licenses and approvals required under federal
and Delaware law, (c) the execution and delivery of the Pooling and Servicing
Agreement, the Series 1995-1 Supplement, and the Purchase Agreement, and the
consummation of the transactions provided for therein, have been duly
authorized by the Transferor by all necessary corporate action on its part, (d)
the Pooling and Servicing Agreement will constitute a legal, valid and binding
obligation of the Transferor and (e) the transfer of Receivables and the
Collateral Security by it to the Trust under the Pooling and Servicing
Agreement will constitute either a valid transfer and assignment to the Trust
of all right, title and interest of the Transferor in and to the Receivables
and the Collateral Security (other than Receivables in Additional Accounts),
whether then existing or thereafter created and the proceeds thereof (including
amounts in any of the accounts established for the benefit of
Certificateholders) or the grant of a first priority perfected security
interest in such Receivables (except for certain liens permitted pursuant to
the Pooling and Servicing Agreement) and the proceeds thereof (including
amounts in any of the accounts established for the benefit of
Certificateholders), which is effective as to each such Receivable upon the
creation thereof. In the event of a breach of any of the representations and
warranties described in this paragraph, either the Trustee or the Holders of
Certificates evidencing undivided interests in the Trust aggregating more than
50% of the aggregate Investor Interest of all Series outstanding may direct the
Transferor to accept reassignment of an amount of Principal Receivables equal
to the invested amount to be reassigned (as described below) within 60 days of
such notice, or within such longer period specified in such notice. The
Transferor will thereupon be obligated to accept reassignment of such
Receivables on a Distribution Date occurring within such applicable period.
Such reassignment will not be required to be made, however, if at any time
during such applicable period, or such longer period, the representations and
warranties shall then be true and correct in all material respects. The amount
to be deposited by the Transferor for distribution to certificateholders in
connection with such reassignment will be equal to the invested amount for all
Series of certificates required to be reassigned on the last day of the Monthly
Period preceding the Distribution Date on which the reassignment is scheduled
to be made, less the amount, if any, previously allocated for payment of
principal to such certificateholders on such Distribution Date, plus an amount
equal to all interest accrued but unpaid on such certificates at the applicable
certificate rate through the last day of the related Interest Accrual Period,
less the amount transferred to the Distribution Account
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from the Interest Funding Account in respect of interest on such certificates
for the month ending on such last day of the Monthly Period. The payment of the
reassignment deposit amount and the transfer of all other amounts deposited for
the preceding month in the Distribution Account will be considered a payment in
full of the investor interest for all Series of certificates required to be
repurchased and will be distributed upon presentation and surrender of the
certificates for each such Series. If the Trustee or certificateholders give a
notice as provided above, the obligation of the Transferor to make any such
deposit will constitute the sole remedy available to the Trustee and the
certificateholders with respect to any breach of the Transferor's
representations and warranties.
An "Eligible Account" will be defined to mean, as of the relevant Cut-off
Date (or, with respect to Additional Accounts, as of their date of designation
for inclusion in the Trust), an arrangement to provide a revolving extension of
credit by Green Tree to a Dealer (i) in order to finance the purchase by a
Dealer of consumer and commercial product inventory or (ii) as a line of credit
secured by unencumbered assets of such Dealer, which extension of credit, as of
the date of determination thereof, (a) is in existence and maintained with
Green Tree, (b) is payable in United States dollars, (c) is with a Dealer whose
most recent billing address is in the United States or its territories or
possessions, (d) has been originated by Green Tree in the ordinary course of
business, (e) in respect of which no amounts have been charged off by Green
Tree as uncollectible in its customary and usual manner as of the Cut-off Date
(or, with respect to Additional Accounts, as of their date of designation for
inclusion in the Trust), and (f) is with a Dealer that is not involved in
insolvency proceedings. The definition of Eligible Account may be changed by
amendment to the Pooling and Servicing Agreement without the consent of the
Certificateholders if (i) the Transferor delivers to the Trustee a certificate
of an authorized officer to the effect that, in the reasonable belief of the
Transferor, such amendment will not as of the date of such amendment adversely
affect in any material respect the interest of the Certificateholders, and (ii)
such amendment will not result in a withdrawal or reduction of the rating of
any outstanding Series under the Trust.
An "Eligible Receivable" will be defined to mean each Receivable (a) that was
originated by Green Tree in the ordinary course of business, (b) that has
arisen under an Eligible Account, (c) that was created in compliance with all
requirements of law applicable thereto and pursuant to a floorplan or asset
based financing agreement that complies with all requirements of law applicable
thereto, (d) with respect to which all consents, licenses or authorizations of,
or registrations with, any governmental authority required to be obtained or
given by Green Tree or the Transferor in connection with the creation of such
Receivable or the transfer thereof to the Trust or the execution, delivery,
creation and performance by Green Tree of the related floorplan or asset based
financing agreement have been duly obtained or given and are in full force and
effect as of the date of the creation of such Receivable, (e) as to which, at
the time of its creation the Transferor had and at all times following the
transfer of such Receivables to the Trust the Trust will have, good and
marketable title free and clear of all liens and security interests (other than
certain liens permitted pursuant to the Pooling and Servicing Agreement), (f)
that is the legal, valid, binding and assignable payment obligation of the
related Dealer, legally enforceable against such Dealer, in accordance with its
terms (with certain bankruptcy related exceptions), (g) that constitutes
"chattel paper", an "account" or a "general intangible" under Article 9 of the
Uniform Commercial Code as then in effect in the State of Minnesota, (h) if
such Receivable has the benefit of a Floorplan Agreement with a Manufacturer,
such Floorplan Agreement provides, subject to the specific terms thereof and
any limitations therein (which may vary among Floorplan Agreements), that the
Manufacturer is obligated to repurchase the products securing the Receivables
upon the Servicer's repossession thereof upon the related Dealer's default, (i)
which has been the subject of a valid transfer and assignment from the
Transferor to the Trust of all the Transferor's interest therein (including any
proceeds thereof), (j) which at the time of transfer to the Trust is not
subject to any right of rescission, setoff, or any other defense (including
defenses arising out of violations of usury laws) of the Dealer, (k) as to
which, at the time of transfer of such Receivable to the Trust, Green Tree and
the Transferor have satisfied all their respective obligations with respect to
such Receivable required to be satisfied at such time, (l) as to which, at the
time of transfer of such Receivable to the Trust, neither Green Tree nor the
Transferor has
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taken or failed to take any action which would impair the rights of the Trust
or the certificateholders therein and (m) which represents the obligation of a
Dealer to repay an advance made to or on behalf of such Dealer to finance
products or the accounts receivable arising from the sale of such products.
It will not be required or anticipated that the Trustee will make any initial
or periodic general examination of the Receivables or any records relating to
the Receivables for the purpose of establishing the presence or absence of
defects, compliance with the Transferor's representations and warranties or for
any other purpose. The Servicer, however, will deliver to the Trustee on or
before March 31 of each year an opinion of counsel with respect to the validity
of the security interest of the Trust in and to the Receivables and certain
other components of the Trust Portfolio.
ADDITION OF ACCOUNTS
Subject to the conditions described below, the Transferor will have the right
to designate, from time to time, Additional Accounts to be included as Accounts
with respect to the Trust. In addition, the Transferor will be required to
designate Additional Accounts if the Transferor Interest on the last day of any
Collection Period is less than the Minimum Transferor Interest. The Transferor
will convey to the Trust its interest in all Receivables in such Additional
Accounts, whether such Receivables are then existing or thereafter created.
Each Additional Account must be an Eligible Account at the time of its
designation. However, Additional Accounts may not be of the same credit quality
as the initial Accounts, and may have been originated by Green Tree using
credit criteria different from those which were applied by Green Tree to the
initial Accounts.
A conveyance by the Transferor to the Trust of Receivables in Additional
Accounts is subject to the following conditions, among others: (i) each such
Additional Account must be an Eligible Account; (ii) the Transferor shall
represent and warrant that the addition of such Additional Accounts shall not,
in the reasonable belief of the Transferor, cause a Pay Out Event to occur;
(iii) the Transferor shall not select such Additional Accounts in a manner that
it believes is adverse to the interests of the certificateholders or any
Enhancement Provider; (iv) the Transferor shall deliver a Tax Opinion, other
than in the case of a required addition, and certain other opinions of counsel
with respect to the addition of such Additional Accounts to the Trustee, each
Rating Agency and any credit enhancement Provider and (v) if the Automatic
Addition Condition is not satisfied, the applicable Rating Agencies shall have
provided written confirmation that such addition will not result in a reduction
or withdrawal of the rating of the Certificates or any other rated outstanding
Series or class of certificates. If the Automatic Addition Condition is
satisfied and the Account being added will contain Receivables which represent
a type of product not previously financed by Green Tree, then such addition is
subject to each Rating Agency not giving notice to the Transferor within five
Business Days after the Determination Date after the end of the month of such
addition that the addition of such Account or Accounts would result in the
reduction or the withdrawal of the rating of the Certificates.
The "Automatic Addition Condition" means, with respect to the addition of
Accounts that (i) during the calendar quarter in which such addition occurs,
the number of new Accounts for Dealers that are financing products of the type
already being financed by Green Tree does not exceed 5% of the number of all
Accounts at the end of the preceding calendar quarter, (ii) during the twelve
months ending at the beginning of such calendar quarter, the number of such new
Accounts does not exceed 20% of the number of all Accounts at the beginning of
such twelve month period, (iii) the average for the three months preceding the
month of such addition of the aggregate balance of Receivables that have been
delinquent for more than 30 days does not exceed 1.25% of the Pool Balance at
the end of the month preceding the month of such addition, and (iv) the
annualized average for such three month period of the net losses incurred in
respect of the Receivables does not exceed 1.75% of the Pool Balance at the end
of the month preceding the month of such addition.
In addition to the periodic reports otherwise required to be filed by the
Servicer with the Commission pursuant to the Exchange Act, the Servicer intends
to file, on behalf of the Trust, a Report on Form 8-K
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with respect to any addition to the Trust of Receivables in Additional Accounts
that would have a material effect on the composition of the assets of the
Trust.
REMOVAL OF ACCOUNTS
The Transferor shall have the right at any time to require the removal from
the Trust of Eligible Accounts, including all amounts then held by the Trust or
thereafter received by the Trust in respect of the Eligible Accounts to be
removed. To remove any Eligible Account and such amounts, the Transferor (or
the Servicer on its behalf) shall, among other things, (a) on or before the
fifth business day prior to the date of removal (the "Removal Date"), furnish
to the Trustee, any Enhancement Provider and each Rating Agency a written
notice (the "Removal Notice") specifying the Removal Date; (b) on or before the
fifth business day after the Removal Date, the Transferor shall have furnished
to the Trustee a computer file, microfiche list or other list of the Accounts
(the "Removed Accounts") that were removed on the Removal Date, specifying for
each Removed Account as of the date of the Removal Notice its number, the
aggregate amount outstanding in such Removed Account and the aggregate amount
of Receivables therein; (c) represent and warrant that the removal of any such
Eligible Account on the Removal Date will not, in the reasonable belief of the
Transferor, cause a Pay Out Event to occur or cause the Transferor Interest to
be less than the Minimum Transferor Interest amount as of such date; (d)
represent and warrant that no selection procedures believed by the Transferor
to be adverse to the interest of the certificateholders were utilized in
selecting the Removed Accounts; (e) obtain a statement from each Rating Agency
that such removal will not result in a reduction or withdrawal of the rating of
the Offered Certificates or any other outstanding Series or class of
certificates; and (f) on or before the related Removal Date, deliver to the
Trustee and any Enhancement Provider an Officer's certificate confirming the
items set forth in clauses (c), (d) and (e) above and a Tax Opinion with
respect to such removal.
All Receivables existing in the Removed Accounts will be reassigned to the
Transferor as of the Removal Date. On any date on which an Account becomes an
Ineligible Account (which date will be deemed the Removal Date for such
Account), the Transferor will commence the removal of such Account from the
Trust. However, all Receivables existing in any such Account (other than an
Account that was an Ineligible Account at the time it was originally designated
as an Account) as of the Removal Date will continue to be a Trust asset.
Accounts that are terminated by their Dealers after they have paid the
related Receivables in full will be deemed to be removed from the Trust without
having to follow the procedures described above.
TRUST ACCOUNTS
The Trustee will establish and maintain with a Qualified Institution in the
name of the Trust, for the benefit of the Certificateholders, two separate
accounts, each in a segregated trust account (which need not be a deposit
account), consisting of an "Interest Funding Account" and a "Principal
Account." The Trustee will also establish a "Distribution Account" for the
benefit of the certificateholders of each Series which will be a non-interest
bearing segregated demand deposit account established with a Qualified
Institution. The Servicer will establish and maintain, in the name of the
Trust, for the benefit of certificateholders of all Series, a "Collection
Account," which will be a segregated account established by and maintained by
the Servicer with a Qualified Institution. A "Qualified Institution" is a
depository institution or trust company, which may include the Trustee,
organized under the laws of the United States or any one of the states thereof,
which at all times has a certificate of deposit rating of P-1 by Moody's and of
A-1+ by Standard & Poor's or long-term unsecured debt obligation (other than
such obligation the rating of which is based on collateral or on the credit of
a person other than such institution or trust company) rating of by Moody's
and of by Standard & Poor's and deposit insurance provided by the FDIC, or
a depository institution, which may include the Trustee, which is acceptable to
the Rating Agencies; provided, however, that no such rating shall be required
of an institution which shall have corporate trust powers and which maintains
the Collection
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Account, any principal account, any interest funding account or any other
account maintained for the benefit of Certificateholders as a fully segregated
trust account with the trust department of such institution which is rated at
least Baa3 by Moody's. Funds in the Principal Account and the Interest Funding
Account will be invested, at the direction of the Transferor, in (i)
obligations fully guaranteed by the United States of America, (ii) time
deposits, promissory notes, or certificates of deposit of depository
institutions or trust companies, the certificates of deposit of which are rated
P-1 by Moody's and A-1+ by Standard & Poor's, (iii) commercial paper having, at
the time of the Trust' investment, a rating of P-1 by Moody's and of A-1+ by
Standard & Poor's, (iv) bankers' acceptances issued by any depository
institution or trust company described in clause (ii) above, (v) money market
funds which have the highest rating from, or have otherwise been approved in
writing by, Moody's and Standard & Poor's, (vi) certain open end diversified
investment companies, (vii) Eurodollar time deposits that have been rated P-1
by Moody's and A-1+ by Standard & Poor's, and (viii) any other investment that
each Rating Agency confirms in waiting will not adversely affect its then
current rating of any outstanding Certificates (such investments, "Cash
Equivalents"). Any earnings (net of losses and investment expenses) on funds in
the Interest Funding Account and the Principal Account will be paid to the
Transferor. The Servicer has the revocable power to withdraw funds from the
Collection Account, and to instruct the Trustee to make withdrawals and
payments from the Interest Funding Account and the Principal Account, for the
purpose of carrying out the Servicer' duties under the Pooling and Servicing
Agreement. The agent making payments to the Certificateholders (the "Paying
Agent") has the revocable power to withdraw funds from the Distribution Account
for the purpose of making distributions to Certificateholders. The Paying Agent
initially will be .
On the Closing Date the Transferor will make an initial deposit to the
Interest Funding Account in an amount equal to the sum of the Class A Monthly
Interest, the Class B Monthly Interest and the Class C Monthly Interest for the
initial Interest Accrual Period.
EXCESS FUNDING ACCOUNT
The Trustee will establish and maintain in the name of the Trust, for the
benefit of the certificateholders of all Series, an "Excess Funding Account"
which will be a segregated account established by and maintained by the
Servicer with a Qualified Institution. At any time during which the Transferor
Interest does not exceed the Minimum Transferor Interest, funds (to the extent
available therefor as described herein) otherwise payable to the Transferor
will be deposited in the Excess Funding Account on any business day until the
Transferor Interest is at least equal to the Minimum Transferor Interest. Funds
on deposit in the Excess Funding Account will be withdrawn and paid to the
Transferor to the extent that on any day the Transferor Interest exceeds the
Minimum Transferor Interest as a result of the addition of new Receivables to
the Trust. Such deposits in and withdrawals from the Excess Funding Account may
be made on a daily basis. No funds will be deposited in the Excess Funding
Account, however, if any Series is in an amortization or accumulation period
(including any early amortization period), unless the principal account for
such Series has been fully funded for such Monthly Period.
Any funds on deposit in the Excess Funding Account at the beginning of the
Controlled Accumulation Period will be deposited in the Principal Account as
part of Class A Principal, Class B Principal, or Class C Principal, as
applicable, for any Distribution Date. In the event that more than one Series
begins its amortization or accumulation period at the same time, amounts on
deposit in the Excess Funding Account will be paid out to each such Series pro
rata based on the aggregate invested amount of each such Series. A Pay Out
Event will occur if the amount on deposit in the Excess Funding Account as a
percentage of the sum of the aggregate amount of Principal Receivables plus the
amount on deposit in the Excess Funding Account shall equal or exceed 50% on
the last day of six consecutive Monthly Periods.
Funds on deposit in the Excess Funding Account will be invested by the
Trustee at the direction of the Transferor in Cash Equivalents. On each
Distribution Date, all net investment income earned on amounts in the Excess
Funding Account since the preceding Distribution Date will be withdrawn from
the Excess
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Funding Account and treated as Interest Collections. Amounts, if any, in the
Excess Funding Account may be expected to earn interest at a rate that is less
than the Base Rate. The difference between the amount of interest actually
earned on investments in the Excess Funding Account on any day and the amount
of interest that would have been earned on such investments at the Base Rate is
the "Negative Carry Amount" for such day. See "--Coverage of Certain Interest
Shortfalls" below.
ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, during each Monthly Period,
the Servicer will allocate among the Class A Certificateholders' Interest, the
Class B Certificateholders' Interest, the Class C Certificateholders' Interest,
the Class D Certificateholders' Interest, the Transferor Interest, and the
holders of the other Series issued and outstanding from time to time pursuant
to the Pooling and Servicing Agreement and applicable Supplements all Interest
Collections and all Principal Collections and the amount of all Defaulted
Receivables. Interest Collections and the amount of Defaulted Receivables will
be allocated at all times, and Principal Collections will be allocated during
the Revolving Period, to the Class A Certificateholders' Interest, the Class B
Certificateholders' Interest, the Class C Certificateholders' Interest and the
Class D Certificateholders' Interest, based on the percentage equivalent of a
fraction the numerator of which is the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount, or the Class D Invested Amount,
respectively, at the end of the preceding business day and the denominator of
which is the greater of (a) the total amount of Principal Receivables (plus
amounts, if any, on deposit in the Excess Funding Account) as of the end of the
preceding business day and (b) with respect to Principal Collections only, the
sum of the numerator for all classes of all Series then outstanding used to
calculate the applicable allocation percentage (the "Class A Floating
Allocation Percentage," the "Class B Floating Allocation Percentage," the
"Class C Floating Allocation Percentage," and the "Class D Floating Allocation
Percentage," respectively; the sum of all such percentages, the "Floating
Allocation Percentage"). During the Revolving Period, all Principal Collections
allocable to the Certificates will be allocated and paid to the Transferor
(except for collections applied as Reallocated Principal Collections and Shared
Principal Collections paid to the holders of certificates of other Series, if
any, and except for any funds deposited in the Excess Funding Account). On any
business day on or after the Controlled Accumulation Period Commencement Date,
Principal Collections will be allocated to the Certificateholders' Interest
based on the percentage equivalent of a fraction the numerator of which is the
Class A Invested Amount, the Class B Invested Amount, the Class C Invested
Amount or the Class D Invested Amount, respectively, at the end of the last day
of the Revolving Period and the denominator of which is the greater of (a) the
aggregate amount of Principal Receivables (plus amounts, if any, on deposit in
the Excess Funding Account) at the end of the preceding business day and (b)
the sum of the numerators used to calculate the allocation percentages with
respect to Principal Collections for all Series (the "Class A Fixed/Floating
Allocation Percentage," the "Class B Fixed/Floating Allocation Percentage," the
"Class C Fixed/Floating Allocation Percentage," and the "Class D Fixed/Floating
Allocation Percentage," respectively; the sum of all such percentages the
"Fixed/Floating Allocation Percentage"). On any business day when Principal
Collections are being allocated for payment to the Class A, Class B or Class C
Certificates, Principal Collections will be allocated to the Class A, Class B
or Class C Certificateholders' Interest based on the percentage equivalent of a
fraction the numerator of which is the sum of the Class A Invested Amount, the
Class B Invested Amount and the Class C Invested Amount at the end of the last
day of the Revolving Period and the denominator of which is the greater of (a)
the sum of the aggregate amount of Principal Receivables and the amount on
deposit in the Excess Funding Account at the end of the preceding business day
and (b) the sum of the numerators used to calculate the allocation percentages
with respect to Principal Receivables for all Series (the "ABC Fixed/Floating
Allocation Percentage").
"Class A Invested Amount" means an amount equal to (a) the initial principal
balance of the Class A Certificates minus (b) the aggregate amount of principal
payments made to Class A Certificateholders prior to such date, and minus (c)
the aggregate amount of Class A Investor Charge-Offs for all prior Distribution
Dates, equal to the amount by which the Class A Invested Amount has been
reduced to fund the Investor
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Default Amount on all prior Distribution Dates as described under "--Investor
Charge-Offs," and plus (d) the aggregate amount of Available Series Interest
Collections, Excess Interest Collections and Reallocated Principal Collections
applied on all prior Distribution Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (c).
"Class B Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class B Certificates minus (b) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all
prior Distribution Dates, equal to the amount by which the Class B Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates as described under "--Investor Charge-Offs," minus (d) the
aggregate amount of Reallocated Class B Principal Collections for which neither
the Class D Invested Amount nor the Class C Invested Amount has been reduced
for all prior Distribution Dates, and plus (e) the aggregate amount of
Available Series Interest Collections, Excess Interest Collections and
Reallocated Class C Principal Collections and Reallocated Class D Principal
Collections applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c) and (d).
"Class C Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class C Certificates less the Class C
Percentage of the initial deposit to the Account minus (b) the aggregate amount
of principal payments made to Class C Certificateholders prior to such date,
minus (c) the aggregate amount of Class C Investor Charge-Offs for all prior
Distribution Dates, equal to the amount by which the Class C Invested Amount
has been reduced to fund the Investor Default Amount on all prior Distribution
Dates as described under "--Investor Charge-Offs," minus (d) the aggregate
amount of Reallocated Class C Principal Collections for which the Class D
Invested Amount has not been reduced for all prior Distribution Dates, and plus
(e) the aggregate amount of Available Series Interest Collections, Excess
Interest Collections, Reallocated Class D Principal Collections and certain
other amounts as may be available applied on all prior Distribution Dates for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c) and (d).
"Class D Invested Amount" means an amount equal to (a) the initial principal
balance of the Class D Certificates, minus (b) the aggregate amount of
principal payments made to Class D Certificateholders prior to such date, minus
(c) the aggregate amount of Class D Investor Charge-Offs for all prior
Distribution Dates, equal to the amount by which the Class D Invested Amount
has been reduced to fund the Investor Default Amount on all prior Distribution
Dates as described under "--Investor Charge-Offs," minus (d) the aggregate
amount of Reallocated Principal Collections for all prior Distribution Dates,
plus (e) the aggregate amount of Interest Collections and Excess Interest
Collections applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clause (c) and plus (f)
the Class D Incremental Invested Amount (described below under "--The
Overconcentration Amounts") for the related Monthly Period.
"Invested Amount" means the sum of the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount and the Class D Invested Amount.
"Transferor's Percentage" means (a) when used with respect to Principal
Collections during the Revolving Period and Interest Collections and the amount
of Defaulted Receivables at all times, 100% minus the sum of the Floating
Allocation Percentage and the floating allocation percentages for all other
Series and (b) when used with respect to Principal Collections during the
Controlled Accumulation Period, 100% minus the sum of the Fixed/Floating
Allocation Percentage and the allocation percentages used with respect to
Principal Collections for all other Series.
As a result of the Floating Allocation Percentage, Interest Collections and
the portion of Defaulted Receivables allocated to the Certificateholders will
change each business day based on the relationship of the Class A Invested
Amount, the Class B Invested Amount, the Class C Invested Amount, and Class D
Invested
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Amount to the total amount of Principal Receivables and amounts on deposit in
the Excess Funding Account on the preceding business day.
THE OVERCONCENTRATION AMOUNTS
The Class D Invested Amount will be adjusted to reflect, on each Distribution
Date, the aggregate principal amount of Receivables in the Trust on such
Distribution Date which are Asset Based Receivable Overconcentrations, Dealer
Overconcentrations, Manufacturer Overconcentrations and Product Line
Overconcentrations (the "Overconcentration Amount") allocable to the
Certificateholders' Interest.
"Asset-Based Receivable Overconcentration" on any Distribution Date means
the excess of (a) the aggregate of all amounts of Principal Receivables in
Accounts for Asset Based Receivables on the last day of the Monthly Period
immediately preceding such Distribution Date over (b) 20% of the total
amount of Principal Receivables (the "Pool Balance") on the last day of
such immediately preceding Monthly Period.
"Dealer Overconcentration" on any Distribution Date means, with respect
to any Account with a Dealer, the excess of (a) the aggregate amount of
Principal Receivables in such Account on the last day of the Monthly Period
immediately preceding such Distribution Date over (b) 2% of the Pool
Balance on the last day of such immediately preceding Monthly Period.
"Manufacturer Overconcentration" on any Distribution Date means the
excess of (a) the aggregate of all amounts of Principal Receivables in
Accounts created pursuant to Floorplan Agreements with a single
Manufacturer on the last day of the Monthly Period immediately preceding
such Distribution Date over (b) 15% of the Pool Balance on the last day of
such immediately preceding Monthly Period.
"Product Line Overconcentration" on any Distribution Date means, the
excess of (a) the aggregate of all amounts of Principal Receivables in the
Accounts that represent financing for a single product line (other than
Asset-Based Receivables and Receivables that represent financing for
manufactured housing) on the last day of the Monthly Period immediately
preceding such Distribution Date over (b) 5% for marine products, 5% for
recreational vehicles, and 5% for any other products in total, of the Pool
Balance on the last day of such immediately preceding Monthly Period. If
Receivables are transferred to the Trust in the future and such Receivables
are secured by products in a product line that is new to the Trust, the
Rating Agencies may create a separate category of product line
Overconcentration with its own overconcentration limits, and such new
product line Overconcentration will become part of the Overconcentration.
The Class D Invested Amount will be adjusted to reflect the Class D
Incremental Invested Amount, as described under "Allocation Percentages" above.
The "Class D Incremental Invested Amount" for any Monthly Period will equal the
product of (a) a fraction, the numerator of which is the sum of the Invested
Amount (exclusive of the Class D Incremental Invested Amount) on the last day
of the immediately preceding Monthly Period and the denominator of which is the
total amount of Principal Receivable on such last day times (b) the
Overconcentration Amount for such Monthly Period.
Notwithstanding the above, in the case of each such Overconcentration, the
percentage in clause (b) for such Overconcentration may be increased by the
Transferor, without the consent of any Certificateholder, to a level acceptable
to each Rating Agency without any reduction or withdrawal of its rating of the
Class A, Class B or Class C Certificates (but which may involve an adjustment,
upward or downward, of the Class D Invested Amount).
REALLOCATION OF CASH FLOWS
On the first business day following the end of each Monthly Period, the
Servicer will determine the Required Amount, if any. Commencing on the first
business day in the following Monthly Period, the Servicer will apply all or a
portion of the Excess Interest Collections of other Series with respect to such
business day allocable to the Series 1995-1 Certificates in an amount equal to
the remaining Required Amount. Excess
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Interest Collections from other Series allocable to the Series 1995-1
Certificates for any business day will be equal to the product of (x) Excess
Interest Collections available from all other Series for such business day and
(y) a fraction, the numerator of which is the Required Amount for such business
day (as reduced by amounts applied pursuant to the preceding paragraph) and the
denominator of which is the aggregate amount of shortfalls in required amounts
or other amounts to be paid from available Interest Collections for all Series
for such business day.
REALLOCATED PRINCIPAL COLLECTIONS
On the first business day following the end of each Monthly Period, the
Servicer will apply or cause the Trustee to apply an amount, not to exceed the
Class D Invested Amount, equal to the product of (a)(i) during the Revolving
Period, the Class D Floating Allocation Percentage or (ii) during the
Controlled Accumulation Period, the Class D Fixed/Floating Allocation
Percentage and (b) the amount of Principal Collections with respect to such
business day to the following amounts in the following priority (such
collections applied in accordance with clause (a) below are called "Reallocated
Class D Principal Collections"):
(a) an amount equal to the sum of (i) the remaining Class A Required
Amount, if any, with respect to the prior Monthly Period, (ii) the
remaining Class B Required Amount, if any, with respect to the prior
Monthly Period and (iii) the remaining Class C Required Amount, if any,
with respect to the prior Monthly Period will be applied first to the
components of the Class A Required Amount, then to the components of the
Class B Required Amount and then to the components of the Class C Required
Amount in the same priority as such components are applied from Available
Series Interest Collections as described in "--Application of Collections--
Payment of Fees, Interest and Other Items"; and
(b) any such collections not applied in the foregoing manner (and
therefore not constituting Reallocated Class D Principal Collections) (i)
on business days with respect to the Revolving Period and the Controlled
Accumulation Period prior to the payment in full of the Class C Invested
Amount will be paid to the Transferor in order to maintain the Class D
Invested Amount and (ii) on business days during the Controlled
Accumulation Period following payment in full of the Class C Invested
Amount will be included in the funds available to make principal payments
to the Class D Certificateholders until the Class D Invested Amount is paid
in full.
On each business day, the Servicer will apply or cause the Trustee to apply
an amount, not to exceed the Class C Invested Amount, equal to the product of
(a)(i) during the Revolving Period, the Class C Floating Allocation Percentage
or (ii) during the Controlled Accumulation Period, the Class C Fixed/Floating
Allocation Percentage and (b) the amount of Principal Collections with respect
to such business day to the following amounts in the following priority (such
collections applied in accordance with clause (a) below are called "Reallocated
Class C Principal Collections"):
(a) an amount equal to the sum of (i) the remaining Class A Required
Amount, if any, with respect to the prior Monthly Period over the amount of
Reallocated Class D Principal Collections applied with respect thereto for
the such Monthly Period and (ii) the remaining Class B Required Amount, if
any, with respect to the prior Monthly Period over the amount of
Reallocated Class D Principal Collections applied with respect thereto for
such Monthly Period, will be applied first to the remaining components of
the Class A Required Amount and then to the remaining components of the
Class B Required Amount in the same priority as such components are applied
from Available Series Interest Collections as described in "--Application
of Collections--Payment of Fees, Interest and Other Items"; and
(b) any such collections not applied in the foregoing manner (and
therefore not constituting Reallocated Class C Principal Collections) will,
on business days with respect to the Revolving Period, be applied as Shared
Principal Collections and on business days with respect to the Controlled
Accumulation Period will be included in the funds available to make
principal payments to the Class A Certificateholders until the Class A
Invested Amount is paid in full and then to the Class B Certificateholders
until the Class B Invested Amount is paid in full and then to the Class C
Certificateholders until the Class C Invested Amount is paid in full.
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On each business day, the Servicer will apply or cause the Trustee to apply
an amount, not to exceed the Class B Invested Amount, equal to the product of
(a)(i) during the Revolving Period, the Class B Floating Allocation Percentage
or (ii) during the Controlled Accumulation Period, the Class B Fixed/Floating
Allocation Percentage and (b) the amount of Principal Collections with respect
to such business day to the following amounts in the following priority (such
collections applied in accordance with clause (a) below are called "Reallocated
Class B Principal Collections" and the sum of Reallocated Class D Principal
Collections, Reallocated Class C Principal Collections and Reallocated Class B
Collections is called "Reallocated Principal Collections"):
(a) an amount equal to the excess, if any, of the remaining Class A
Required Amount, if any, with respect to the prior Monthly Period over the
sum of the amount of Reallocated Class D Principal Collections and
Reallocated Class C Principal Collections applied with respect thereto for
the prior Monthly Period will be applied to the remaining components of the
Class A Required Amount in the same priority as such components are applied
from Available Series Interest Collections as described in "--Application
of Collections--Payment of Fees, Interest and Other Items"; and
(b) any such collections not applied in the foregoing manner (and
therefore not constituting Reallocated Class B Principal Collections) will,
on business days with respect to the Revolving Period, be applied as Shared
Principal Collections and on business days with respect to the Controlled
Accumulation Period will be included in the funds available to make
principal payments to the Class A Certificateholders until the Class A
Invested Amount is paid in full and then to the Class B Certificateholders
until the Class B Invested Amount is paid in full.
On each Distribution Date, the Class D Invested Amount will be reduced by the
amount of Reallocated Principal Collections for the related Monthly Period. In
the event that such reduction would cause the Class D Invested Amount to be a
negative number, the Class D Invested Amount will be reduced to zero and the
Class C Invested Amount will be reduced by the amount by which the Class D
Invested Amount would have been reduced below zero. In the event that the
amount of Reallocated Principal Collections for such Distribution Date would
cause the Class C Invested Amount to be a negative number, the Class C Invested
Amount will be reduced to zero and the Class B Invested Amount will be reduced
by the amount by which the Class C Invested Amount would have been reduced
below zero. In the event that the reallocation of Principal Collections would
cause the Class B Invested Amount to be a negative number on any Distribution
Date, the amount of Class B Reallocated Principal Collections on such
Distribution Date will be an amount not to exceed the amount which would cause
the Class B Invested Amount to be reduced to zero.
APPLICATION OF COLLECTIONS
Allocations. Payments on the Receivables will be made to the Servicer, who
will deposit all such payments in the Collection Account no later than the
second business day following the date of processing. On the day on which any
deposit to the Collection Account is available, the Servicer will make the
deposits and payments to the accounts and parties as indicated below; provided,
however, that for as long as Green Tree or any affiliate of Green Tree remains
the Servicer under the Pooling and Servicing Agreement, then the Servicer may
make such deposits and payments on the business day immediately prior to the
Distribution Date (the "Transfer Date") in an aggregate amount equal to the net
amount of such deposits and payments which would have been made had the
conditions of this proviso not applied if (a)(i) the Servicer provides to the
Trustee a letter of credit or other form of credit enhancement rated in the
highest rating category by the Rating Agency covering the risk of collection of
the Servicer and (ii) the Transferor shall not have received a notice from the
Rating Agency that making payments monthly rather than daily would result in
the lowering of such Rating Agency's then-existing rating of any Series of
certificates then outstanding or (b) the Servicer has and maintains a short-
term credit rating of P-1 by Moody's and A-1 by Standard & Poor's.
If clause (a) or clause (b) set forth in the proviso to the immediately
preceding paragraph is satisfied, payments on the Receivables collected by the
Servicer will not be segregated from the assets of the Servicer. Until such
payments on the Receivables collected by the Servicer are deposited into the
Collection Account,
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such funds may be used by the Servicer for its own benefit, and the proceeds of
any short-term investment of such funds will accrue to the Servicer. During
such times as the Servicer holds funds representing payments on the Receivables
collected by the Servicer and is permitted to use such funds for its own
benefit, the Certificateholders are subject to risk of loss, including risk
resulting from the bankruptcy or insolvency of the Servicer. The Servicer will
pay no fee to the Trust or any Certificateholder for any use by the Servicer of
funds representing collections on the Receivables.
The Servicer will withdraw the following amounts from the Collection Account
for application on each business day as indicated:
(i) an amount equal to the Transferor Percentage plus, prior to the Class
D Principal Payment Commencement Date, the Class D Floating Allocation
Percentage or the Class D Fixed/Floating Allocation Percentage, as
applicable, of the aggregate amount of Principal Collections (less the
amount thereof which may be applied as Reallocated Class D Principal
Collections) and any amounts to be paid in respect of the Class D Investor
Default Amount will be paid to the Transferor to maintain the Class D
Invested Amount;
(ii) an amount equal to the Transferor Percentage of the aggregate amount
of Interest Collections will be paid to the holder of the Exchangeable
Transferor Certificate to the extent such funds are not applied to cover
Negative Carry Amounts or Principal Funding Investment Shortfalls, or
allocated to any Series as set forth in the applicable Supplement;
(iii) an amount equal to the sum of (i) the Floating Allocation
Percentage of the aggregate amount of Interest Collections, (ii) investment
earnings on amounts on deposit in the Trust Accounts and (iii) Excess
Interest Collections of other Series allocable to such Series, will be
allocated and paid as described below in "--Payment of Fees, Interest, and
Other Items;"
(iv) during the Revolving Period, an amount equal to the sum of the Class
A Floating Allocation Percentage, the Class B Floating Allocation
Percentage and the Class C Floating Allocation Percentage of Principal
Collections (less the amount thereof which may be applied as Reallocated
Class B Principal Collections and Reallocated Class C Principal
Collections) will be applied as Shared Principal Collections;
(v) during the Controlled Accumulation Period and prior to the Class B
Principal Commencement Date, an amount equal to the ABC Fixed/Floating
Allocation Percentage of Principal Collections (less the amount thereof
which may be applied as Reallocated Class B Principal Collections or
Reallocated Class C Principal Collections), any amount on deposit in the
Excess Funding Account, any amounts to be paid in respect of the ABC
Investor Default Amount, Class A Investor Charge-Offs, Class B Investor
Charge-Offs and Class C Investor Charge-Offs and any amount of Shared
Principal Collections allocated to the Certificates on such business day up
to (a) during the Controlled Accumulation Period, the Controlled Deposit
Amount or (b) during the Early Amortization Period, the Class A Invested
Amount, will be deposited in the Principal Account;
(vi) during the Controlled Accumulation Period and on or after the Class
B Principal Commencement Date, an amount equal to the ABC Fixed/Floating
Allocation Percentage of such Principal Collections (less the amount
thereof which may be applied as Reallocated Class B Principal Collections
or Reallocated Class C Principal Collections), any remaining amount on
deposit in the Excess Funding Account, any amounts to be paid in respect of
the ABC Investor Default Amount, Class B Investor Charge-Offs and Class C
Investor Charge-Offs and any amount of Shared Principal Collections
allocated to the Certificates on such business day, up to (a) during the
Controlled Accumulation Period, the Controlled Deposit Amount or (b) during
the Early Amortization Period, the Class B Invested Amount, will be
deposited in the Principal Account;
(vii) during the Controlled Accumulation Period and on or after the Class
C Principal Commencement Date, an amount equal to the ABC Fixed/Floating
Allocation Percentage of such Principal Collections (less the amount
thereof which may be applied as Reallocated Class C Principal Collections),
any remaining amount on deposit in the Excess Funding Account, any amounts
to be paid
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in respect of the ABC Investor Default Amount, and Class C Investor Charge-
Offs and any amount of Shared Principal Collections allocated to the
Certificates on such business day, up to the Class C Invested Amount, will
be deposited into the Principal Account;
(viii) Shared Principal Collections will be allocated to each outstanding
Series pro rata based on any Principal Shortfalls with respect to any
Series which is in its amortization period. The Servicer will pay any
remaining Shared Principal Collections on such business day to the holder
of the Exchangeable Transferor Certificate; and
(ix) Excess Interest Collections will be allocated as set forth below in
paragraph (xiv) to "--Payment of Fees, Interest, and Other Items."
Any Shared Principal Collections and other amounts described above as being
payable to the Transferor will not be paid to the Transferor if the Transferor
Interest on any date, after giving effect to the inclusion in the Trust of all
Receivables on or prior to such date and the application of all prior payments
to the Transferor, does not exceed the Minimum Transferor Interest. Any such
amounts otherwise payable to the Transferor will be deposited into and held in
the Excess Funding Account, and on the Amortization Period Commencement Date
with respect to any Series, such amounts will be deposited in the principal
account of such Series to the extent specified in the related Supplement until
the applicable principal account of such Series has been funded in full or the
holders of certificates of such Series have been paid in full. See "--Excess
Funding Account."
Payment of Fees, Interest and Other Items. On each business day during a
Monthly Period, the Servicer will determine the sum of (i) the Floating
Allocation Percentage of Interest Collections and (ii) investment earnings on
amounts on deposit in the Trust Accounts (the "Available Series Interest
Collections") and will distribute from the Collection Account the following
amounts in the following priority (in each case, subject to the limit of the
Available Series Interest Collections less all amounts distributed pursuant to
a higher priority):
(i) an amount equal to the excess of
(A) the sum of (1) the Class A Monthly Interest, (2) the amount of
any Class A Monthly Interest previously due but not deposited in the
Interest Funding Account in prior Monthly Periods, and (3) any
additional interest (to the extent permitted by applicable law) at
the Class A Certificate Rate with respect to interest amounts that
were due but not paid in a prior Monthly Period over
(B) the amount which has already been deposited in the Interest
Funding Account with respect thereto in the current Monthly Period,
will be deposited in the Interest Funding Account for distribution on the
next succeeding Distribution Date to the Class A Certificateholders;
(ii) an amount equal to the excess of
(A) the sum of (1) the Class B Monthly Interest, (2) the amount of
any Class B Monthly Interest previously due but not deposited in the
Interest Funding Account in prior Monthly Periods, and (3) any
additional interest (to the extent permitted by applicable law) at
the Class B Certificate Rate with respect to Class B Monthly
Interest amounts that were due but not paid in a prior Monthly
Period over
(B) the amount which has already been deposited in the Interest
Funding Account with respect thereto in the current Monthly Period,
will be deposited in the Interest Funding Account for distribution on the
next succeeding Distribution Date to the Class B Certificateholders;
(iii) an amount equal to the excess of
(A) the sum of (1) the Class C Monthly Interest, (2) the amount of
any Class C Monthly Interest previously due but not deposited in the
Interest Funding Account in prior Monthly Periods, and (3) any
additional interest (to the extent permitted by applicable law) at
the Class
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C Certificate Rate with respect to Class C Monthly Interest amounts
that were due but not paid in a prior Monthly Period over
(B) the amount which has already been deposited in the Interest
Funding Account with respect thereto in the current Monthly Period,
will be deposited in the Interest Funding Account for distribution on the
next succeeding Distribution Date to the Class C Certificateholders;
(iv) if Green Tree or an affiliate of Green Tree is not the Servicer, an
amount equal to the portion of the Monthly Servicing Fee for the current
month that has not been previously paid to the Servicer plus any prior
Monthly Servicing Fee that was due but not previously paid to the Servicer,
will be distributed to the Servicer;
(v) an amount equal to the sum of (1) the aggregate ABC Investor Default
Amount for such business day and (2) the unpaid ABC Investor Default Amount
for any prior business day during the then-current Monthly Period, will (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period on and prior to the Class B
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class A Certificateholders, (y) on and after the Class B
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class B Certificateholders and (z) on and after the Class C
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class C Certificateholders;
(vi) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) the sum of (1) the aggregate Class D Investor
Default Amount for such business day and (2) the unpaid Class D Investor
Default Amount for any prior business day during the then-current Monthly
Period, will (x) during the Revolving Period and the Controlled
Accumulation Period prior to the payment in full of the Class C Invested
Amount, be paid to the Transferor in order to maintain the Class D Invested
Amount and (y) during the Controlled Accumulation Period following the
payment in full of the Class C Invested Amount, be deposited in the
Principal Account for payment to the Class D Certificateholders;
(vii) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) unreimbursed Class A Investor Charge-Offs, if
any, will be applied to reimburse Class A Investor Charge-Offs and (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period but on and prior to the Class
B Principal Commencement Date, be deposited in the Principal Account for
payment to the Class A Certificateholders, (y) on and after the Class B
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class B Certificateholders and (z) on and after the Class C
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class C Certificateholders;
(viii) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) the sum of (1) the amount of interest which
has accrued with respect to the outstanding aggregate principal amount of
the Class B Certificates at the Class B Certificate Rate but has not been
deposited in the Interest Funding Account will be paid to the Class B
Certificateholders either on such business day or on a prior business day,
and (2) any additional interest (to the extent permitted by applicable law)
at the Class B Certificate Rate with respect to such interest amounts that
were due but not paid to Class B Certificateholders in any previous Monthly
Period, will be deposited in the Interest Funding Account for distribution
on the next succeeding Distribution Date to the Class B Certificateholders;
(ix) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) the sum of (1) the amount of interest which
has accrued with respect to the outstanding aggregate principal amount of
the Class C Certificates at the Class C Certificate Rate but has not been
deposited in the Interest Funding Account paid to the Class C
Certificateholders either on such business day or on a prior business day
and (2) any additional interest (to the extent permitted by applicable law)
at the Class C Certificate Rate with respect to such interest amounts that
were due but not paid to Class C
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Certificateholders in any previous Monthly Period, will be deposited in the
Interest Funding Account for distribution on the next succeeding
Distribution Date to the Class C Certificateholders;
(x) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) unreimbursed Class B Investor Charge-Offs, if
any, will be applied to reimburse Class B Investor Charge-Offs and (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period but on and prior to the Class
B Principal Commencement Date, be deposited in the Principal Account for
payment to the Class A Certificateholders, (y) on and after the Class B
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class B Certificateholders and (z) on and after the Class C
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class C Certificateholders;
(xi) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) unreimbursed Class C Investor Charge-Offs, if
any, will be applied to reimburse Class C Investor Charge-Offs and (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period but on and prior to the Class
B Principal Commencement Date, be deposited in the Principal Account for
payment to the Class A Certificateholders, (y) on and after the Class B
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class B Certificateholders and (z) on and after the Class C
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class C Certificateholders;
(xii) an amount equal to the lesser of (A) any Available Series Interest
Collections remaining and (B) unreimbursed Class D Investor Charge-Offs, if
any, will (x) during the Revolving Period and during the Controlled
Accumulation Period prior to the payment in full of the Class C Invested
Amount, be paid to the Transferor and (y) during the Accumulation Period
following payment in full of the Class C Invested Amount, be deposited in
the Principal Account for payment to the Class D Certificateholders;
(xiii) if Green Tree or an affiliate of Green Tree is the Servicer, an
amount equal to the lesser of (A) any Available Series Interest Collections
remaining and (B) the portion of the Monthly Servicing Fee for the current
month that has not been previously paid to the Servicer plus any prior
Monthly Servicing Fee that was due but not previously paid to the Servicer
will be distributed to the Servicer; and
(xiv) any Available Series Interest Collections remaining after making
the above described distributions will be treated as Excess Interest
Collections which will be available to fund any applicable reserves with
respect to the Class C Certificates, to cover shortfalls, if any, in
amounts payable from Interest Collections to certificateholders of other
Series and then to pay any unpaid commercially reasonable costs and
expenses of a successor Servicer, if any. Excess Interest Collections which
are not so used will be paid to the Transferor.
"Class A Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class A Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the outstanding principal balance of the Class A
Certificates on the related Record Date or, with respect to the first
Distribution Date, the initial outstanding principal balance of the Class A
Certificates.
"Class B Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class B Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the Class B Invested Amount on the related Record Date
or, with respect to the first Distribution Date, the initial outstanding
principal balance of the Class B Certificates.
"Class C Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class C Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the Class C Invested Amount on the related Record Date
or, with respect to the first Distribution Date, the initial outstanding
principal balance of the Class C Certificates.
"Required Amount" means on the first business day following a Monthly Period
the amount, if any, by which the full amount to be paid pursuant to clauses
(i)-(xiii) above in "--Payments of Fees, Interest, and
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Other Items" for such prior Monthly Period exceeds the portion of the Available
Series Interest Collections applied to the payment of the amounts described in
such clauses for such prior Monthly Period.
Payment of Principal. On each business day during the Revolving Period, the
Trustee, acting in accordance with instructions from the Servicer, will treat
the amount described in clause (iv) of "--Allocations" as Shared Principal
Collections which will be applied as described in clause (viii) of "--
Allocations." On the Class A Scheduled Payment Date, the Trustee, acting in
accordance with instructions from the Servicer, will withdraw the amount on
deposit in the Principal Account and deposit such amounts in the Distribution
Account for distribution to the Class A Certificateholders on the next
succeeding Distribution Date. If the amount so distributed on the Class A
Scheduled Payment Date is less than the Class A Invested Amount, the Class A
Certificateholders will be entitled on each subsequent Distribution Date to
receive principal payments to the extent of Class A Principal until the Class A
Invested Amount is paid in full. The Class B Certificateholders will be
entitled to receive payment of the Class B Invested Amount on the Class B
Scheduled Payment Date, but only after the Class A Invested Amount has been
paid in full. The Class C Certificateholders will be entitled to receive
principal payments to the extent of Class C Principal until the Class C
Invested Amount is paid in full only after the Class A Invested Amount and the
Class B Invested Amount have been paid in full. The Class D Certificateholders
will be entitled to receive principal payments only after the Class A Invested
Amount, the Class B Invested Amount, and the Class C Invested Amount have been
paid in full.
"Class A Principal" with respect to any Distribution Date during the
Controlled Accumulation Period will equal the sum of (i) an amount equal to the
ABC Fixed/Floating Allocation Percentage of all Principal Collections (less the
amount of Reallocated Class B Principal Collections and Reallocated Class C
Principal Collections) received during the Monthly Period immediately preceding
such Distribution Date, (ii) any amount on deposit in the Excess Funding
Account allocated to the Class A Certificates with respect to the preceding
Monthly Period, (iii) the aggregate ABC Investor Default Amount paid from
Available Series Interest Collections, Excess Interest Collections or
Reallocated Principal Collections with respect to the preceding Monthly Period
and any reimbursements from Available Series Interest Collections, Excess
Interest Collections or Reallocated Principal Collections of unreimbursed Class
A Investor Charge-Offs, Class B Investor Charge-Offs, Class C Investor Charge-
Offs and Class D Investor Charge-Offs and (iv) Shared Principal Collections
allocated to the Class A Certificates; provided, however, that with respect to
any Distribution Date during the Controlled Accumulation Period, Class A
Principal will not exceed the lesser of (i) the Controlled Deposit Amount and
(ii) the Class A Invested Amount; provided, further that with respect to the
Series 1995-1 Termination Date, Class A Principal will be an amount equal to
the Class A Invested Amount.
"Class B Principal" with respect to any Distribution Date on or after the
Class A Scheduled Payment Date will equal the sum of (i) an amount equal to the
ABC Fixed/Floating Allocation Percentage of all Principal Collections (less the
amount of Reallocated Class B Principal Collections and Reallocated Class C
Principal Collections) received during the Monthly Period immediately preceding
such Distribution Date (or, in the case of the first Distribution Date
following the date on which an amount equal to the Class A Invested Amount is
deposited in the Principal Account to be applied to the payment of Class A
Principal, the ABC Fixed/Floating Allocation Percentage of Principal
Collections from the date on which such deposit is made), (ii) any amount on
deposit in the Excess Funding Account allocated to the Class B Certificates
with respect to the preceding Monthly Period, and (iii) the aggregate ABC
Investor Default Amount paid from Available Series Interest Collections, Excess
Interest Collections or Reallocated Principal Collections with respect to the
preceding Monthly Period and any reimbursements from Available Series Interest
Collections, Excess Interest Collections or Reallocated Principal Collections
of unreimbursed Class B Investor Charge-Offs, Class C Investor Charge-Offs and
Class D Investor Charge-Offs and (iv) Shared Principal Collections allocated to
the Class B Certificates; provided, however, that with respect to any
Distribution Date during the Controlled Accumulation Period, Class B Principal
will not exceed the lesser of (i) the Controlled Deposit Amount and (ii) the
Class B Invested Amount; provided, further, that with respect to the Series
1995-1 Termination Date, Class B Principal will be an amount equal to the Class
B Invested Amount.
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"Class C Principal" with respect to any Distribution Date on or after the
Class C Principal Commencement Date will equal the sum of (i) an amount equal
to the ABC Fixed/Floating Allocation Percentage of all Principal Collections
(less the amount of Reallocated Class C Principal Collections) received during
the Monthly Period immediately preceding such Distribution Date (or, in the
case of the first Distribution Date following the date on which an amount equal
to the Class B Invested Amount is deposited in the Principal Account to be
applied to the payment of Class B Principal, the ABC Fixed/Floating Allocation
Percentage of Principal Collections from the date on which such deposit is
made), (ii) any amount on deposit in the Excess Funding Account allocated to
the Class C Certificates with respect to the preceding Monthly Period, (iii)
the aggregate ABC Investor Default Amount paid from Available Series Interest
Collections, Excess Interest Collections or Reallocated Principal Collections
with respect to the preceding Monthly Period and any reimbursements from
Available Series Interest Collections, Excess Interest Collections or
Reallocated Principal Collections of unreimbursed Class C Investor Charge-Offs
and Class D Investor Charge-Offs and (iv) Shared Principal Collections
allocated to the Class C Certificates; provided, that with respect to the
Termination Date, Class C Principal will be an amount equal to the Class C
Invested Amount.
On the Transfer Date preceding the Class D Principal Commencement Date, and
on each Transfer Date thereafter until the Trust is terminated or until the
Class D Invested Amount is paid in full, the Trustee, acting in accordance with
instructions from the Servicer, will withdraw amounts deposited into the
Principal Account in respect of Principal Collections processed during the
related Monthly Period and, to the extent of the Class D Invested Amount,
deposit such amounts in the Distribution Account for distribution to the Class
D Certificateholders on the next succeeding Distribution Date (the "Class D
Principal"). The Class D Certificateholders will be entitled to receive
principal payments to the extent of Class D Principal until the Class D
Invested Amount is paid in full.
COVERAGE OF CERTAIN INTEREST SHORTFALLS
To the extent of any shortfall in the amount of Available Series Interest
Collections due to the accumulation of principal in the Excess Funding Account
or the Principal Account, the Transferor Interest Collections will be made
available to cover such Negative Carry Amount and such Principal Funding
Investment Shortfall.
Interest Collections allocable to any Series in excess of the amounts
necessary to make required payments with respect to such Series ("Excess
Interest Collections") will be applied to cover any shortfalls with respect to
amounts payable from Interest Collections allocable to any other Series, pro
rata based upon the amounts of the shortfalls, if any, with respect to such
other Series. Any Excess Interest Collections remaining after covering
shortfalls with respect to all outstanding Series during a Monthly Period will
be paid to the successor Servicer, if any, to cover certain costs and expenses
and then to the holder of the Exchangeable Transferor Certificate.
DEFAULTED RECEIVABLES
Receivables will be charged off as uncollectible in accordance with the
Servicer's customary and usual policies (a "Defaulted Receivable"). See "The
Receivables--Loss and Delinquency History." On each business day, the Servicer
will allocate to the Certificateholders a portion of all Defaulted Receivables
in an amount (the "Investor Default Amount") equal to the product of (a) the
Floating Allocation Percentage applicable on such business day and (b) the
aggregate principal amount of Defaulted Receivables identified since the prior
reporting date. On each business day, the Servicer will allocate to the Class
A, Class B and Class C Certificateholders a portion of all Defaulted
Receivables in an amount (the "ABC Investor Default Amount") equal to the
product of (a) the sum of the Class A Floating Allocation Percentage, the Class
B Floating Allocation Percentage and the Class C Floating Allocation Percentage
applicable on such business day and (b) the aggregate principal amount of
Defaulted Receivables identified since the prior reporting date. On each
business day, the Servicer will allocate to the Class D Certificateholders a
portion of all Defaulted
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Receivables in an amount (the "Class D Investor Default Amount") equal to the
product of (a) the Class D Floating Allocation Percentage and (b) the aggregate
principal amount of Defaulted Receivables identified since the prior reporting
date.
INVESTOR CHARGE-OFFS
If on the third business day preceding each Distribution Date (the
"Determination Date"), the aggregate Investor Default Amount, if any, for all
business days in the preceding Monthly Period exceeded the aggregate amount of
the Available Series Interest Collections, Excess Interest Collections and
Reallocated Principal Collections allocated with respect thereto during such
Monthly Period, then the Class D Invested Amount will be reduced by the
aggregate amount of such excess, but not more than the remaining aggregate
Investor Default Amount for such Monthly Period (a "Class D Investor Charge-
Off"). The Class D Invested Amount thereafter will be increased (but not in
excess of the unpaid principal balance of the Class D Certificates) on any
business day by the amounts allocated and available for that purpose as
described under clause (xii) of "--Application of Collections--Payment of Fees,
Interest, and Other Items."
In the event that any such reduction of the Class D Invested Amount would
cause the Class D Invested Amount to be a negative number, the Class D Invested
Amount will be reduced to zero, and the Class C Invested Amount will be reduced
by the aggregate amount of such excess, but not more than the remaining
aggregate Investor Default Amount for such Monthly Period (a "Class C Investor
Charge-Off"), which will have the effect of slowing or reducing the return of
principal to the Class C Certificateholders. The Class C Invested Amount will
thereafter be increased (but not in excess of the unpaid principal balance of
the Class C Certificates) on any Monthly Period by the amounts allocated and
available for that purpose as described under clause (xi) of "--Application of
Collections--Payment of Fees, Interest, and Other Items."
In the event that any such reduction of the Class C Invested Amount would
cause the Class C Invested Amount to be a negative number, the Class C Invested
Amount will be reduced to zero, and the Class B Invested Amount will be reduced
by the aggregate amount of such excess, but not more than the remaining
aggregate Investor Default Amount for such Monthly Period (a "Class B Investor
Charge-Off"), which will have the effect of slowing or reducing the return of
principal to the Class B Certificateholders. The Class B Invested Amount will
thereafter be increased (but not in excess of the unpaid principal balance of
the Class B Certificates) on any Monthly Period by the amounts allocated and
available for that purpose as described under clause (x) of "--Application of
Collections--Payment of Fees, Interest, and Other Items."
In the event that any such reduction of the Class B Invested Amount would
cause the Class B Invested Amount to be a negative number, the Class B Invested
Amount will be reduced to zero, and the Class A Invested Amount will be reduced
by the amount by which the Class B Invested Amount would have been reduced
below zero, but not more than the remaining aggregate Investor Default Amount
for such Monthly Period (a "Class A Investor Charge-Off"). The Class A Invested
Amount will thereafter be increased (but not in excess of the unpaid principal
balance of the Class A Certificates) on any Monthly Period by the amounts
allocated and available for that purpose as described under clause (vii) of "--
Application of Collections--Payment of Fees, Interest, and Other Items."
COMPANION SERIES
The Series 1995-1 Certificates may be paired with one or more other Series
(each a "Companion Series"). Each Companion Series either will be prefunded
with an initial deposit to a prefunding account in an amount up to the initial
principal balance of such Companion Series, funded primarily from the proceeds
for the sale of such Companion Series, or will have a variable principal
amount. Any such prefunding account will be held for the benefit of such
Companion Series and not for the benefit of Series 1995-1 Certificateholders.
As principal is paid with respect to the Series 1995-1 Certificates, either (i)
in the case of a prefunded Companion Series, an equal amount of funds on
deposit in any prefunding account for such prefunded Companion Series will be
released (which funds will be distributed to the Transferor) or (ii) in the
case of a Companion Series
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having a variable principal amount, an interest in such variable Companion
Series in an equal or lesser amount may be sold by the Trust (and the proceeds
thereof will be distributed to the Transferor) and, in either case, the
invested amount in the Trust of such Companion Series will increase by up to
corresponding amount. Upon payment in full of the Series 1995-1 Certificates,
assuming that there have been no unreimbursed charge-offs with respect to any
related Companion Series, the aggregate invested amount of such related
Companion Series will have been increased by an amount up to an aggregate
amount equal to the Series 1995-1 Investor Interest paid to the Series 1995-1
Certificateholders since the issuance of such Companion Series. The issuance of
a Companion Series will be subject to the conditions described under
"Description of the Certificates--Exchanges" in the Prospectus. There can be no
assurance, however, that the terms of any Companion Series might not have an
impact on the timing or amount of payments received by a Series 1995-1
Certificateholder. In particular, the denominator of the ABC Fixed/Floating
Allocation Percentage may be increased upon the occurrence of a Pay Out Event
with respect to a Companion Series resulting in a possible reduction of the
percentage of collections of Principal Receivables allocated to Series 1995-1
if such event allowed the payment of principal at such time to the Companion
Series and required reliance by Series 1995-1 on clause (y) of the denominator
of the ABC Fixed/Floating Allocation Percentage for Series 1995-1. See
"Maturity Considerations" and "--Allocation Percentages" herein.
FINAL PAYMENT OF PRINCIPAL; TERMINATION
The Class A Certificates, the Class B Certificates, and the Class C
Certificates will each be subject to optional repurchase by the Transferor on
any Distribution Date after the sum of the Class A Invested Amount, the Class B
Invested Amount and the Class C Invested Amount is reduced to an amount less
than or equal to $ (10% of the initial outstanding principal amount of
the Class A Certificates, the Class B Certificates and the Class C
Certificates), if certain conditions set forth in the Pooling and Servicing
Agreement are satisfied. The repurchase price will be equal to (i) the unpaid
Class A Invested Amount plus accrued and unpaid interest on the Class A
Certificates, (ii) the unpaid Class B Invested Amount plus accrued and unpaid
interest on the Class B Certificates, (iii) the unpaid Class C Invested Amount
plus accrued and unpaid interest on the Class C Certificates and (iv) the
unpaid Class D Invested Amount. In each case interest will accrue through the
day preceding the Distribution Date on which the repurchase occurs.
The Certificates will be retired on the day following the Distribution Date
on which the final payment of principal is scheduled to be made to the
Certificateholders, whether as a result of optional reassignment to the
Transferor or otherwise. Subject to prior termination as provided above, the
Pooling and Servicing Agreement provides that the final distribution of
principal and interest on the Offered Certificates will be made on the
, Distribution Date (the "Series 1995-1 Termination Date"),
except to the extent provided below. In the event that the Invested Amount is
greater than zero, exclusive of any Class held by the Transferor, on the
Termination Date, the Trustee will sell or cause to be sold (and apply the
proceeds first to the Class A Certificates until paid in full, then to the
Class B Certificates until paid in full, then to the Class C Certificates until
paid in full, and finally to the Class D Certificates to the extent necessary
to pay such remaining amounts to all Certificateholders pro rata within each
Class as final payment of the Certificates) interests in the Receivables or
certain Receivables, as specified in the Pooling and Servicing Agreement and
the Series 1995-1 Supplement, in an amount up to 110% of the Invested Amount at
the close of business on such date (but not more than the total amount of
Receivables allocable to the Certificates in accordance with the Pooling and
Servicing Agreement). If the sale contemplated by the preceding sentence has
not occurred by the Termination Date, the affected Certificateholders shall
remain entitled to receive proceeds of such sale when it occurs. The net
proceeds of such sale and any collections on the Receivables, up to an amount
equal to the Invested Amount plus accrued interest due on the Certificates,
will be paid on the Termination Date first to Class A Certificateholders until
the Class A Invested Amount is paid in full, then to the Class B
Certificateholders until the Class B Invested Amount is paid in full, then to
the Class C Certificateholders until the Class C Invested Amount is paid in
full, and then to the Class D Certificateholders until the Class D Invested
Amount is paid in full.
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Unless the Servicer and the holder of the Exchangeable Transferor Certificate
instruct the Trustee otherwise, the Trust will terminate on the earlier of (a)
the day after the Distribution Date following the date on which funds shall
have been deposited in the Distribution Account for the payment to
certificateholders outstanding sufficient to pay in full the aggregate investor
interest of all Series outstanding plus interest thereon at the applicable
certificate rates to the next Distribution Date and (b) a date which shall not
be later than , , or (c) if the Receivables are sold, disposed of
or liquidated following the occurrence of an Insolvency Event, immediately
following such sale, disposition or liquidation (such date, the "Trust
Termination Date". Upon the termination of the Trust and the surrender of the
Exchangeable Transferor Certificate, the Trustee will convey to the holder of
the Exchangeable Transferor Certificate all right, title, and interest of the
Trust in and to the Receivables and other funds of the Trust (other than funds
on deposit in the Distribution Account and other similar bank accounts of the
Trust with respect to any Series).
PAY OUT EVENTS
As described above, the Revolving Period will continue through the end of the
Monthly Period, unless a Pay Out Event occurs prior to such date or
the Initial Principal Payment Date is not extended by the Servicer. A "Pay Out
Event" refers to any of the following events:
(i) failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within five Business Days after the day on which it
is required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
(ii) failure on the part of the Transferor, the Servicer or Green Tree,
as applicable, (i) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Purchase Agreement, on or before the date
such payment or deposit is required to be made therein, which failure is
not cured within five business days after written notice from the Trustee
of such failure; or (ii) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within ten
business days after written notice from the Trustee of such failure); (iii)
to comply with its covenant not to create any lien on a Receivable which
failure has a material adverse effect on the holders of the Certificates
and which continues unremedied for a period of 60 days after written notice
to it; provided, however, that any Pay Out Event shall not be deemed to
have occurred if the Transferor shall have repurchased the related
Receivables or, if applicable, all the Receivables during such period in
accordance with the provisions of the Pooling and Servicing Agreement; or
(iv) to observe or perform in any material respect any other covenants or
agreements set forth in the Pooling and Servicing Agreement or the Purchase
Agreement, which failure has a materially adverse effect on the
Certificateholders and which continues unremedied for a period of 45 days
after written notice of such failure;
(iii) any representation or warranty made by Green Tree in the Purchase
Agreement or by the Transferor in the Pooling and Servicing Agreement or
any information required to be given by the Transferor to the Trustee to
identify the Accounts provides to have been incorrect in any material
respect when made and continues to be incorrect in any material respect for
a period of 60 days after written notice and as a result the interests of
the Certificateholders are materially and adversely affected (excluding,
however, any representation or warranty made by the Transferor that the
Pooling and Servicing Agreement constitutes, or the transfer of the
Receivables to the Trust is, a valid sale, transfer and assignment to the
Trust or all right, title and interest of the Transferor in the Receivables
and the Collateral Security if the Pooling and Servicing Agreement
constitutes the grant of a security interest in the Receivables and
Collateral Security); provided, however, that any Pay Out Event shall not
be deemed to occur thereunder if the Transferor has repurchased the related
Receivables or all such Receivables, if applicable, during such period in
accordance with the provisions of the Pooling and Servicing Agreement;
(iv) the occurrence of certain events of bankruptcy, insolvency or
receivership relating to Green Tree or the Transferor;
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(v) the Trust or the Transferor becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended;
(vi) on any Determination Date, the Transferor Interest for the next
Distribution Date will be reduced to an amount less than the Minimum
Transferor Interest on such Determination Date after giving effect to the
distributions to be made on the next Distribution Date;
(vii) any Servicer Default occurs;
(viii) on any Determination Date, the average of the Monthly Payment
Rates for the three preceding Monthly Periods, where the Monthly Payment
Rate for a Monthly Period is the percentage obtained by dividing the
aggregate of the Receivables balances (without deducting therefrom any
discount portion) collected during such Monthly Period by the average daily
aggregate Receivables balance (without deducting therefrom any discount
portion) for such Monthly Period, is less than 15%;
(ix) the failure to pay the outstanding principal amount of the Class A,
Class B or Class C Certificates by the Class A Scheduled Payment Date,
Class B Scheduled Payment Date or the Class C Expected Final Payment Date,
as applicable;
(x) the ratio (expressed as a percentage) of (i) the average for each
month of the net losses on the Receivables (exclusive of the Ineligible
Receivables) owned by the Trust (i.e., gross losses less recoveries on any
such Receivables (including, without limitation, recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds)) during any three consecutive
calendar months to (ii) the average of the month-end aggregate balances of
such Receivables (without deducting therefrom the discount portion) for
such three-month period, exceeds 5% on an annualized basis; provided, that
this clause (x) may be amended or waived with the consent of the Transferor
and each Rating Agency and without the consent of any Certificateholder;
and
(xi) the sum of all Eligible Investments and amounts on deposit in the
Excess Funding Account represents more than 50% of the total assets of the
Trust on each of six or more consecutive Determination Dates, after giving
effect to all payments made or to be made on the Distribution Date next
succeeding each such respective Determination Date.
In the case of any event described in clause (i), (ii), (iii) or (vii) above,
a Pay Out Event will be deemed to have occurred with respect to the
Certificates only if, after any applicable grace period, the Certificateholders
evidencing undivided interests aggregating more than 50% of the Invested
Amount, by written notice to the Transferor and the Servicer declare that a Pay
Out Event has occurred with respect to the Certificates as of the date of such
notice. In the case of any event described in clause (iii) or (v) above, a Pay
Out Event with respect to all Series then outstanding, and in the case of any
event described in clause (iv), (vi) or (viii), a Pay Out Event with respect
only to the Certificates, will be deemed to have occurred without any notice or
other action on the part of the Trustee or the Certificateholders or all
certificateholders, as appropriate, immediately upon the occurrence of such
event. On the date on which a Pay Out Event is deemed to have occurred, the
Early Amortization Period will commence. In such event, distributions of
principal to the Certificateholders will begin on the first Distribution Date
following the month in which such Pay Out Event occurred. If, because of the
occurrence of a Pay Out Event, the Early Amortization Period begins,
Certificateholders will begin receiving distributions of principal earlier than
they otherwise would have, which may shorten the average life of the
Certificates.
In addition to the consequences of a Pay Out Event discussed above, if, (i)
pursuant to certain provisions of federal law, the Transferor voluntarily
enters liquidation or a trustee in bankruptcy is appointed for the Transferor,
or (ii) the Retained Percentage is equal to or less than 2% on the day of such
event (an "Insolvency Event") the Transferor will immediately cease to transfer
Receivables to the Trust and promptly give notice to the Trustee of such event.
Within 15 days, the Trustee will publish a notice of the liquidation or the
appointment stating that the Trustee intends to sell, dispose of, or otherwise
liquidate the Receivables in a commercially reasonable manner. With respect to
each Series outstanding at such time (or, if any such Series has more than one
class, of each class of such Series excluding any class or portion thereof held
by the
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Transferor), unless otherwise instructed within a specified period by
certificateholders representing undivided interests aggregating more than 50%
of the invested amount of such Series (or class excluding any class or portion
thereof held by the Transferor) and the holders of any Supplemental
Certificates or any other interest in the Exchangeable Transferor Certificate
other than the Transferor, the Trustee will sell, dispose of, or otherwise
liquidate the portion of the Receivables allocable to the Series that did not
vote to continue the Trust in accordance with the Pooling and Servicing
Agreement in a commercially reasonable manner and on commercially reasonable
terms. The proceeds from the sale, disposition, or liquidation of the
Receivables will be treated as collections of the Receivables allocable to such
Certificateholders and will be distributed to the applicable Certificateholders
as provided above in "--Application of Collections."
If the only Pay Out Event to occur is either the bankruptcy or insolvency of
the Transferor or the appointment of a bankruptcy trustee or receiver for the
Transferor, the bankruptcy trustee or receiver may have the power to prevent
the early sale, liquidation, or disposition of the Receivables and the
commencement of the Early Amortization Period. In addition, a bankruptcy
trustee or receiver may have the power to cause the early sale of the
Receivables and the early retirement of the Certificates.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities and reimbursement
for its expenses will take the form of the payment to it of a servicing fee in
an amount for any Monthly Period equal to the sum of (i) with respect to each
Series, one-twelfth of the product of (x) the applicable servicing fee
percentage with respect to such Series and (y) the Invested Amount of such
Series on the first day of such Monthly Period and (u) one-twelfth of the
product of the weighted average servicing fee percentage for all Series and the
average Transferor Interest for such Monthly Period. The monthly servicing fee
will be allocated between the Transferor Interest, the Certificateholders'
Interest, and the investor interest for all other Series. The portion of the
servicing fee allocable to the Certificateholders' Interest during each Monthly
Period (the "Monthly Servicing Fee") will be equal to one-twelfth of the
product of (x) the Servicing Fee Rate per annum and (y) the Invested Amount on
the preceding Record Date or, in the case of the first Distribution Date, the
initial principal amount of the Certificates. The Monthly Servicing Fee will be
funded from Interest Collections allocated to the Certificateholders' Interest,
and will be paid each month from the amount so allocated and on deposit in the
Collection Account. See "--Application of Collections--Payment of Fees,
Interest, and Other Items" above. The remainder of the servicing fee will be
allocable to the Transferor Interest and the investor interests of other
Series. Neither the Trust nor the Certificateholders will have any obligation
to pay such portion of the servicing fee.
The Servicer will be permitted to waive its right to receive the Servicing
Fee on any Distribution Date, so long as it believes that sufficient Interest
Collections will be available on a future Distribution Date to pay the Monthly
Servicing Fee relating to such waived Servicing Fee, in which case the
Servicing Fee and the Monthly Servicing Fee for such Distribution Date shall be
deemed to be zero.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables, including, without
limitation, payment of the fees and disbursements of the Trustee and
independent certified public accountants and other fees which are not expressly
stated in the Pooling and Servicing Agreement to be payable by the Trust or the
Certificateholders other than federal, state, and local income and franchise
taxes, if any, of the Trust.
CERTAIN MATTERS REGARDING THE TRANSFEROR AND THE SERVICER
The Servicer may not resign from its obligations and duties under the Pooling
and Servicing Agreement, except upon determination that performance of its
duties is no longer permissible under applicable law. No such resignation will
become effective until the Trustee or a successor to the Servicer has assumed
the Servicer's responsibilities and obligations under the Pooling and Servicing
Agreement. The Servicer may
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delegate some or all of its servicing duties; provided, however, such
delegation will not relieve the Servicer of its obligation to perform such
duties in accordance with the Pooling and Servicing Agreement. In addition, any
affiliate of Green Tree may be substituted in all respects for Green Tree as
Servicer, provided that Green Tree will remain jointly and severally liable
with such affiliate.
The Pooling and Servicing Agreement provides that the Servicer will indemnify
the Trust and the Trustee from and against any reasonable loss, liability,
expense, damage, or injury suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Servicer with respect to the
activities of the Trust or the Trustee; provided, however, that the Servicer
will not indemnify (a) the Trustee for liabilities imposed by reason of fraud,
negligence, or willful misconduct by the Trustee in the performance of its
duties under the Pooling and Servicing Agreement, (b) the Trust, the
Certificateholders, or the Certificate Owners for liabilities arising from
actions taken by the Trustee at the request of Certificateholders, (c) the
Trust, the Certificateholders, or the Certificate Owners for any losses,
claims, damages, or liabilities incurred by any of them in their capacities as
investors, including without limitation, losses incurred as a result of
Defaulted Receivables, or (d) the Trust, the Certificateholders, or the
Certificate Owners for any liabilities, costs, or expenses of the Trust, the
Certificateholders, or the Certificate Owners arising under any tax law,
including without limitation, any federal, state, or local income or franchise
tax or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
required to be paid by the Trust, the Certificateholders, or the Certificate
Owners in connection with the Pooling and Servicing Agreement to any taxing
authority.
In addition, the Pooling and Servicing Agreement provides that, subject to
certain exceptions, the Transferor will indemnify the Trust and the Trustee
from and against any reasonable loss, liability, expense, damage, or injury
(other than to the extent that any of the foregoing relate to any tax law or
any failure to comply therewith) suffered or sustained by reason of any acts or
omissions or alleged acts or omissions arising out of or based upon the
arrangement created by the Pooling and Servicing Agreement as though the
Pooling and Servicing Agreement created a partnership under the Minnesota
Uniform Partnership Act in which the Transferor is a general partner.
The Pooling and Servicing Agreement provides that, except for the foregoing
indemnities, neither the Transferor nor the Servicer nor any of their
respective directors, officers, employees, or agents will be under any
liability to the Trust, the Trustee, the Certificateholders, or any other
person for any action taken, or for refraining from taking any action pursuant
to the Pooling and Servicing Agreement. Neither the Transferor nor the Servicer
nor any of their respective directors, officers, employees, or agents will be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith, or gross negligence of the Transferor, the
Servicer, or any such person in the performance of its duties thereunder or by
reason of reckless disregard of obligations and duties thereunder. In addition,
the Pooling and Servicing Agreement provides that the Servicer is not under any
obligation to appear in, prosecute, or defend any legal action that is not
incidental to its servicing responsibilities under the Pooling and Servicing
Agreement and which in its opinion may expose it to any expense or liability.
Under the Pooling and Servicing Agreement, the Transferor will be liable
directly to an injured party for the entire amount of any losses, claims,
damages or liabilities (other than those incurred by a Certificateholder in the
capacity of an investor in the Certificates) arising out of or based on the
arrangement created by the Pooling and Servicing Agreement or the actions of
the Servicer taken pursuant to the Pooling and Servicing Agreement as though
the Pooling and Servicing Agreement created a partnership under the Minnesota
Uniform Partnership Act in which the Transferor is a general partner. The
Transferor will also pay, indemnify and hold harmless each Certificateholder
for any such losses, claims, damages or liabilities (other than those incurred
by a Certificateholder in the capacity of an investor in the Certificates)
except to the extent that they lapse from any action by any Certificateholder.
In the event of a Service Transfer, the successor Servicer will indemnify the
Transferor for any losses, claims, damages and liabilities of the Transferor as
described in this paragraph arising from the actions or omissions of such
successor.
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SERVICER DEFAULT
In the event of any Servicer Default (as defined below), either the Trustee
or certificateholders representing undivided interests aggregating more than
50% of the aggregate investor interests for all outstanding Series, by written
notice to the Servicer (and to the Trustee if given by the certificateholders),
may terminate all of the rights and obligations of the Servicer as servicer
under the Pooling and Servicing Agreement and in and to the Receivables and the
proceeds thereof and the Trustee may appoint a new Servicer (a "Service
Transfer"). The rights and interest of the Transferor under the Pooling and
Servicing Agreement and in the Transferor Interest will not be affected by such
termination. Upon such termination, the Trustee will as promptly as possible
appoint a successor Servicer. If no such Servicer has been appointed and has
accepted such appointment by the time the Servicer ceases to act as Servicer,
all authority, power, and obligations of the Servicer under the Pooling and
Servicing Agreement will pass to and be vested in the Trustee. If the Trustee
is unable to obtain any bids from eligible servicers and the Servicer delivers
an officer's certificate to the effect that it cannot in good faith cure the
applicable Servicer Default, and if the Trustee is legally unable to act as a
successor Servicer, then the Trustee will give the Transferor the right to
accept reassignment of all of the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee.
A "Servicer Default" refers to any of the following events:
(i) failure by the Servicer to make any payment, transfer, or deposit, or
to give instructions to the Trustee to make certain payments, transfers, or
deposits within 10 business days after the date the Servicer is required to
do so under the Pooling and Servicing Agreement or any Supplement;
provided, however, that any such failure caused by a nonwillful act of the
Servicer shall not constitute a Servicer Default if the Servicer promptly
remedies such failure within 10 Business Days after receiving notice of
such failure or otherwise becoming aware of such failure;
(ii) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer which has a
material adverse effect on the certificateholders of any Series then
outstanding and which continues unremedied for a period of 60 days after
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by holders of Certificates evidencing undivided interests
aggregating not less than 50% of the Invested Amount of any Series
materially adversely affected thereby and continues to have a material
adverse effect on the certificateholders of any Series then outstanding for
such period; or the delegation by the Servicer of its duties under the
Pooling and Servicing Agreement, except as specifically permitted
thereunder;
(iii) any representation, warranty, or certification made by the Servicer
in the Pooling and Servicing Agreement, or in any certificate delivered
pursuant to the Pooling and Servicing Agreement, proves to have been
incorrect when made which has a material adverse effect on the
certificateholders of any Series then outstanding, and which continues to
be incorrect in any material respect for a period of 60 days after written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Trustee, or to the Servicer and Trustee by the
holders of Certificates evidencing undivided interests aggregating not less
than 50% of the Invested Amount of any Series materially adversely affected
thereby and continues to have a material adverse effect on such
certificateholders for such period; or
(iv) the occurrence of certain events of bankruptcy, insolvency, or
receivership of the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance referred
to in clause (i) above for a period of 10 business days, or referred to under
clause (ii) or (iii) for a period of 60 business days, will not constitute a
Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or other similar occurrence. Upon the occurrence of any
such event, the Servicer will not be relieved from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of the
Pooling and Servicing Agreement, and
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the Servicer will provide the Trustee, any provider of credit enhancement, the
Transferor, and the holders of certificates of all Series outstanding prompt
notice of such failure or delay by it, together with a description of the cause
of such failure or delay and its efforts to perform its obligations.
In the event of a Servicer Default, due to the bankruptcy of the Servicer, if
no Servicer Default other than such bankruptcy or the insolvency of the
Servicer exists, the bankruptcy trustee or the Servicer itself as debtor-in-
possession may have the power to prevent either the Trustee or the majority of
the certificateholders from effecting a Service Transfer.
REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, the Paying Agent will forward to each
Certificateholder of record (which is expected to be Cede & Co., as nominee for
DTC, unless Definitive Certificates are issued) a statement prepared by the
Servicer setting forth, among other things, with respect to such Series: (a)
the total amount distributed, (b) the amount of the distribution allocable to
principal on the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates, (c) the amount of such distribution
allocable to interest on the Class A Certificates, the Class B Certificates,
the Class C Certificates and the Class D Certificates, (d) the amount of
Principal Collections processed during the related Monthly Period and allocated
in respect of the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates, respectively, (e) the amount of
Interest Collections processed during the preceding Monthly Period and
allocated in respect of the Class A Certificates, the Class B Certificates, the
Class C Certificates and the Class D Certificates, respectively, (f) the
aggregate amount of Principal Receivables, the Invested Amount, the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount, the
Class D Invested Amount, the Floating Allocation Percentage, and during the
Accumulation Period, the ABC Fixed/Floating Allocation Percentage with respect
to the Principal Receivables in the Trust as of the close of business on the
Record Date, (g) the aggregate outstanding balance of Receivables which are
current, 30-59, 60-89 and 90 or more days delinquent as of the end of the day
on the Record Date, (h) the Aggregate Investor Default Amount for the related
Monthly Period, (i) the aggregate amount of Class A Investor Charge-Offs, Class
B Investor Charge-Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs for the preceding Monthly Period, (j) the amount of the Monthly
Servicing Fee for the preceding Monthly Period, and (k) the aggregate amount of
funds in the Excess Funding Account as of the last day of the Monthly Period
immediately preceding the Distribution Date. Unless and until Definitive
Certificates are issued, such reports with respect to the 1995-1 Series will be
sent to Cede & Co., as registered holder of the Certificates and the nominee of
DTC. Certificate Owners may receive copies of such reports upon written
request, together with a certification that they are Certificate Owners and
payment of any expenses associated with the distribution of such reports, from
the Trustee. See "Reports to Securityholders."
The Paying Agent will furnish to each person who at any time during the
preceding calendar year was a Certificateholder of record (which is expected to
be Cede & Co., as nominee for DTC, unless Definitive Certificates are issued) a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Certificateholders, as set forth in
clauses (a), (b), and (c) above aggregated for such calendar year or the
applicable portion thereof during which such person was a Certificateholder,
together with, on or before March 31 of each year, beginning in 1996, such
customary information (consistent with the treatment of the Certificates as
debt) as the Servicer or Trustee deems necessary or desirable for tax reporting
purposes. Moreover, as long as the Certificateholder of record is Cede, as
nominee for DTC, Certificate Owners will receive tax and other information from
Participants and Indirect Participant rather than from the Trustee.
REPORTS; NOTICES
Following the listing of the Offered Certificates on the Luxembourg Stock
Exchange, the Trustee will publish or will cause to be published following each
Distribution Date in a daily newspaper in Luxembourg
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(expected to be the Luxemburger Wort) a notice to the effect that the
information set forth in the foregoing paragraph will be available for review
at the main office of the Listing Agent of the Trust in Luxembourg, Luxembourg.
Following the listing of the Offered Certificates on the Luxembourg Stock
Exchange, notices to Certificateholders will be given by publication in a daily
newspaper in Luxembourg, which is expected to be the Luxemburger Wort. In the
event that Definitive Certificates are issued, notices to Certificateholders
will also be given by mail to the addresses of such holders as they appear in
the certificate register.
EVIDENCE AS TO COMPLIANCE
The Agreement will provide that on or before March 31 of each calendar year,
the Servicer will cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
report to the effect that such accounting firm has examined selected documents
and records relating to the servicing of the Accounts in accordance with the
Mortgage Bankers Association of America's Uniform Single Audit Program for
Mortgage Bankers, or any successor uniform program, and that, on the basis of
such examination, such firm is of the opinion that such servicing was conducted
in compliance with the Pooling and Servicing Agreement during the period
covered by such report except for such significant exceptions or errors in
records that, in the opinion of such firm, generally accepted auditing
standards requires it to report.
AMENDMENTS
The Pooling and Servicing Agreement and any Supplement may be amended by the
Transferor, the Servicer, and the Trustee, without the consent of
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of such Pooling and Servicing
Agreement and Supplements or of modifying in any manner the rights of such
Certificateholders; provided that (i) the Transferor delivers an opinion of
counsel acceptable to the trustee to the effect that such amendment will not
adversely affect in any material respect the interest of the
Certificateholders, and (ii) such amendment will not result in a withdrawal or
reduction of the rating of any outstanding series.
The Pooling and Servicing Agreement and the Supplement may be amended by the
Transferor, the Servicer, and the Trustee with the consent of the holders of
certificates evidencing undivided interests aggregating not less than 66 2/3%
of the investor interests of each and every Series adversely affected (and with
respect to Series 1995-1, the holders of not less than 66 2/3% of the Invested
Amount of each Class of Certificates), for the purpose of adding any provisions
to, changing in any manner or eliminating any of the provisions of the Pooling
and Servicing Agreement, or any Supplement or of modifying in any manner the
rights of certificateholders of any then outstanding Series. No such amendment,
however, may (a) reduce in any manner the amount of, or delay the timing of,
distributions required to be made on any such Series, (b) change the definition
of or the manner of calculating the interest of any certificateholder of such
Series, or (c) reduce the aforesaid percentage of investor interests the
holders of which are required to consent to any such amendment, in each case
without the consent of all certificateholders of all Series adversely affected.
Promptly following the execution of any amendment to the Pooling and Servicing
Agreement, the Trustee will furnish written notice of the substance of such
amendment to each Certificateholder. Any Supplement and any amendments
regarding the addition or removal of Receivables from the Trust will not be
considered an amendment requiring certificateholder consent under the
provisions of the Pooling and Servicing Agreement and any Supplement.
LIST OF CERTIFICATEHOLDERS
Upon written request of Certificateholders representing undivided interests
in the Trust aggregating not less than 10% of the Invested Amount, the Trustee
after having been adequately indemnified by such
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Certificateholders for its costs and expenses, and having given the Servicer
notice that such request has been made, will afford such Certificateholders
access during business hours to the current list of Certificateholders of the
Trust for purposes of communicating with other Certificateholders with respect
to their rights under the Pooling and Servicing Agreement. See "--Book-Entry
Registration" and "--Definitive Certificates."
THE TRUSTEE
The Transferor, the Servicer, and their respective affiliates may from time
to time enter into normal banking, lending and trustee relationships with the
Trustee and its affiliates. The Trustee, the Transferor, the Servicer, and any
of their respective affiliates may hold Certificates in their own names. In
addition, for purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee will have the power to appoint a co-trustee or
separate trustees of all or any part of the Trust. In the event of such
appointment, all rights, powers, duties, and obligations conferred or imposed
upon the Trustee by the Pooling and Servicing Agreement will be conferred or
imposed upon the Trustee and such separate trustee or co-trustee jointly, or,
in any jurisdiction in which the Trustee shall be incompetent or unqualified to
perform certain acts, singly upon such separate trustee or co-trustee who will
exercise and perform such rights, powers, duties, and obligations solely at the
direction of the Trustee.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Transferor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. In such
circumstances, the Transferor will be obligated to appoint a successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee does not become effective until acceptance of the appointment by the
successor Trustee.
If the Trustee fails to perform any of its obligations under the Pooling and
Servicing Agreement, and a certificateholder delivers written notice of such
failure to the Trustee, and the Trustee shall not have corrected such failure
for 60 days thereafter, then the holders of investor certificates representing
more than 50% of the aggregate invested amount of all Series (including related
commitments) shall have the right to remove the Trustee and (with the consent
of the Transferor, which shall not be unreasonably withheld) 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.
DESCRIPTION OF THE PURCHASE AGREEMENT
The following summary describes certain terms of the Receivables Purchase
Agreement (the "Purchase Agreement") and is qualified in its entirety by
reference to the Purchase Agreement.
TRANSFER OF RECEIVABLES
Pursuant to the Purchase Agreement, Green Tree will sell and transfer to the
Transferor all of its right, title and interest in and to all of the
Receivables and the Collateral Security as of the Cut-off Date and all of the
Receivables thereafter created. As described herein, pursuant to the Pooling
and Servicing Agreement and the related Series Supplement, the Transferor will
transfer to the Trust all of its right, title and interest in and to the
Purchase Agreement.
In connection with each such sale or transfer of Receivables to the
Transferor, Green Tree will indicate in its computer files that such
Receivables have been sold or transferred to the Transferor, and that such
Receivables have been transferred by the Transferor to the Trust. In addition,
Green Tree will provide to the Transferor a computer file or microfiche or
written list containing a true and complete list of all such Receivables,
identifying the balances of the Receivables as of the Cut-off Date. The records
and agreements
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relating to such Accounts and Receivables will not be segregated by Green Tree
from other documents and agreements relating to other accounts and receivables
and will not be stamped or marked to reflect the sale or transfer of such
Receivables to the Transferor, but the computer records of Green Tree will be
marked to evidence such sale or transfer. Green Tree will file UCC financing
statements with respect to the Receivables meeting the requirements of
Minnesota state law. See "Risk Factors--Transfer of the Receivables; Insolvency
Risk Considerations" and "Certain Legal Aspects of the Receivables--Transfer of
Receivables."
REPRESENTATIONS AND WARRANTIES
Pursuant to the Purchase Agreement, Green Tree will make certain
representations and warranties to the Transferor that, among other things, (a)
it has been duly incorporated and is in good standing and that it has the
authority to consummate the transactions contemplated by the Purchase Agreement
and (b) as of the Cut-off Date (or, in the case of an Additional Account, as of
the Additional Cut-off Date and Addition Date), each Account or Additional
Account was an Eligible Account.
Pursuant to the Purchase Agreement, Green Tree will make certain
representations and warranties to the Transferor relating to the Receivables
that, among other things, (a) as of the Cut-off Date and each Closing Date,
each of the Accounts was an Eligible Account or, if it was or is an Ineligible
Account on such date, such Account is being removed from the Trust in
accordance with the requirements of the Pooling and Servicing Agreement, (b)
the amount of Receivables that are reported as Ineligible Receivables
transferred to the Transferor on the Cut-off Date or any Additional Cut-off
Date for the purpose of facilitating the administration and reporting
obligations of the Servicer is true and correct and there are no other
Receivables that are Ineligible Receivables except as so reported and (c) as of
the date any new Receivable is created, such Receivable is an Eligible
Receivable. In the event of a breach of any representation and warranty set
forth in this paragraph which results in an Ineligible Receivable and the
requirement that the Transferor accept retransfer of such Ineligible Receivable
pursuant to the Pooling and Servicing Agreement, then Green Tree will be
obligated to repurchase such Ineligible Receivable from the Transferor on the
date of such retransfer. The purchase price for such Ineligible Receivable will
be the face amount thereof plus any accrued and unpaid interest thereon, of
which at least the amount of any cash deposit required to be made by the
Transferor under the Pooling and Servicing Agreement in respect of the
retransfer of such Ineligible Receivable must be paid in cash.
Pursuant to the Purchase Agreement, Green Tree will also make representations
and warranties to the Transferor that, among other things, that as of the
Closing Date, (a) the Purchase Agreement constitutes a legal, valid and binding
obligation of Green Tree and (b) the Purchase Agreement constitutes a valid
sale or transfer to the Transferor of all right, title and interest of Green
Tree in and to the Receivables, whether then existing or thereafter created in
the Accounts, the Collateral Security, all related security interests and other
related rights and the proceeds thereof, which is effective as to each
Receivable upon the creation thereof. If the breach of any of the
representations and warranties described in this paragraph results in the
obligation of the Transferor under the Pooling and Servicing Agreement to
accept retransfer of the Receivables, Green Tree will be obligated to
repurchase the Receivables retransferred to Green Tree for an amount of cash
equal to the amount of cash the Transferor is required to deposit under the
Pooling and Servicing Agreement in connection with such retransfer.
Green Tree will agree to indemnify the Transferor and to hold the Transferor
harmless from and against any and all losses, damages and expenses (including
reasonable attorneys' fees) suffered or incurred by the Transferor if the
foregoing representations and warranties are materially false.
CERTAIN COVENANTS
Pursuant to the Purchase Agreement, Green Tree covenants that it will perform
its obligations under the agreements relating to the Receivables and the
Accounts in conformity with its then-current policies and procedures relating
the Receivables and Accounts.
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Green Tree further covenants that, except for the sale and conveyance under
the Purchase Agreement and the interests created under the Pooling and
Servicing Agreement and the Series Supplement, Green Tree will not sell,
pledge, assign or transfer any interest in the Receivables to any other person.
Green Tree also covenants to defend and indemnify the Transferor for any loss,
liability or expense incurred by the Transferor in connection with a breach by
Green Tree of any of its representations, warranties or covenants contained in
the Purchase Agreement.
In addition, Green Tree expressly acknowledges and consents to the
Transferor's assignment of its rights relating to the Receivables under the
Purchase Agreement to the Trustee.
TERMINATION
The Purchase Agreement will terminate immediately after the Trust terminates.
In addition, if Green Tree becomes party to any bankruptcy or similar
proceeding (other than as a claimant) and, if such proceeding is not voluntary
and is not dismissed within 60 days of its institution, Green Tree will
immediately cease to sell or transfer Receivables to the Transferor and will
promptly give notice of such event to the Transferor and to the Trustee.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
On the Closing Date, Green Tree will sell and assign the Receivables to the
Transferor pursuant to the Purchase Agreement, and the Transferor will
immediately sell and assign the Receivables to the Trust pursuant to the Series
Supplement. The Transferor represents and warrants on the Closing Date that
such sale to the Trust constitutes a valid transfer and assignment to the Trust
of all right, title and interest of the Transferor in and to the Receivables,
except for the interest of any investor certificate of any Series then held by
it, or the grant to the Trust of a security interest in the Receivables. The
Transferor has also represented and warranted in the Pooling and Servicing
Agreement that, in the event the transfer of the Receivables by the Transferor
to the Trust is deemed to create a security interest under the UCC, there will
exist a valid, subsisting, and enforceable first priority perfected security
interest in such Receivables created thereafter in favor of the Trust on and
after their creation, subject to certain tax liens. For a discussion of the
Trust's rights arising from these representations and warranties not being
satisfied, see "Description of the Certificates--Representations and
Warranties."
Each of Green Tree and the Transferor has represented that the Receivables
are "general intangibles," "chattel paper" or "accounts" for purposes of the
UCC as in effect in Minnesota. If the Receivables are deemed to be general
intangibles and the transfer thereof by either Green Tree to the Transferor or
by the Transferor to the Trust is deemed to be a sale, Minnesota common law
applies and neither possession nor a financing statement is required. If the
Receivables are deemed to be general intangibles and the transfer thereof by
either Green Tree to the Transferor or by the Transferor to the Trust is deemed
to create a security interest, the UCC as in effect in Minnesota applies and
the transferee must file an appropriate financing statement or statements in
order to perfect its interest therein. If the Receivables are deemed to be
chattel paper and the transfer thereof by either Green Tree to the Transferor
or by the Transferor to the Trust is deemed either to be a sale or to create a
security interest, the UCC as in effect in Minnesota applies and the transferee
must either take possession of the chattel paper or file an appropriate
financing statement or statements in order to perfect its interest therein. If
the Receivables are treated as accounts and the transfer thereof by either by
Green Tree to the Transferor or the Transferor to the Trust is deemed either to
be a sale or create a security interest, the transferee must file an
appropriate financing statement or statements in order to perfect its interest
therein under the UCC as in effect in Minnesota. Financing statements covering
the Receivables will be filed under the UCC as in effect in Minnesota by both
the Transferor and the Trust to
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perfect their respective interests in the Receivables and continuation
statements will be filed as required to continue the perfection of such
interests. The Receivables will not be stamped to indicate the interest of the
Transferor or the Trustee.
There are certain limited circumstances under the UCC and other applicable
law in which prior or subsequent transferees of Receivables could have an
interest in such Receivables with priority over the Trust's interest. A
purchaser of the Receivables that are chattel paper who gives new value and
takes possession of the instruments that evidence the Receivables (i.e., the
chattel paper) in the ordinary course of such purchaser's business may, under
certain circumstances, have priority over the interest of the Trust in such
Receivable. Under the Purchase Agreement, Green Tree warrants to the
Transferor, and under the Agreement and Series 1995-1 Supplement the Transferor
warrants to the Trust, that the Receivables have been transferred free and
clear of the lien of any third party. Each of Green Tree and the Transferor
will also covenant that it will not sell, pledge, assign, transfer or grant any
lien on any Receivable or, except as described under "Description of the
Certificates--Additional Series; Exchanges," the Exchangeable Transferor's
Certificate (or any interest therein) other than to the Trust. A tax or other
government lien on property of Green Tree or the Transferor arising prior to
the time a Receivable comes into existence may also have priority over the
interest of the Trust in such Receivable. In addition, while Green Tree is the
Servicer, cash collections on the Receivables may, under certain circumstances,
be commingled with the funds of Green Tree prior to each Distribution Date and,
in the event of bankruptcy of Green Tree, the Trust may not have a perfected
interest in such collections.
CERTAIN MATTERS RELATING TO BANKRUPTCY
The Green Tree warrants to the Transferor in the Purchase Agreement that the
sale of the Receivables by it to the Transferor is a valid sale of the
Receivables to the Transferor. In addition, pursuant to the Purchase Agreement,
Green Tree and the Transferor will agree to treat the transactions described
herein as a sale of such Receivables to the Transferor, and Green Tree will
take all actions that are required under Minnesota law to perfect the
Transferor's ownership interest in the Receivables. Notwithstanding the
foregoing, if Green Tree were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of Green Tree or Green Tree itself as debtor-
in-possession were to take the position that the sale of Receivables from Green
Tree to the Transferor should be recharacterized as a pledge of such
Receivables to secure a borrowing from Green Tree, then delays in payments of
collections of Receivables to the Transferor could occur or (should the court
rule in favor of any such trustee, debtor-in-possession or creditor) reductions
in the amount of such payments could result.
In addition, if Green Tree were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of such debtor or Green Tree itself were to
request a court to order that Green Tree should be substantively consolidated
with the Transferor, delays in payments on the Certificates could result.
Should the bankruptcy court rule in favor of any such creditor, trustee-in-
bankruptcy or Green Tree, reductions in such payments could result.
The Transferor will warrant to the Trust that the transfer of the Receivables
to the Trust is a sale of the Receivables to the Trust. The Transferor is
required to take all actions that are required under Minnesota law to perfect
the Trust's ownership interest in the Receivables and the Transferor will
warrant to the Trust that the Trust will at all times have a first priority
perfected ownership interest therein and, with certain exceptions, the proceeds
thereof. Nevertheless, a tax or government lien on property of Green Tree or
the Transferor arising prior to the time a Receivable is conveyed to the Trust
may have priority over the interest of the Trust in such Receivable. The
Transferor's certificate of incorporation provides that, under certain
circumstances, the Transferor is required to have two independent directors (as
defined therein) in which event it shall not file a voluntary application for
relief under Title 11 of the United States Code (the "Bankruptcy Code") without
the affirmative vote of its two independent directors. Pursuant to the Pooling
and Servicing Agreement, the Trustee, all certificateholders and any Credit
Enhancement Provider with respect to any other series will covenant that they
will not at any time institute against the Transferor any
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bankruptcy, reorganization or other proceedings under any federal or state
bankruptcy or similar law. In addition, certain other steps will be taken to
avoid the Transferor's becoming a debtor in a bankruptcy case. Notwithstanding
such steps, if the Transferor were to become a debtor in a bankruptcy case, and
a bankruptcy trustee for the Transferor or the Transferor as debtor in
possession or a creditor of the Transferor were to take the position that the
transfer of the Receivables from the Transferor to the Trust should be
recharacterized as a pledge of such Receivables, then delays in payments on the
Certificates or (should the court rule in favor of any such trustee, debtor in
possession or creditor) reductions in the amount of such payments could result.
The Transferor does not intend to file, and Green Tree will agree that it
will not cause the Transferor to file, a voluntary application for relief under
the Bankruptcy Code or any similar applicable state law with respect to the
Transferor so long as the Transferor is solvent and does not foresee becoming
insolvent.
If Green Tree or the Transferor were to become a debtor in a bankruptcy case
causing a Pay Out Event to occur, then, pursuant to the Purchase Agreement, new
Receivables would no longer be transferred to the Transferor and, pursuant to
the Pooling and Servicing Agreement, only collections on Receivables
theretofore sold to the Transferor and transferred to the related Trust would
be available to be applied to pay interest accruing on the Certificates and to
pay the principal amount of the Certificates. Under such circumstances, the
Servicer is obligated to allocate all Principal Collections to the oldest
principal balance first. If such allocation method were to be altered by the
bankruptcy court, the rate of payment on the Certificates might be adversely
affected. In addition, distributions of principal on each Certificate would not
be subject to the applicable Controlled Distribution Amount. If the only Pay
Out Event to occur is either the insolvency of the Transferor or the
appointment of a bankruptcy trustee or receiver for the Transferor, the
receiver or bankruptcy trustee for the Transferor may have the power to
continue to require the Transferor to transfer new Principal Receivables to the
Trust and to prevent the early sale, liquidation, or disposition of the
Receivables and the commencement of the Early Amortization Period. See
"Description of the Offered Certificates--Pay Out Events."
The occurrence of certain events of bankruptcy, insolvency or receivership
with respect to the Servicer will result in a Servicer Default, which Servicer
Default, in turn, will result in an Early Amortization Event. If no other
Servicer Default other than the commencement of such bankruptcy or similar
event exists, a trustee-in-bankruptcy of the Servicer may have the power to
prevent either the Trustee or the Certificateholders from appointing a
successor Servicer.
Payments made in respect of repurchases of Receivables by Green Tree or the
Transferor pursuant to the Pooling and Servicing Agreement and the Series
Supplement may be recoverable by Green Tree or the Transferor, as debtor in
possession, or by a creditor or a trustee-in-bankruptcy of Green Tree or the
Transferor as a preferential transfer from Green Tree or the Transferor if such
payments are made within one year prior to the filing of a bankruptcy case in
respect of Green Tree.
In a recent decision, Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), the United States Court of Appeals for the 10th Circuit suggested
that even where a transfer of accounts from a seller to a buyer constitutes a
"true sale," the accounts would nevertheless constitute property of the
seller's bankruptcy estate in a bankruptcy of the seller. If Green Tree or the
Transferor were to become subject to a bankruptcy proceeding and a court were
to follow the Octagon court's reasoning, Certificateholders might experience
delays in payment or possibly losses in their investment in the Certificates.
Counsel has advised the seller that the reasoning of the Octagon case appears
to be inconsistent with established precedent and the UCC. In addition, because
Green Tree, the Transferor, the Trust and the transaction governed by the
Pooling and Servicing Agreement do not have any particular link to the 10th
Circuit, it is unlikely that Green Tree or the Transferor would be subject to a
receivership proceeding in the 10th Circuit. Accordingly, the Octagon case
should not be binding precedent on a court in a receivership proceeding.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a discussion of the material federal income tax
consequences to Offered Certificate Owners. This discussion is based upon
present provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the regulations promulgated thereunder, and judicial or ruling
authority, all of which are subject to change (which may be retroactive).
Dorsey & Whitney, P.L.L.P., counsel to Green Tree and the Transferor
("Counsel"), will deliver its opinion regarding certain federal income tax
matters discussed below. No ruling on any of the issues discussed below will be
sought from the Internal Revenue Service (the "IRS"). This discussion does not
deal with all aspects of federal income taxation that may be relevant to
Offered Certificate Owners in light of their personal investment circumstances,
nor to certain types of owners subject to special treatment under the federal
income tax laws (e.g., banks, life insurance companies and tax-exempt
organizations). Prospective investors are encouraged to consult their own tax
advisors with regard to the federal income tax consequences of owning and
disposing of the Certificates, as well as the tax consequences arising under
the laws of any applicable state, foreign country or other jurisdiction.
Treatment of the Certificates as Indebtedness of the Transferor. The
Transferor and the holders of Certificates will express in the Pooling and
Servicing Agreement the intent that, for federal, state and local income and
franchise tax purposes, the Offered Certificates will be indebtedness secured
by the Receivables and any other Trust assets allocable to the Offered
Certificates. The Transferor, by entering into the Pooling and Servicing
Agreement, and each Offered Certificate Owner, by the acceptance of an interest
in an Offered Certificate, will agree to treat the Offered Certificates as
indebtedness for federal, state and local income and franchise tax purposes.
The Pooling and Servicing Agreement generally will refer to the transfer of the
related Receivables as a "sale," however, and since different criteria are used
in determining the nontax accounting treatment of the transaction, the
Transferor will treat the Pooling and Servicing Agreement, for certain nontax
purposes, as effecting a transfer of an ownership interest in the Receivables
and not as creating a debt obligation.
A basic premise of federal income tax law is that the economic substance of a
transaction generally determines the tax consequences. The form of a
transaction, while a relevant factor, is not conclusive evidence of its
economic substance. In appropriate circumstances, the courts have allowed
taxpayers, as well as the IRS, to treat a transaction in accordance with its
economic substance, as determined under federal income tax law, even though the
participants in the transaction have characterized it differently for nontax
purposes.
The determination of whether the economic substance of a property transfer is
a sale or a loan secured by the transferred property has been made by the IRS
and the courts on the basis of numerous factors designed to determine whether
the transferor has relinquished (and the transferee has obtained) substantial
incidents of ownership in the property. Among those factors, the primary
factors examined are whether the transferee has the opportunity to gain if the
property increases in value and bears the risk of loss if the property
decreases in value. Based upon its analysis of such factors, Counsel, is of the
opinion that for federal income tax purposes the Offered Certificates will be
characterized as indebtedness secured by the Receivables and any other Trust
assets, and the Trust will not be characterized as an "association," "publicly
traded partnership" or "taxable mortgage pool" taxable as a corporation.
Interest Income to Certificate Owners. Assuming the Offered Certificates are
debt obligations for federal income tax purposes, interest on the Offered
Certificates will be taxable as ordinary interest income when received by
Certificate Owners utilizing the cash-basis method of accounting and when
accrued by Certificate Owners utilizing the accrual method of accounting. Under
the applicable regulations, the Offered Certificates would be considered issued
with original issue discount ("OID") if the "stated redemption price at
maturity" of an Offered Certificate (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
Offered Certificates are sold to the public). Any OID would be considered de
minimis under the regulation if it does not exceed 1/4% of the stated
redemption price at maturity of an Offered Certificate multiplied by the number
of full years until its maturity
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date. It is anticipated that the Offered Certificates will not be considered
issued with more than de minimis OID. Under the OID regulations, an owner of an
Offered Certificate 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
Offered Certificate.
While it is not anticipated that the Offered Certificates 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 Offered Certificates are not deemed to be "qualified
stated interest" because the Offered Certificates 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 Offered Certificates. In either case, all or a portion of the taxable
income to be recognized with respect to the Offered Certificates would be
includible in the income of Certificate Owners 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 Offered Certificates were not materially
different from its coupon, this treatment would have no significant effect on
Certificate Owners using the accrual method of accounting. However, cash method
Certificate Owners may be required to report income with respect to the Offered
Certificates in advance of the receipt of cash attributable to such income.
Based upon existing authority, the Transferor and the Trustee will treat
interest payments on the Offered Certificates as qualified stated interest
under the OID regulations.
A Certificate Owner must include OID in income as interest over the term of
the Offered Certificate under a constant yield method. In general, OID must be
included in income in advance of the receipt of cash representing that income.
Each Certificate Owner should consult its own tax advisor regarding the impact
of the OID rules if the Offered Certificates are issued with OID.
A Certificate Owner who purchases an Offered Certificate at a discount may be
subject to the "market discount" rules of the Code. These rules provide, in
part, for the treatment of gain attributable to accrued market discount as
ordinary income upon the receipt of partial principal payments or on the sale
or other disposition of the Offered Certificate, and for the deferral of
interest deductions with respect to debt incurred to acquire or carry the
market discount Offered Certificate. A Certificate Owner who purchases an
Offered Certificate at a premium may elect to amortize and deduct this premium
over the remaining term of the Offered Certificate in accordance with rules set
forth in Section 171 of the Code.
As an alternative to the above treatments, accrual method Certificate Owners
may elect to include in gross income all interest with respect to an Offered
Certificate, including stated interest, acquisition discount, OID, de minimis
OID, market discount, de minimis market discount, and unstated interest, as
adjusted by any amortizable bond premium or acquisition premium, using the
constant yield method.
Disposition of Offered Certificates. Generally, gain or loss will be
recognized on a sale or other taxable disposition of Offered Certificates in an
amount equal to the difference between the amount realized and the seller's tax
basis in the Offered Certificates. A Certificate Owner's tax basis in an
Offered Certificate will generally equal the cost thereof increased by any OID,
market discount and gain previously included by such Certificate Owner in
income with respect to the Offered Certificate and decreased by any bond
premium previously amortized and any principal payments previously received by
such Certificate Owner with respect to the Offered Certificate. Any such gain
or loss will be capital gain or loss if the Offered Certificate was held as a
capital asset, except for gain representing accrued interest and accrued market
discount not previously included in income. Capital gain or loss will be long-
term if the Offered Certificate was held by the holder for more than one year
and otherwise will be short-term. Any capital losses realized generally may be
used by a corporate taxpayer only to offset capital gains, and by an individual
taxpayer only to the extent of capital gains plus $3,000 of other income.
Information Reporting and Backup Withholding. The Trustee will be required to
report annually to the IRS, and to each Offered Certificateholder of record,
the amount of interest paid on the Offered Certificates (and the amount of
interest withheld for federal income taxes, if any) for each calendar year,
except as to
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exempt holders (generally, holders that are corporations, tax-exempt
organizations, qualified pension and profit-sharing trusts, individual
retirement accounts, or nonresident aliens who provide certification of their
status as nonresidents). As long as the only "Certificateholder" of record is
Cede, as nominee for DTC, Certificate Owners and the IRS will receive tax and
other information only from Participants and Indirect Participants rather than
from the Trustee. Each nonexempt Offered Certificate Owner will be required to
provide, under penalties of perjury, a certificate on IRS Form W-9 containing
the Owner's name, address, federal taxpayer identification number and a
statement that such Owner is not subject to backup withholding. Should a
nonexempt Offered Certificate Owner fail to provide the required certification,
the Trustee (or the Participants or Indirect Participants) will be required to
withhold (or cause to be withheld) 31% of the interest (and principal)
otherwise payable to the Owner, and remit the withheld amounts to the IRS as a
credit against the Owner's federal income tax liability.
Possible Classification of the Trust as a Partnership or Association. As
described above, it is the opinion of Counsel that for federal income tax
purposes the Offered Certificates will be characterized as debt and the Trust
will not be characterized as an association, publicly traded partnership or
taxable mortgage pool taxable as a corporation. However, this opinion is not
binding on the IRS and no assurance can be given that this characterization
will be sustained.
If the IRS were to contend successfully that any class of Certificates is not
debt for federal income tax purposes, the Trust might be classified for federal
income tax purposes as a partnership, an association taxable as a corporation,
or a publicly traded partnership taxable as a corporation. In the opinion of
Counsel, if the IRS were to contend successfully that the Class C Certificates
were not debt for federal income tax purposes (assuming that neither the Class
A or Class B Certificates, nor certificates of any other outstanding series,
were also recharacterized) the arrangement among the Transferor and the Class C
Certificateholders would be classified as a partnership for federal income tax
purposes and would not be treated as a publicly traded partnership because of
an exception for (i) an entity whose income is interest income that is not
derived in the conduct of a financial business or (ii) partnership interests
that are privately placed. In such case, the partnership would not be subject
to federal income tax. If the Class A or Class B Certificates are treated as
equity interests in a partnership, the partnership would in all likelihood be
treated as a publicly traded partnership. A publicly traded partnership is, in
general, taxable as a corporation. If the partnership were nevertheless not
taxable as a corporation because of an exception for an entity whose income is
interest income that is not derived in the conduct of a financial business, it
would not be subject to federal income tax. Rather, each item of income, gain,
loss, deduction and credit generated through the ownership of the Receivables
by the partnership would be passed through to the partners in the partnership
(including the Certificate Owners) according to their respective interests
therein.
The income reportable by the Offered Certificate Owners as partners in such a
partnership could differ from the income reportable by them as holders of debt.
However, except as provided below, it is not expected that such differences
would be material. If the Offered Certificate Owners were treated as partners,
a cash-basis Certificate Owner might be required to report income when it
accrues to the partnership rather than when it is received by the Certificate
Owner. Moreover, if the Offered Certificates are interests in a partnership, an
individual Certificate Owner's share of expenses of the partnership would be
miscellaneous itemized deductions that might not be deductible in whole or in
part, causing the Certificate Owner to be taxable on a greater amount of income
than the stated interest on the Offered Certificates. Finally, if any class of
Certificates is treated as equity in a partnership in which other Certificates
are debt, all or part of a tax-exempt Certificate Owner's share of income from
Certificates treated as equity would be treated as unrelated debt-financed
income taxable to the Certificate Owner.
Alternatively, if the Trust were treated as either an association taxable as
a corporation, a publicly traded partnership or taxable mortgage pool taxable
as a corporation, the resulting entity would be subject to federal income taxes
at corporate tax rates on its taxable income generated by ownership of the
Receivables. Distributions by the entity (other than interest distributions on
classes of Certificates properly characterized
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as debt) would probably not be deductible in computing the entity's taxable
income. Such an entity-level tax could result in reduced distributions to
Offered Certificate Owners, and the Offered Certificate Owners could be liable
for a share of such a tax. Moreover, all or part of the distributions on
Certificates treated as equity would probably be treated as dividend income to
the recipients, although such dividends might, under certain circumstances, be
eligible for the dividends received deduction under the Code.
Since the Transferor will treat the Offered Certificates as indebtedness for
federal income tax purposes, the Trustee (and Participants and Indirect
Participants) will not comply with the tax reporting requirements that would
apply under these alternative characterizations of the Offered Certificates.
Foreign Investors. If, in accordance with the opinion of Counsel, the Offered
Certificates are classified as debt for federal income tax purposes, the
following information describes the federal income tax treatment of investors
that are not U.S. persons (each a "Foreign Person"). The term "Foreign Person"
means any person other than (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity organized in or under the laws
of the United States or any political subdivision thereof or (iii) an estate or
trust the income of which is includible in gross income for U.S. federal income
tax purposes, regardless of its source.
(a) Interest paid or accrued to a Foreign Person would be exempt from
U.S. withholding taxes (including backup withholding taxes); provided that
the Foreign Person complies with applicable identification requirements
(and does not actually or constructively own 10% or more of the voting
stock of Green Tree and is not a controlled foreign corporation with
respect to Green Tree). Applicable identification requirements will be
satisfied if there is delivered to a securities clearing organization (or
bank or other financial institution that holds the Offered Certificates on
behalf of the customer in the ordinary course of its trade or business) (i)
IRS Form W-8 signed under penalties of perjury by the beneficial owner of
the Offered Certificates stating that the owner is not a U.S. person and
providing the owner's name and address, (ii) IRS Form 1001 signed by the
beneficial owner of the Offered Certificates or the owner's agent claiming
exemption from withholding under an applicable tax treaty, or (iii) IRS
Form 4224 signed by the beneficial owner of the Offered Certificates or the
owner's agent claiming exemption from withholding of tax on income
connected with the conduct of a trade or business in the United States;
provided that in any such case (x) the applicable form is delivered
pursuant to applicable procedures and is properly transmitted to the United
States entity otherwise required to withhold tax and (y) none of the
entities receiving the form has actual knowledge that the owner is a U.S.
person or that any certification on the form is false.
(b) An owner of an Offered Certificate who is a Foreign Person will not
be subject to United States federal income tax on gain realized on the
sale, exchange or redemption of the Offered Certificate, provided that (i)
the gain is not effectively connected to a trade or business carried on by
the owner in the United States, (ii) in the case of an owner who is an
individual, the owner is not present in the United States for 183 days or
more during the taxable year in which the sale, exchange or redemption
occurs, (iii) in the case of gain representing accrued interest, the
conditions described in clause (a) are satisfied, and (iv) the Offered
Certificate was held as a capital asset.
(c) If the interest, gain or income on an Offered Certificate held by a
Foreign Person is effectively connected with the conduct of a trade or
business in the United States by the Foreign Person, the holder (although
exempt from the withholding tax previously discussed if an appropriate
statement is furnished) generally will be subject to United States federal
income tax on the interest, gain or income at regular federal income tax
rates. In addition, if the Foreign Person is a foreign corporation, it may
be subject to a branch profits tax equal to 30 percent of its "effectively
connected earnings and profits" within the meaning of the Code for the
taxable year, as adjusted for certain items, unless it qualifies for a
lower rate under an applicable tax treaty.
(d) An Offered Certificate owned by an individual who at the time of
death is a nonresident alien will not be subject to United States federal
estate tax as a result of the owner's death if, immediately
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before his death, (i) the decedent did not actually or constructively own
10% or more of the voting stock of Green Tree Financial Corporation and
(ii) the ownership of the Offered Certificate was not effectively connected
with the conduct by the decedent of a trade or business in the United
States.
If the IRS were to contend successfully that the Offered Certificates are
equity interests in a partnership (not taxable as a corporation), an Offered
Certificate Owner that is a Foreign Person might be required to file a U.S.
income tax return and pay tax on its share of partnership income at regular
U.S. rates, including, in the case of a corporation, the branch profits tax
(and would be subject to withholding tax on its share of partnership income).
If the Offered Certificates are recharacterized as equity interests in an
association taxable as a corporation or a publicly traded partnership taxable
as a corporation, an owner who is a Foreign Person would generally be taxed
(and be subject to withholding) on the gross amount of the distributions on the
Offered Certificates, to the extent they are treated as dividends, at the rate
of 30% (unless the rate is reduced by applicable treaty).
STATE AND LOCAL TAX CONSEQUENCES
The activities to be undertaken by the Servicer in servicing and collecting
the Receivables will take place in Minnesota. The State of Minnesota imposes an
income tax on individuals, trusts and estates and a franchise tax measured by
net income on corporations. This discussion of Minnesota taxation is based upon
current statutory provisions and the regulations promulgated thereunder, and
applicable judicial or ruling authority, all of which are subject to change
(which may be retroactive). No ruling on any of the issues discussed below will
be sought from the Minnesota Department of Revenue.
If the Offered Certificates are treated as debt of the Transferor for federal
income tax purposes, in the opinion of Counsel this treatment will also apply
for Minnesota tax purposes, and the Trust will not be characterized as an
association, publicly traded partnership or taxable mortgage pool taxable as a
corporation for Minnesota tax purposes. Certificate Owners not otherwise
subject to Minnesota income or franchise taxation would not become subject to
such a tax solely because of their ownership of the Offered Certificates.
Certificate Owners already subject to income or franchise taxation in Minnesota
could, however, be required to pay such a tax on all or a portion of the income
generated from ownership of the Offered Certificates.
If the Trust is treated as a partnership (not taxable as a corporation) for
federal income tax purposes, in the opinion of Counsel the Trust would also be
treated as such a partnership for Minnesota income tax purposes. The
partnership therefore would not be subject to Minnesota taxation. Certificate
Owners that are not otherwise subject to Minnesota income or franchise taxation
would not become subject to such a tax solely because of their interests in the
constructive partnership. Certificate Owners already subject to income or
franchise taxation in Minnesota could, however, be required to pay such a tax
on all or a portion of the income from the constructive partnership.
If the Offered Certificates are treated as ownership interests in an
association or publicly traded partnership taxable as a corporation, in the
opinion of Counsel this treatment would also apply for Minnesota income and
franchise tax purposes. Pursuant to this treatment, the Trust would be subject
to the Minnesota franchise tax measured by net income (which could result in
reduced distributions to Certificate Owners). Certificate Owners that are not
otherwise subject to Minnesota income or franchise taxation would not become
subject to such a tax solely because of their interests in the constructive
corporation. Certificate Owners already subject to income or franchise taxation
in Minnesota could, however, be required to pay such a tax on all or a portion
of the income from the constructive corporation.
Because state tax laws vary, it is not possible to describe the tax
consequences to the Certificate Owners in all of the states. Certificate Owners
are therefore urged to consult their own tax advisors with respect to the state
tax treatment of the Offered Certificates and income derived therefrom.
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EMPLOYEE BENEFIT PLAN CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension, profit
sharing or other employee benefit plan that is subject to such provisions 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 on persons who are
fiduciaries of plans subject to ERISA and prohibits certain transactions
between a plan and parties in interest with respect to such plans. Under ERISA,
any person who exercises any authority or control respecting the management or
disposition of the assets of a plan is considered to be a fiduciary of such
plan (subject to certain exceptions not here relevant). A violation of these
"prohibited transaction" rules may generate excise tax and other liabilities
under ERISA and the Code for such persons.
Plan fiduciaries must determine whether the acquisition and holding of the
Offered Certificates and the operations of the Trust would result in direct or
indirect prohibited transactions under ERISA and the Code. The operations of
the Trust could result in prohibited transactions if Benefit Plans that
purchase the Offered Certificates are deemed to own an interest in the
underlying assets of the Trust. There may also be an improper delegation of the
responsibility to manage Benefit Plan assets if Benefit Plans that purchase the
Offered Certificates are deemed to own an interest in the underlying assets of
the Trust.
Pursuant to a final regulation (the "Final Regulation") issued by the
Department of Labor (the "DOL") concerning the definition of what constitutes
the "plan assets" of an employee benefit plan subject to Title I of ERISA or
Section 4975 of the Code, or an individual retirement account ("IRA")
(collectively referred to as "Benefit Plans"), the assets and properties of
certain entities in which a Benefit Plan makes an equity investment could be
deemed to be assets of the Benefit Plan in certain circumstances. Accordingly,
if Benefit Plans purchase Offered Certificates, the Trust could be deemed to
hold plan assets unless one of the exceptions under the Final Regulation is
applicable to the Trust.
The Final Regulation applies to the purchase by a Benefit Plan of an "equity
interest" in an entity. Assuming that interests in Offered Certificates are
equity interests, the Final Regulation contains an exception that provides that
if a Benefit Plan acquires a "publicly offered security," the issuer of the
security is not deemed to hold plan assets. A publicly offered security is a
security that is (i) freely transferable, (ii) part of a class of securities
that is owned by 100 or more investors independent of the issuer and of one
another and (iii) either is (A) part of a class of securities registered under
Section 12(b) or 12(g) of the Exchange Act or (B) sold to the plan as part of
an offering of securities to the public pursuant to an effective registration
statement under the Securities Act and the class of securities of which such
security is a part is registered under the Exchange Act within 120 days (or
such later time as may be allowed by the Commission) after the end of the
fiscal year of the issuer during which the offering of such securities to the
public occurred. In addition, the Final Regulation provides that if at all
times less that 25% of the value of all classes of equity interests in
Certificates are held by benefit plan investors (which is defined as including
plans subject to ERISA, government plans and IRA's), the investing plan's
assets will not include any of the underlying assets of the Trust.
It is anticipated that interests in the Class A Certificates will meet the
criteria of publicly offered securities as set forth above. The Underwriters
expect, although no assurances can be given, that interests in the Class A
Certificates will be held by at least 100 independent investors at the
conclusion of the offering; there are no restrictions imposed on the transfer
of interests in the Class A Certificates; and interests in the Class A
Certificates will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act and thereafter will be timely
registered under the Exchange Act.
The Underwriter of the Class B Certificates expects that the Class B
Certificates will not be held by at least 100 persons. Consequently, the
publicly offered security exception contained in the regulations will not be
met with respect to the Class B Certificates. Consequently, no transfer of a
Class B Certificate will be permitted to be made to a Benefit Plan unless such
Benefit Plan, at its expense, delivers to the Trustee and
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the Transferor an opinion of counsel satisfactory to them to the effect that
the purchase or holding of a Class B Certificate by such Benefit Plan will not
result in the assets of the Trust being deemed to be "assets of the Benefit
Plan" or subject to the prohibited transaction provisions of ERISA and the Code
and will not subject the Trustee, the Transferor or the Servicer to any
obligation in addition to those undertaken in the Pooling and Servicing
Agreement. Unless such opinion is delivered, each person acquiring a Class B
Certificate or the beneficial ownership of a Class B Certificate will be deemed
to represent to the Trustee, the Transferor and the Servicer that such person
is not a Benefit Plan subject to ERISA or Section 4975 of the Code.
If interests in a Class of the Offered Certificates fail to meet the criteria
of publicly offered securities, the Trust's assets may be deemed to include
assets of Benefit Plans that are holders of the Certificates of such Class, and
transactions involving the Trust and "parties in interest" or "disqualified
persons" with respect to such Benefit Plans might be prohibited under Section
406 of ERISA and Section 4975 of the Code unless an exemption is applicable. In
addition, the Transferor or any of the Underwriters may be considered to be a
party in interest, disqualified person or fiduciary with respect to an
investing Benefit Plan. Accordingly, an investment by a Benefit Plan in Offered
Certificates may be a prohibited transaction under ERISA and the Code unless
such investment is subject to a statutory or administrative exemption. Thus,
for example, if a participant in any Benefit Plan is an Obligor, under DOL
interpretations the purchase of interests in Offered Certificates by such plan
could constitute a prohibited transaction. Three class exemptions issued by the
DOL that could apply in such event are DOL Prohibited Transaction Exemption 84-
14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers), 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds) and 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts). There is no assurance that these exemptions even if all of the
conditions specified therein are satisfied, or any other exemption will apply
to all transactions involving the Trust's assets.
In light of the foregoing, fiduciaries of a Benefit Plan considering the
purchase of interests in Offered Certificates should consult their own counsel
as to whether the assets of the Trust which are represented by such interests
would be considered plan assets, and whether, under the general fiduciary
standards of investment prudence and diversification, an investment in Offered
Certificates is appropriate for the Benefit Plan taking into account the
overall investment policy of the Benefit Plan and the composition of the
Benefit Plan's investment portfolio. In addition, fiduciaries should consider
the consequences that would apply if the Trust's assets were considered plan
assets, the applicability of exemptive relief from the prohibited transaction
rules, and, whether all conditions for such exemptive relief would be
satisfied. In this regard, purchasers that are insurance companies should
consult with their counsel with respect to the recent United States Supreme
Court case interpreting the fiduciary responsibility rules of ERISA, John
Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank, 144 S.Ct.
517 (1993). In John Hancock, the Supreme Court ruled that assets held in an
insurance company's general account may be deemed to be "plan assets" for ERISA
purposes under certain circumstances. Prospective purchasers should determine
whether the decision affects their ability to make purchases of the Offered
Certificates.
89
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
dated , 1995 (the "Underwriting Agreement"), among the Transferor and the
underwriters named below (the "Underwriters"), the Transferor has agreed to
sell to each of the Underwriters, and each of the Underwriters has severally
agreed to purchase from the Transferor, the principal amount of the Offered
Certificates set forth opposite its name below.
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
CLASS A CLASS B
UNDERWRITER CERTIFICATES CERTIFICATES
----------- ------------ ------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................... $ $
Bear, Stearns & Co. Inc........................
---------- ----------
Total...................................... $ $
========== ==========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Offered
Certificates offered hereby if any Offered Certificates are purchased. In the
event of a default by any Underwriter, the Underwriting Agreement provides
that, in certain circumstances, the purchase commitments of the nondefaulting
Underwriter may be increased or the Underwriting Agreement may be terminated.
The Transferor has been advised by the Underwriters that the Underwriters
propose initially to offer the Class A Certificates to the public at the public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of % of the principal
amount of the Class A Certificates. The Underwriters may allow, and such
dealers may reallow, a discount with respect to the Class A Certificates not in
excess of % of such principal amount to certain other dealers. The Transferor
has been advised by the Underwriter of the Class B Certificates that the
Underwriter of the Class B Certificates proposes initially to offer the Class B
Certificates to the public at the public offering price set forth on the cover
page of this Prospectus, and to certain dealers at such price less a concession
not in excess of % of the principal amount of the Class B Certificates. The
Underwriter of the Class B Certificates may allow, and such dealers may
reallow, a discount with respect to the Class B Certificates not in excess of
% of such principal amount to certain other dealers. After the initial public
offering, the public offering price, concession and discount may be changed.
The Underwriting Agreement provides that the Transferor and Green Tree will
indemnify the Underwriters against certain liabilities, including liabilities
under applicable securities laws, or contribute to payments the Underwriters
may be required to make in respect thereof.
Each Underwriter has represented and agreed that (a) it has complied and will
comply with all applicable provisions of the Financial Services Act of 1986
with respect to anything done by it in relation to the Certificates in, from or
otherwise involving the United Kingdom; (b) it has only issued or passed on and
will only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Certificates to a person who is of a kind
described in Article 9(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions) Order 1988 or who is a person to whom the document
may otherwise lawfully be issued or passed on; (c) if that Underwriter is an
authorized person under Chapter III of the Financial Services Act of 1986, it
has only promoted and will only promote (as that term is defined in Regulation
1.02 of the Financial Services (Promotion of Unregulated Schemes) Regulations
1991) to any person in the United Kingdom the scheme described in this
Prospectus if that person is of a kind described either in Section 76(2) of the
Financial Services Act of 1986 or in Regulation 1.04 of the Financial Services
(Promotion of Unregulated Schemes) Regulation 1991; and (d) it is a person of a
kind described in Article 9(3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1988.
90
<PAGE>
LISTING AND GENERAL INFORMATION
Application has been made to list the Offered Certificates on the Luxembourg
Stock Exchange. In connection with the listing application, the Certificate of
Incorporation and By-laws of the Transferor, as well as legal notice relating
to the issuance of the Certificates will be deposited prior to listing with the
Chief Registrar of the District Court of Luxembourg, where copies thereof may
be obtained upon request. Once the Certificates have been so listed, trading of
the Certificates may be effected on the Luxembourg Stock Exchange. The Class A
Certificates and the Class B Certificates have been accepted for clearance
through the facilities of DTC, CEDEL and Euroclear (ISIN number for the Class A
Certificates and for the Class B Certificates, ).
The transactions contemplated in this Prospectus were authorized by
resolutions adopted by the Transferor on , 1995.
Copies of the Pooling and Servicing Agreement, the Series 1995-1 Supplement,
the annual report of independent public accountants described in "Description
of the Certificates--Evidence as to Compliance" in the Prospectus, the
documents listed under "Available Information" and the reports to
Certificateholders referred to under "Reports to Certificateholders" and
"Description of the Certificates--Reports to Certificateholders" in the
Prospectus will be available at the office of the Listing Agent of the Trust in
Luxembourg, whose address is 80, place de la Gare 1616, Luxembourg. Financial
information regarding the Transferor is included in the consolidated financial
statements of Green Tree Financial Corporation in its Annual Report on Form 10-
K for the fiscal year ended December 31, 1994, also available at the office of
the Listing Agent in Luxembourg.
The Certificates, the Pooling and Servicing Agreement and the Series 1995-1
Supplement are governed by the laws of the State of Minnesota.
LEGAL MATTERS
The legality of the Offered Certificates will be passed upon for the
Transferor and Green Tree by Dorsey & Whitney P.L.L.P., Minneapolis, Minnesota.
The material federal income tax consequences of the Certificates will be passed
upon for the Transferor by Dorsey & Whitney P.L.L.P. Certain legal matters
relating to the Offered Certificates will be passed upon for the Underwriters
by Brown & Wood.
91
<PAGE>
GLOSSARY OF TERMS
<TABLE>
<CAPTION>
PAGE
DEFINED TERM NUMBER
- ------------ ------
<S> <C>
ABC Fixed/Floating Allocation Percentage................................. 58
ABC Investor Default Amount.............................................. 68
Accounts................................................................. 1
Accumulation Period Commencement Date.................................... 10
Accumulation Period Length............................................... 9
Accumulation Shortfall................................................... 11
Addition Date............................................................ 52
Additional Accounts...................................................... 34
Asset-Based Receivable Overconcentration................................. 60
Asset-Based Receivables.................................................. 29
Automatic Addition Condition............................................. 55
Available Series Interest Collections.................................... 64
Bankruptcy Code.......................................................... 81
Base Rate................................................................ 11
Benefit Plans............................................................ 88
Cash Equivalents......................................................... 57
Cede & Co................................................................ 42
Cedel.................................................................... 44
Cedel Participants....................................................... 44
Certificateholders....................................................... 2
Certificate Owners....................................................... 2
Certificate Rates........................................................ 8
Certificates............................................................. 1
CFD...................................................................... 29
Class A Certificate Rate................................................. 8
Class A Certificates..................................................... 1
Class A Fixed/Floating Allocation Percentage............................. 58
Class A Floating Allocation Percentage................................... 58
Class A Invested Amount.................................................. 58
Class A Investor Charge-Off.............................................. 19
Class A Monthly Interest................................................. 66
Class A Principal........................................................ 67
Class B Certificate Rate................................................. 8
Class B Certificates..................................................... 1
Class B Fixed/Floating Allocation Percentage............................. 58
Class B Floating Allocation Percentage................................... 58
Class B Invested Amount.................................................. 59
Class B Investor Charge-Off.............................................. 19
Class B Monthly Interest................................................. 66
Class B Principal........................................................ 67
Class C Certificateholders............................................... 1
Class C Certificates.....................................................
</TABLE>
<TABLE>
<CAPTION>
PAGE
DEFINED TERM NUMBER
- ------------ ------
<S> <C>
Class C Fixed/Floating Allocation Percentage............................. 58
Class C Floating Allocation Percentage................................... 58
Class C Invested Amount.................................................. 59
Class C Investor Charge-Off.............................................. 18
Class C Monthly Interest................................................. 66
Class C Principal........................................................ 68
Class D Certificate Rate................................................. 7
Class D Certificates..................................................... 1
Class D Fixed/Floating Allocation Percentage............................. 58
Class D Floating Allocation Percentage................................... 58
Class D Incremental Invested Amount...................................... 60
Class D Invested Amount.................................................. 59
Class D Investor Charge-Off.............................................. 18
Class D Investor Default Amount.......................................... 69
Class D Principal........................................................ 68
Code..................................................................... 22
Collateral Securities.................................................... 4
Collection Account....................................................... 56
Collections.............................................................. 5
Commission............................................................... 2
Companion Series......................................................... 69
Controlled Accumulation Period........................................... 9
Controlled Accumulation Period Length.................................... 48
Controlled Deposit Amount................................................ 10
Cooperative.............................................................. 44
Credit Counsel........................................................... 83
Dealer Overconcentration................................................. 60
Dealers.................................................................. 29
Defaulted Receivable..................................................... 68
Definitive Certificates.................................................. 45
Depositaries............................................................. 42
Depository............................................................... 41
Determination Date....................................................... 69
DHI Fees................................................................. 31
Discount Factor.......................................................... 5
Distribution Account..................................................... 56
Distribution Date........................................................ 8
DOL...................................................................... 88
DTC...................................................................... 2
Early Amortization Period................................................ 12
Eligible Accountants..................................................... 33
Eligible Portfolio....................................................... 34
Eligible Receivable...................................................... 33
ERISA.................................................................... 22
Euroclear................................................................ 44
Euroclear Operator....................................................... 44
</TABLE>
G-1
<PAGE>
<TABLE>
<CAPTION>
PAGE
DEFINED TERM NUMBER
- ------------ ------
<S> <C>
Euroclear Participants................................................... 44
Euroclear System......................................................... 44
Excess Funding Account................................................... 57
Excess Interest Collections.............................................. 68
Exchange................................................................. 8
Exchange Act............................................................. 2
Final Regulation......................................................... 88
Finance Charge Collection................................................ 5
Fixed/Floating Allocation Percentage..................................... 58
Floating Allocation Percentage........................................... 58
Floorplan Agreement...................................................... 30
Floorplan Receivables.................................................... 29
Foreign Person........................................................... 86
Green Tree............................................................... 1
Independent Directors.................................................... 29
Insolvency Laws.......................................................... 28
Interest Accrual Period.................................................. 8
Interest Collections..................................................... 49
Indirect Participants.................................................... 42
Ineligible Receivable.................................................... 52
Initial Principal Payment Date........................................... 9
Imputed Yield Collections................................................ 5
Insolvency Event......................................................... 73
Interest Accrual Period.................................................. 8
Interest Collections..................................................... 5
Interest Funding Account................................................. 56
Invested Amount.......................................................... 59
Investor Default Amount.................................................. 18
IRA...................................................................... 88
IRS...................................................................... 83
LIBOR.................................................................... 25
LIBOR Determination Date................................................. 46
Manufacturer............................................................. 30
Manufacturer Overconcentration........................................... 60
Monthly Payment Rate..................................................... 47
Monthly Servicing Fee.................................................... 73
MPR...................................................................... 40
Negative Carry Amount.................................................... 15
Net Receivables Rate..................................................... 46
New Issuance............................................................. 7
Offered Certificates..................................................... 1
OID...................................................................... 83
Overconcentration Amount................................................. 60
Participants............................................................. 42
Paying Agent............................................................. 57
Pay Out Event............................................................ 38
Period Length Determination Date......................................... 48
Pool Balance............................................................. 60
Principal Account........................................................ 10
Principal Collections.................................................... 5
</TABLE>
<TABLE>
<CAPTION>
PAGE
DEFINED TERM NUMBER
- ------------ ------
<S> <C>
Principal Funding Investment Shortfall................................... 11
Principal Investment Proceeds............................................ 11
Principal Shortfalls..................................................... 47
Principal Terms.......................................................... 51
Product Line Overconcentration........................................... 60
Purchase Agreement....................................................... 4
Qualified Institution.................................................... 56
Rating Agency............................................................ 22
Reallocated Class B Principal Collections................................ 62
Reallocated Class C Principal Collections................................ 61
Reallocated Class D Principal Collections................................ 61
Reallocated Principal Collections........................................ 62
Receivables.............................................................. 1
Recoveries............................................................... 4
Reference Banks.......................................................... 46
Removal Date............................................................. 56
Removal Notice........................................................... 56
Removed Accounts......................................................... 56
Required Amount.......................................................... 66
Revolving Period......................................................... 8
SAU...................................................................... 31
SAU/NSF.................................................................. 36
Securities Act........................................................... 2
Series Issuance Date..................................................... 52
Series 1995-1............................................................ 1
Series 1995-1 Termination Date........................................... 70
Servicer................................................................. 1
Servicer Default......................................................... 75
Service Transfer......................................................... 75
Shared Principal Collections............................................. 47
Supplement............................................................... 7
Supplemental Certificate................................................. 52
Terms and Conditions..................................................... 44
Transfer Agent and Registrar............................................. 45
Transfer Date............................................................ 52
Transfer Deposit Amount.................................................. 53
Transfer or Retained Class............................................... 26
Transferor............................................................... 1
Transferor Interest Collections.......................................... 11
Transferor Percentage.................................................... 41
Transferor Retained Class................................................ 12
Trust.................................................................... 1
Trust Portfolio.......................................................... 32
Trust Termination Date................................................... 71
Trustee.................................................................. 1
Underwriters............................................................. 1
Underwriting Agreement................................................... 1
U.S. Person.............................................................. A-4
</TABLE>
G-2
<PAGE>
ANNEX
GLOBAL CLEARANCE SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Floating Rate
Floorplan Receivable Trust Certificates, Series 1995-1 (the "Global
Securities") will be available only in book-entry form. Investors in the Global
Securities may hold such Global Securities through any of The Depository Trust
Company ("DTC"), CEDEL or Euroclear. The Global Securities will be tradeable as
home market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities through
CEDEL and Euroclear will be conducted in the ordinary way in accordance with
their normal rules and operating procedures and in accordance with conventional
eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedures applicable to U.S.
corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-
payment basis through the respective Depositaries of CEDEL and Euroclear (in
such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject to
U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, CEDEL and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to conventional credit card certificate
issues. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or Euroclear
accounts will follow the settlement procedures applicable to conventional
eurobonds, except that there will be no temporary global security and no "lock-
up" or restricted period. Global Securities will be credited to the securities
custody accounts on the settlement date against payment in the same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and Transferor's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to conventional
credit card certificate issues in same-day funds.
A-1
<PAGE>
Trading between CEDEL and/or Euroclear Participants. Secondary market trading
between CEDEL Participants or Euroclear Participants will be settled using the
procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC Transferor and CEDEL or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
accounts of a CEDEL Participant or a Euroclear Participant, the purchaser will
send instructions to CEDEL or Euroclear through a CEDEL Participant or
Euroclear Participant at least one business day prior to settlement. CEDEL or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date, on the basis of actual days elapsed
and a 360 day year. Payment will then be made by the respective Depositary to
the DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the CEDEL Participant's or Euroclear Participant's
account. The Global Securities credit will appear the next day (European time)
and the cash debit will be bad-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding day
when settlement occurred in New York). If settlement is not completed on the
intended value date (i.e., the trade fails), the CEDEL or Euroclear cash debit
will be valued instead as of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make available to
the respective clearing systems the funds necessary to process De-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within CEDEL or Euroclear. Under this approach,
they may take on credit exposure to CEDEL or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, CEDEL Participants or Euroclear Participants can elect not to preposition
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, CEDEL Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue form the value date. Therefore,
in many cases the investment income on the Global Securities earned during that
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each CEDEL Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of CEDEL Participants or Euroclear
Participants. The sale proceeds will be available to the DTC Transferor on the
settlement date. Thus, to the DTC Participants a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between CEDEL or Euroclear Transferor and DTC purchaser. Due to time
zone differences in their favor, CEDEL Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The Transferor will send
instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear
Participant at least one business day prior to settlement. In these cases,
CEDEL or Euroclear will instruct the respective Depositary, as appropriate, to
deliver the bonds to the DTC Participant's account against payment. Payment
will include interest accrued on the Global Securities from and including the
last coupon payment date to and excluding the settlement date on the basis of
actual days elapsed and a 360 day year. The payment will then be reflected in
the account of the CEDEL Participant or Euroclear Participant the following
day, and receipt of the cash proceeds in the CEDEL Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be
the
A-2
<PAGE>
preceding day, when settlement occurred in New York). Should the CEDEL
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debt in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on
the intended value date (i.e., the trade fails), receipt of the cash proceeds
in the CEDEL Participant's or Euroclear Participant's account would instead be
valued as of the actual settlement date.
Finally, day traders that use CEDEL or Euroclear and that purchase Global
Securities from DTC Participants for delivery to CEDEL Participants or
Euroclear Participants should note that these trades would automatically fail
on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
(a) borrowing through CEDEL or Euroclear for one day (until the purchase
side of the day trade is reflected in their CEDEL or Euroclear accounts) in
accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their CEDEL or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase form the DTC Participant is at least
one day prior to the value date for the sale to the CEDEL Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through CEDEL or
Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments
of interest (including original issue discount) on registered debt issued by
U.S. Persons, unless (i) each clearing system, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business in the chain of intermediaries between such beneficial owner
and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of Certificates
that are non-U.S. Persons can obtain a complete exemption from the withholding
tax by filing a signed Form W-8 (Certificate of Foreign Status) and a
certificate under penalties of perjury (the "Tax Certificate") that such
beneficial owner is (i) not a controlled foreign corporation (within the
meaning of Section 957(a) of the Code) that is related (within the meaning of
Section 864(d)(4) of the Code) to the Trust or the Transferor and (ii) not a 10
percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Trust or the Transferor. If the information shown on Form W-8 or the Tax
Certificate changes, a new Form W-8 or Tax Certificate, as the case may be,
must be filed within 30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form 4224).
A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch,
for which the interest income is effectively connected with its conduct of a
trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
Exemption or reduced rate for non-U.S. persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are Certificate Owners residing in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner
or his agent.
A-3
<PAGE>
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof or (iii) an estate or trust the
income of which is includible in gross income for United States tax purposes,
regardless of its source. This summary does not deal with all aspects of U.S.
Federal income tax withholding that may be relevant to foreign holders of the
Global Securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the Global
Securities.
A-4
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRANSFEROR OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN-
DER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF GREEN TREE FINANCIAL CORPORATION, GREEN TREE FLOORPLAN FUNDING
CORP. OR THE RECEIVABLES SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SO-
LICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Certificateholders.............................................. 2
Available Information...................................................... 2
Other Information.......................................................... 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 23
The Trust.................................................................. 28
The Transferor............................................................. 28
Green Tree Financial Corporation and its Commercial Finance Division....... 29
The Receivables............................................................ 32
The Accounts............................................................... 34
Maturity Considerations.................................................... 37
Use of Proceeds............................................................ 41
Description of the Offered Certificates.................................... 41
Description of the Purchase Agreement...................................... 78
Certain Legal Aspects of the Receivables................................... 80
Certain Federal Income Tax
Consequences.............................................................. 83
Employee Benefit Plan Considerations....................................... 88
Underwriting............................................................... 90
Listing and General Information............................................ 91
Legal Matters.............................................................. 91
Glossary of Terms.......................................................... G-1
Annex...................................................................... A-1
</TABLE>
---------------
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS EFFECTING TRANS-
ACTIONS IN THE OFFERED CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DIS-
TRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LOGO
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
$ FLOATING RATE
FLOORPLAN RECEIVABLE TRUST CERTIFICATES,
SERIES 1995-1, CLASS A
$ FLOATING RATE
FLOORPLAN RECEIVABLE TRUST CERTIFICATES,
SERIES 1995-1, CLASS B
GREEN TREE FLOORPLAN FUNDING CORP.
TRANSFEROR
GREEN TREE FINANCIAL CORPORATION
SERVICER
----------------------
PROSPECTUS
, 1995
----------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee............................................. $
Blue Sky fees and expenses....................................... 10,000.00
Accountant's fees and expenses................................... **
Attorney's fees and expenses..................................... 75,000.00*
Trustee's fees and expenses...................................... 15,000.00*
Printing and engraving expenses.................................. **
Rating Agency fees............................................... 150,000.00*
Miscellaneous.................................................... **
----------
Total.......................................................... $
==========
</TABLE>
- --------
* Estimated
**To be furnished by Amendment
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
<TABLE>
<C> <S>
1.1 Proposed form of Underwriting Agreement
3.1 Certificate of Incorporation of Green Tree Floorplan Funding Corp.
3.2 Bylaws of Green Tree Floorplan Funding Corp.
4.1 Form of Pooling and Servicing Agreement
4.2 Form of Series 1995-1 Supplement to the Pooling and Servicing
Agreement
4.3 Form of Receivables Purchase Agreement
5.1 Opinion and consent of Dorsey & Whitney P.L.L.P. as to legality
*8.1 Opinion of Dorsey & Whitney P.L.L.P. as to tax matters
23.1 Consent of Dorsey & Whitney P.L.L.P. (included as part of Exhibit 5.1)
**24.1 Power of attorney from officers and directors of the Registrants
signed by an attorney-in-fact
</TABLE>
--------
* To be furnished by Amendment.
**Previously filed.
(b) Financial Statements:
Not Applicable
II-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SAINT PAUL, STATE OF MINNESOTA ON NOVEMBER 7, 1995.
Green Tree Floorplan Funding Corp.
/s/ John W. Brink
By: _________________________________
JOHN W. BRINK
VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
Chairman of the November 7,
/s/ Lawrence M. Coss Board and President 1995
- ------------------------------------- (Principal
LAWRENCE M. COSS Executive Officer)
Vice President and November 7,
/s/ John W. Brink Treasurer 1995
- ------------------------------------- (Principal
JOHN W. BRINK Financial Officer
and Principal
Accounting Officer)
and Director
Director November 7,
/s/ Richard G. Evans 1995
- -------------------------------------
RICHARD G. EVANS
II-2
<PAGE>
INDEX TO EXHIBITS
Exhibit Form of
Number Description* Filing
- ------ ----------- ------
1.1 Proposed form of Underwriting Agreement Electronically Filed
3.1 Certificate of Incorporation of Green
Tree Floorplan Funding Corp. Electronically Filed
3.2 Bylaws of Green Tree Floorplan Funding
Corp. Electronically Filed
4.1 Form of Pooling and Servicing Agreement Electronically Filed
4.2 Form of Series 1995-1 Supplement to the
Pooling and Servicing Agreement Electronically Filed
4.3 Form of Receivables Purchase Agreement Electronically Filed
5.1 Opinion and consent of Dorsey & Whitney
P.L.L.P. as to legality Electronically Filed
*8.1 Opinion of Dorsey & Whitney P.L.L.P. as
to tax matters
23.1 Consent of Dorsey & Whitney P.L.L.P.
(included as part of Exhibit 5.1)
**24.1 Power of attorney from officers and directors
of the Registrant signed by an attorney-in-fact
- ----------
* To be furnished by Amendment.
** Previously filed.
<PAGE>
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class A
and
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class B
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
UNDERWRITING AGREEMENT
----------------------
November __, 1995
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
World Financial Center
North Tower
New York, New York 10281
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Dear Sirs:
Green Tree Floorplan Funding Corp. ("Funding") is a Delaware corporation
with its principal place of business in Saint Paul, Minnesota. Funding has
filed a Registration Statement relating to the issuance and sale of $___________
(Floating Rate) Floorplan Receivable Trust Certificates, Series 1995-1, Class A
and $___________ (Floating Rate) Floorplan Receivable Trust Certificates, Series
1995-1, Class B (the "Certificates") evidencing interests in Green Tree
Floorplan Receivables Master Trust (the "Trust"). The Certificates will be
issued pursuant to a pooling and servicing agreement (the "Pooling and Servicing
Agreement") dated as of ____________ 1, 1995 among Funding, as transferor, Green
Tree Financial Corporation, as servicer (the "Company" or the "Servicer"), and
________________________, as Trustee. The assets of the Trust will consist of
(i) all wholesale receivables (the "Receivables") generated from time to
<PAGE>
time in a portfolio of revolving financing arrangements between the Company and
certain manufactured housing dealers (the "Accounts") satisfying certain
criteria described in the Prospectus, (ii) all funds collected from Obligors in
respect of the Receivables, (iii) all right, title, and interest of Funding in,
to, and under a receivables purchase agreement between Funding, the Company and
the Trust, dated as of _____________, 1995 (the "Purchase Agreement"), (iv) the
benefit of funds on deposit in the Excess Funding Account, (v) Recoveries and
(vi) proceeds of the foregoing. The Receivables will be purchased from the
Company by Funding pursuant to the Purchase Agreement and thereafter transferred
to the Trust. The Company and Funding will be referred to collectively herein
as the "Green Tree Parties". The form of the Pooling and Servicing Agreement
has been filed as an exhibit to the Registration Statement (hereinafter
defined).
The Certificates are more fully described in a Registration Statement that
Funding has furnished to you. Capitalized terms used but not defined herein
shall have the meanings given to them in the Pooling and Servicing Agreement and
the Purchase Agreement (together, the "Designated Agreements"). The term "you"
as used herein, unless the context otherwise requires, shall mean you and such
persons as are named as co-managers in the Terms Agreement (defined below).
The offering of the Certificates pursuant to this Agreement will be made
through you or through an underwriting syndicate managed by you. The Green Tree
Parties will also enter into an agreement (the "Terms Agreement") providing for
the sale of such Certificates to, and the purchase and offering thereof by, you
and such other underwriters, if any, selected by you as have authorized you to
enter into such Terms Agreement on their behalf (the "Underwriters", which term
shall include you whether acting alone in the sale of Certificates or as a
member of an underwriting syndicate). The Terms Agreement shall specify, among
other things, the price or prices at which the Certificates are to be purchased
by the Underwriters from the Trust and the initial public offering price or
prices or the method by which the price or prices at which such Certificates are
to be sold will be determined. The Terms Agreement, which shall be
substantially in the form of Exhibit A hereto, may take the form of an exchange
of any standard form of written telecommunication between you and the Company.
The offering of the Certificates will be governed by this Agreement, as
supplemented by the Terms Agreement, and this Agreement and the Terms Agreement
shall inure to the benefit of and be binding upon the Underwriters participating
in the offering of such Certificates.
Funding has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 33-62433) and a related
preliminary prospectus for the
2
<PAGE>
registration of the Certificates under the Securities Act of 1933 (the "1933
Act"), and has filed, and proposes to file, such amendments thereto as may have
been required to the date hereof pursuant to the 1933 Act and the rules of the
Commission thereunder (the "Regulations"). Such registration statement, as
amended at the time when it became effective under the 1933 Act, and the
prospectus relating to the sale of Certificates constituting a part thereof, as
from time to time each is amended or supplemented pursuant to the 1933 Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively.
The Green Tree Parties understand that you propose to make a public
offering of the Certificates as soon as you deem advisable after this Agreement
and the Terms Agreement have been executed and delivered.
SECTION 1. Representations and Warranties. Each of the Green Tree Parties
represents and warrants to you as of the date hereof, and as of the date of the
Terms Agreement (in each case, the "Representation Date") as follows:
(a) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did, and as of the Representation
Date will, comply in all material respects with the requirements of the
1933 Act and the Regulations. The Registration Statement, at the time it
became effective did not, and as of the Representation Date will not,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, as amended or
supplemented at the time the Registration Statement became effective did
not, and as amended or supplemented as of the Representation Date will not,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in, or omissions from, the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to Funding in writing by you
expressly for use in the Registration Statement or Prospectus. There are
no contracts or documents of any Green Tree Party which are required to be
filed as exhibits to the Registration Statement pursuant to the 1933 Act or
the Regulations which have not been so filed or incorporated by reference.
(b) Each of the Green Tree Parties has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
state of incorporation, with corporate power and authority to own, lease
and operate
3
<PAGE>
its properties and conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement, the
Designated Agreements and the Terms Agreement as such Green Tree Party may
be a party to; and each of the Green Tree Parties is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which the ownership or lease of its properties or the
conduct of its business under the Designated Agreements requires such
qualification.
(c) Each of the Green Tree Parties is not in violation of its
certificate of incorporation or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease
or other instrument to which it is a party or by which it or its properties
may be bound, which default might result in any material adverse change in
the financial condition, earnings, affairs or business of any of the Green
Tree Parties or which might materially and adversely affect the properties
or assets thereof.
(d) The execution and delivery by the Green Tree Parties of this
Agreement and the Terms Agreement and the execution and delivery of the
Designated Agreements by a Green Tree Party are within the corporate power
of the related Green Tree Party and have been duly authorized by all
necessary corporate action on the part of the related Green Tree Party; and
neither the issuance and sale of the Certificates to the Underwriters, nor
the execution and delivery by the Green Tree Parties of this Agreement and
the Terms Agreement, nor the execution and delivery of the Designated
Documents by a Green Tree Party, nor the consummation by each of the Green
Tree Parties of any of the transactions therein contemplated, nor
compliance by any of the Green Tree Parties with the provisions hereof or
thereof, will materially conflict with or result in a material breach of,
or constitute a material default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on each of
the Green Tree Parties or its properties or the certificate of
incorporation or by-laws of each of the Green Tree Parties, or any of the
provisions of any indenture, mortgage, contract or other instrument to
which any Green Tree Party is a party or by which it is bound or result in
the creation or imposition of any lien, charge or encumbrance upon any of
its property pursuant to the terms of any such indenture, mortgage,
contract or other instrument.
(e) This Agreement has been, and the Terms Agreement when executed
and delivered as contemplated hereby and thereby will have been, duly
authorized, executed and
4
<PAGE>
delivered by the Green Tree Parties, and each constitutes, or will
constitute when so executed and delivered, a legal, valid and binding
instrument enforceable against the Green Tree Parties in accordance with
its terms, subject (i) to applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors rights
generally, (ii) as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law) and (iii) as to enforceability with respect to rights of indemnity
thereunder, to limitations of public policy under securities laws.
(f) The Designated Agreements when executed and delivered as
contemplated hereby and thereby will have been duly authorized, executed
and delivered by each Green Tree Party which is a party thereto, and will
constitute when so executed and delivered, a legal, valid and binding
instrument enforceable against any Green Tree Party which is a party
thereto in accordance with its terms, subject (i) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally and (ii) as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) As of the Closing Time (as defined below), the Certificates will
have been duly and validly authorized, and, when executed and authenticated
as specified in the Pooling and Servicing Agreement, will be validly issued
and outstanding and will be entitled to the benefits of the Pooling and
Servicing Agreement, and will be binding obligations of the Trust to the
extent provided in the Pooling and Servicing Agreement.
(h) No filing or registration with, notice to or consent, approval,
authorization or order of any court or governmental authority or agency is
required for the consummation by any of the Green Tree Parties of the
transactions contemplated by this Agreement, any of the Designated
Agreements or the Terms Agreement, except such as may be required under the
1933 Act, the Regulations, or state securities or Blue Sky laws.
(i) Each of the Green Tree Parties possesses all material licenses,
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it and as described in the Prospectus and has
received no notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
5
<PAGE>
ruling or finding, would materially and adversely affect the conduct of the
business, operations, financial condition or income of any of the Green
Tree Parties.
(j) None of the Green Tree Parties nor the Trust created by the
Pooling and Servicing Agreement will be subject to registration as an
"investment company" under the Investment Company Act of 1940, as amended
(the "1940 Act").
(k) The Certificates and the Designated Agreements conform in all
material respects to the descriptions thereof contained in the Prospectus.
(l) At the Closing Time, the Certificates shall have received the
certificate ratings specified in the Terms Agreement.
(m) At the Closing Time, each of the representations and warranties
of the Green Tree Parties set forth in any of the Transaction Documents
will be true and correct.
(n) As of the Closing Time, the Pooling and Servicing Agreement will
have been duly authorized, executed and delivered by, and will constitute a
legal, valid and binding obligation of, the Servicer, enforceable against
the Servicer in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and as to enforceability, to general
principles of equity (regardless whether enforcement is sought in a
proceeding in equity or at law).
SECTION 2. Purchase and Sale. The commitment of the Underwriters to
purchase the Certificates pursuant to the Terms Agreement shall be deemed to
have been made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Certificates to be
purchased by you shall be made at the office of Brown & Wood, One World Trade
Center, New York, New York 10048, or at such other place as shall be agreed upon
by you and the Green Tree Parties, at such time or date as shall be agreed upon
by you and the Green Tree Parties in the Terms Agreement (such time and date
being referred to as the "Closing Time"). Payment shall be made to the Trust,
in immediately available Federal funds wired to such bank as may be designated
by the Trust. The Certificates shall be in such denominations and registered in
such names as the Underwriters may request in writing at least two business days
prior to the Closing Time. The Certificates, which may be in temporary form,
will be made
6
<PAGE>
available for examination and packaging by you no later than 12:00 noon on the
first business day prior to the Closing Time.
SECTION 3. Covenants of the Green Tree Parties. The Green Tree Parties
covenant with you as follows:
(a) Immediately following the execution of this Agreement and the
Terms Agreement, the Green Tree Parties will prepare the Prospectus setting
forth the principal amount of the Certificates, the price at which the
Certificates are to be purchased by you, either the initial public offering
price or the method by which the price by which the Certificates are to be
sold will be determined, the selling concession(s) and reallowance(s), if
any, and such other information as you and the Green Tree Parties deem
appropriate in connection with the offering of the Certificates. Funding
will promptly transmit copies of the Prospectus to the Commission for
filing pursuant to Rule 424 under the 1933 Act and will furnish to you as
many copies of the Prospectus as you shall reasonably request.
(b) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Certificates by you or the
Underwriters, any event shall occur or condition exist as a result of which
it is necessary, in the opinion of your counsel, counsel for the Green Tree
Parties, or otherwise, to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of circumstances existing at the time it
is delivered to a purchaser, not misleading or if it shall be necessary, in
the opinion of any such counsel or otherwise, at any such time to amend or
supplement the Registration Statement or the Prospectus in order to comply
with the requirements of the 1933 Act or the Regulations thereunder, the
Green Tree Parties will promptly prepare, and Funding will (1) file with
the Commission such amendment or supplement as may be necessary to correct
such untrue statement or omission or to make the Registration Statement
comply with such requirements, and (2) within two business days will
furnish to you as many copies of the Prospectus, as so amended or
supplemented, as you shall reasonably request.
(c) The Green Tree Parties will give you reasonable notice of any
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to the 1933 Act
or otherwise (other than reports to be filed pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act")), and Funding will
furnish you with copies of any such amendment
7
<PAGE>
or supplement or other documents proposed to be filed a reasonable time in
advance of filing, and will not file any such amendment or supplement or
other documents in a form to which you or your counsel shall object.
(d) The Green Tree Parties will notify you immediately, and confirm
the notice in writing, (i) of the effectiveness of any amendment to the
Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Prospectus or any document,
other than reports to be filed pursuant to the 1934 Act, (iii) of the
receipt of any comments from the Commission with respect to the
Registration Statement or the Prospectus, (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (v) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or suspension of the
qualification of the Certificates or the initiation of any proceedings for
that purpose. The Green Tree Parties will make every reasonable effort to
prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(e) Funding will deliver to you as many signed and as many conformed
copies of the Registration Statement (as ordinarily filed) and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference in the
Prospectus) as you may reasonably request.
(f) The Green Tree Parties will endeavor, in cooperation with you, to
qualify the Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States
as you may designate, and will maintain or cause to be maintained such
qualifications in effect for as long as may be required for the
distribution of the Certificates. Funding will file or cause the filing of
such statements and reports as may be required by the laws of each
jurisdiction in which the Certificates have been qualified as above
provided.
SECTION 4. Conditions of Underwriter's Obligations. The obligations of
the Underwriters to purchase Certificates pursuant to the Terms Agreement are
subject to the accuracy of the representations and warranties on the part of the
Green Tree Parties herein contained, to the accuracy of the statements of the
Green Tree Parties' officers made pursuant hereto, to the performance by each of
the Green Tree Parties of all of its obligations hereunder and to the following
further conditions:
8
<PAGE>
(a) At the Closing Time (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued or proceedings therefor
initiated or threatened by the Commission, (ii) the Certificates shall have
received the ratings specified in the Terms Agreement, and (iii) there shall not
have come to your attention any facts that would cause you to believe that the
Prospectus, at the time it was required to be delivered to a purchaser of the
Certificates, contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at such time, not misleading.
(b) At or prior to the Closing Time you shall have received:
(1) The favorable opinion, dated as of the Closing Time, of Dorsey &
Whitney, special counsel and general counsel for the Green Tree Parties in form
and substance satisfactory to you and your counsel, to the effect that: (the
"Underwriter Opinion").
(i) Each of the Green Tree Parties has been duly organized
and is validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The execution and delivery by each of the Green Tree
Parties of this Agreement, the applicable Terms Agreement and the
Pooling and Servicing Agreement and the signing of the Registration
Statement by Funding are within the corporate power of the related
Green Tree Party and each has been duly authorized by all necessary
corporate action on the part of each of the Green Tree Parties.
(iii) This Agreement and the applicable Terms Agreement
have been duly authorized, executed and delivered by each of the Green
Tree Parties, and each is a valid and binding obligation of each of
the Green Tree Parties enforceable against the related Green Tree
Party in accordance with its terms, except that (A) such enforcement
may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' or secured parties' rights generally, (B) such
enforcement may be limited by general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good
faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether
enforcement is sought in a proceeding in equity or at law), and (C)
the enforceability as to rights to indemnity thereunder is subject to
the effect of
9
<PAGE>
federal and state securities laws and public policy relating thereto.
(iv) The Designated Agreements and the Registration
Statement have been duly authorized, executed and delivered by the
Green Tree Parties, and are the valid and binding obligations of the
Green Tree Parties enforceable against the related Green Tree Party in
accordance with its terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (B) such enforcement may be limited by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(v) None of the transfer of the Receivables to the Trust,
the issue and sale of the Certificates or the consummation of the
transactions contemplated herein nor the fulfillment of the terms
hereof will, to the best of such counsel's knowledge, conflict with or
constitute a breach of, or default under, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which any
of the Green Tree Parties is a party or by which it may be bound or to
which the property or assets of any of the Green Tree Parties are
subject (which contracts, indentures, mortgages, loan agreements,
notes, leases and other such instruments have been identified by any
of the Green Tree Parties to such counsel), nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of any of the Green Tree Parties or, to the
best of such counsel's knowledge, any order or regulation known to us
to be applicable to any of the Green Tree Parties of any state or
federal court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over any of the Green Tree
Parties.
(vi) The Certificates have been duly authorized and, when
executed and authenticated as specified in the Pooling and Servicing
Agreement and delivered and paid for pursuant to this Agreement and
the Terms Agreement, will be duly issued and entitled to the benefits
of the Pooling and Servicing Agreement.
(vii) The Pooling and Servicing Agreement creates a valid
security interest in favor of the Trustee in the Receivables and other
property included in the Trust on the date hereof, which security
interest of the Trustee in the Receivables and the Trust will be
10
<PAGE>
perfected and will constitute a first perfected security interest upon
the filing of Uniform Commercial Code ("UCC") financing statements in
the offices of the Secretary of State of Minnesota; provided, however,
that such counsel may take customary exceptions acceptable to you.
Such counsel need express no opinion (a) as to the continuation of a
security interest in the Receivables if the Trustee does not file
continuation statements as required by the Pooling and Servicing
Agreement or (b) as to the priority of any security interest in the
Receivables against any liens, claims or other interests that arise by
operation of law and do not require any filing or similar action in
order to take priority over perfected security interests.
(viii) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or
order of any Minnesota or federal court or governmental authority or
agency is required to be obtained by either of the Green Tree Parties
for the consummation by either of the Green Tree Parties of the
transactions contemplated by the Designated Agreements, except such as
may be required under the 1933 Act or the Regulations, or state
securities or Blue Sky laws.
(ix) The Registration Statement is effective under the 1933
Act and, to the best of such counsel's knowledge and information, no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(x) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended.
(xi) The conditions to the use by Funding of a registration
statement on Form S-1 under the 1933 Act have been satisfied with
respect to the Registration Statement and the Prospectus. To the best
of such counsel's knowledge, there are no contracts or documents of
Funding which are required to be filed as exhibits to the Registration
Statement pursuant to the 1933 Act or the Regulations thereunder which
have not been so filed or incorporated by reference.
(xii) The statements in the Prospectus under the heading
"Certain Federal Income Tax Consequences," to the extent that they
constitute statements of law or legal conclusions as to the likely
outcome of material
11
<PAGE>
issues under the federal income tax laws, have been prepared or
reviewed by such counsel and are correct in all material respects.
(xiii) The Trust created by the Pooling and Servicing Agreement
is not, and will not as a result of the offer and sale of the
Certificates as contemplated in the Prospectus and in this Agreement
become, an "investment company" or "under the control of an investment
company" as such terms are defined in the 1940 Act.
(xiv) The statements in the Prospectus under the caption
"Description of the Certificates," insofar as such statements purport
to summarize certain terms of the Certificates and the Pooling and
Servicing Agreement, constitute a fair and accurate summary of such
documents.
(xv) The Registration Statement and the Prospectus (other
than the financial statements and other financial, statistical and
numerical information included therein, as to which no opinion need be
rendered) as of their respective effective or issue dates, complied as
to form in all material respects with the requirements of the 1933 Act
and the Regulations thereunder.
(xvi) The execution, delivery and performance by the Green Tree
Parties of the Designated Agreements do not require the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of any federal, state or other
governmental agency or authority which has not previously been
effected.
(xvii) To such counsel's knowledge, there are no pending or
overtly threatened lawsuits or claims against either of the Green Tree
Parties or relating to the transactions contemplated by the
Underwriting Agreement and the Designated Agreements which, if
adversely determined, would have a material adverse effect on the
transactions contemplated by the Underwriting Agreement and the
Designated Agreements.
Such counsel shall deliver to you such additional opinions addressing the
transfer by the Company to Funding and the transfer by Funding to the Trust of
each of its right, title and interest in and to the Receivables and other
property included in the Trust on the Closing Time as may be required by each
Rating Agency rating the Certificates.
12
<PAGE>
Such counsel shall state that it has participated in conferences with
officers and other representatives of the Green Tree Parties, your counsel,
representatives of the independent accountants for the Green Tree Parties and
you at which the contents of the Registration Statement and the Prospectus were
discussed and, although such counsel is not passing upon and does not assume
responsibility for, the factual accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus (except as
stated in paragraphs (__) and (__) above) and has made no independent check or
verification thereof for the purpose of rendering this opinion, on the basis of
the foregoing (relying as to materiality to a large extent upon the certificates
of officers and other representatives of the Green Tree Parties), nothing has
come to their attention that leads such counsel to believe that the Registration
Statement, when it became effective, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Registration Statement and the Prospectus on the date of this Agreement and the
Terms Agreement contained, and the Prospectus on the date hereof contains, any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need express no view with respect to the financial statements, schedules
and other financial, statistical and numerical data included in or incorporated
by reference into the Registration Statement or the Prospectus.
Said counsel may state that they are admitted to practice only in the State
of Minnesota, that they are not admitted to the Bar in any other State and are
not experts in the law of any other State and to the extent that the foregoing
opinions concern the laws of any other State such counsel may rely upon the
opinion of counsel satisfactory to you and admitted to practice in such
jurisdiction. Any opinions relied upon by such counsel as aforesaid shall be
addressed to you and shall be delivered together with the opinion of such
counsel, which shall state that such counsel believes that their reliance
thereon is justified.
(2) The favorable opinion, dated as of the applicable Closing Time,
of Joel H. Gottesman, Senior Vice President and General Counsel to the
Company, as Servicer of the Receivables, in form and substance satisfactory
to you and your counsel, to the effect that:
(i) There are no pending or threatened litigation or
administrative proceeding of or before any court, tribunal or
governmental agency, authority or body or any arbitrator which, if
adversely
13
<PAGE>
determined, would have a material adverse effect on the financial
condition of the Company.
(ii) The Company is qualified to do business, and is in good
standing, as a foreign corporation in each U.S. jurisdiction in which
the character of the business owned or leased by it makes such
qualification necessary, except where the failure to be so qualified
would not have a material adverse effect on the financial condition of
the Company.
(3) The favorable opinion of counsel to the Trustee, dated as of the
Closing Time, addressed to you and in form and scope satisfactory to your
counsel, to the effect that:
(i) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and is enforceable
against the Trustee in accordance with its terms, subject to customary
and usual exceptions.
(ii) The Trustee has full power and authority to execute and
deliver the Pooling and Servicing Agreement and to perform its
obligations thereunder.
(iii) To the best of such counsel's knowledge, there are
no actions, proceedings or investigations pending or threatened
against or affecting the Trustee before or by any court, arbitrator,
administrative agency or other governmental authority which, if
adversely decided, would materially and adversely affect the ability
of the Trustee to carry out the transactions contemplated in the
Pooling and Servicing Agreement.
(iv) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body
of the jurisdiction of incorporation of the Trustee is required for
the execution, delivery or performance by the Trustee of the Pooling
and Servicing Agreement.
In rendering such opinion, such counsel may rely, as to
matters of fact, to the extent deemed proper and stated therein, on certificates
of responsible officers of the Trustee or public officials.
(4) The favorable opinion or opinions, dated as of the Closing Time,
of counsel for the Underwriters with respect to the issue and sale of the
Certificates, the Registration Statement, this Agreement, the Prospectus
and other related matters as you may require.
14
<PAGE>
(c) At the Closing Time you shall have received a certificate of the
President or a Vice President of each of the Green Tree Parties, dated as of
such Closing Time, to the effect that the representations and warranties of each
of the Green Tree Parties contained in Section 1 are true and correct with the
same force and effect as though such Closing Time were the Representation Date.
(d) You shall have received from ________________, or other independent
certified public accountants acceptable to you, a letter, dated as of this
Agreement and the Terms Agreement, or as soon thereafter as is practicable, and
as of the Closing Time, delivered at such times, in the form heretofore agreed
to.
(e) At the Closing Time you shall have received, addressed to you, any
additional opinions delivered by counsel pursuant to the request of the Rating
Agencies rating the Certificates.
(f) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they reasonably may require for
the purpose of enabling them to pass upon the issuance and sale of the
Certificates as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Green Tree Parties in connection with the issuance
and sale of the Certificates as herein contemplated shall be satisfactory in
form and substance to you and counsel for the Underwriters.
(g) As of the Closing Time, each of the Designated Agreements will have
been duly authorized, executed and delivered by, and will constitute a legal,
valid and binding obligation of, and will be enforceable against each of the
Green Tree Parties which is a party thereto, in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting creditors' rights generally and as to
enforceability, to general principles of equity (regardless whether enforcement
is sought in a proceeding in equity or at law).
(h) At the Closing Time, [Standard & Poor's Rating Services, a Division of
the McGraw-Hill Companies, Inc. will have delivered a letter to Funding stating
that the Certificates are rated "____" and Moody's Investor Service, Inc. will
have delivered a letter to Funding stating that the Certificates are rated
"____".]
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement and the Terms Agreement may
be terminated by you by notice to the Green Tree Parties at any time at or prior
to the
15
<PAGE>
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 5.
SECTION 5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
without limitation those related to (i) the filing of the Registration Statement
and all amendments thereto, (ii) the printing and delivery to the Underwriters,
in such quantities as you may reasonably request, of copies of this Agreement,
the Terms Agreement, any agreements among underwriters and selling agreements
and the Underwriters' questionnaires and powers of attorney, (iii) the
preparation, issuance and delivery of the Certificates to the Underwriters, (iv)
the fees and disbursements of the Green Tree Parties' counsel and accountants,
(v) the qualification of the Certificates under securities and Blue Sky laws and
the determination of the eligibility of the Certificates for investment in
accordance with the provisions of Section 3(g), including filing fees, and the
fees and disbursements of your counsel in connection therewith and in connection
with the preparation of any Blue Sky Survey and Legal Investment Survey, (vi)
the printing and delivery to the Underwriters, in such quantities as you may
reasonably request, hereinafter stated, of copies of the Registration Statement
and Prospectus and all amendments and supplements thereto, and of any Blue Sky
Survey and Legal Investment Survey, (vii) the printing and delivery to the
Underwriters, in such quantities as you may reasonably request, of copies of the
Pooling and Servicing Agreement, (viii) the fees charged by investment rating
agencies for rating the Certificates, (ix) the fees and expenses incurred in
connection with the listing of the Certificates on any national securities
exchange, (x) the fees and expenses, if any, incurred with respect to the
National Association of Securities Dealers, Inc., including the fees and
disbursements of counsel for you in connection therewith and (xi) the fees and
expenses of the Trustee and its counsel.
If this Agreement and the Terms Agreement is terminated by you in
accordance with the provisions of Section 4 or Section 9(i) hereof, the Company
shall reimburse you for all reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
SECTION 6. Indemnification. (a) Each of the Green Tree Parties agrees to
indemnify and hold harmless you and each person, if any, who controls you within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
16
<PAGE>
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information furnished to Funding by
the Underwriters expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, (A) if such settlement is effected with
the written consent of the Green Tree Parties or (B) if such settlement is
effected without the written consent of the Green Tree Parties more than 30 days
after receipt by the Green Tree Parties of a notice from the Underwriters,
substantially reflecting the proposed terms of such settlement, to which the
Green Tree Parties have not responded prior to the date such settlement is
effected; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by you), reasonably incurred in investigating,
preparing to defend or defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above, which expenses shall
be reimbursed as they are incurred.
This indemnity agreement will be in addition to any liability which either
of the Green Tree Parties may otherwise have. Insofar as this indemnity may
permit indemnification for liabilities under the 1933 Act of any person who is a
partner of the Underwriters entitled to indemnity hereby or who controls the
Underwriters within the meaning of Section 15 of the 1933 Act and who, at the
date of this Agreement is a director, officer or controlling person of either of
the Green Tree Parties, such indemnity agreement is subject to the undertaking
of either of the Green Tree Parties in the Registration Statement.
(b) Each Underwriter severally agrees to indemnify and hold harmless each
of the Green Tree Parties, each of the Green Tree Parties' directors, each of
Funding's officers who signed the
17
<PAGE>
Registration Statement, and each person, if any, who controls either of the
Green Tree Parties within the meaning of Section 15 of the 1933 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, but only with respect to untrue
statements or omissions or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to either of the Green Tree Parties by you expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto). This indemnity agreement will be in
addition to any liability that such Underwriter may otherwise have.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it with respect to which indemnity may be
sought hereunder but failure to so notify an indemnifying party shall not
relieve it from any liability that it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to local
counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Green Tree Parties
on the one hand, and the Underwriters, on the other, shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by either of the Green Tree
Parties and one or more of the Underwriters (i) in such proportion as shall be
appropriate to reflect the relative benefit received by the Underwriters, as
represented by the percentage that the Underwriting discount or discounts on the
cover of such Prospectus bears to the initial public offering price or prices as
set forth thereon, and the related Green Tree Party shall be responsible for the
balance; or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
benefit referred to in clause (i) above but also the relative fault of the Green
Tree Parties on the one hand and the Underwriters on the other with respect to
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations; provided, however, that no person guilty of fraudulent
18
<PAGE>
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation and, provided further, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price of the
Certificates purchased by such Underwriter pursuant to the Terms Agreement
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. For purposes of this Section, each person, if
any, who controls the Underwriters within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Underwriters and each
director of the Green Tree Parties, each officer of Funding who signed the
Registration Statement, and each person, if any, who controls either of the
Green Tree Parties within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as each of the Green Tree Parties.
SECTION 8. Representations, Warranties and Agreements to survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of Officers of any of the Green Tree Parties submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any termination of this Agreement, or any investigation made by or on behalf
of the Underwriters or controlling person thereof, or by or on behalf of any of
the Green Tree Parties and shall survive delivery of any Certificates to the
Underwriters.
SECTION 9. Termination of Agreement. This Agreement may be terminated for
any reason at any time by either the Green Tree Parties or you upon the giving
of thirty days' written notice of such termination to the other party hereto.
You, as Representative of the Underwriters named in the Terms Agreement, may
also terminate the Terms Agreement, immediately upon notice to the Green Tree
Parties, at any time at or prior to the Closing Time (i) if there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Registration Statement or Prospectus any change, or
any development involving a prospective change in, or affecting, the condition,
financial or otherwise, earnings, affairs or business of the Green Tree Parties
whether or not arising in the ordinary course of business, which in your
judgment would materially impair the market for, or the investment quality of,
the Certificates, or (ii) if there has occurred any outbreak of hostilities or
other calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in your judgment, impracticable to market
the Certificates or enforce contracts for the sale of the Certificates, or (iii)
if trading generally on either the New York Stock Exchange or the American Stock
Exchange has been
19
<PAGE>
suspended, or minimum or maximum prices for securities have been required, by
either of said exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal,
Minnesota or New York authorities. In the event of any such termination, (A)
the covenants set forth in Section 3 with respect to any offering of
Certificates shall remain in effect so long as the Underwriters own any such
Certificates purchased pursuant to the Terms Agreement and (B) the covenant set
forth in Section 3(c), the provisions of Section 5, the indemnity agreement set
forth in Section 6, and the contribution provisions set forth in Section 7, and
the provisions of Sections 8 and 13 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters participating in an offering of Certificates shall fail at the
Closing Time to purchase the Certificates which it or they are obligated to
purchase hereunder and under the Terms Agreement (the "Defaulted Certificates"),
then such of you as are named therein shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Certificates in such amounts as may be agreed upon and upon the
terms herein set forth. If, however, you have not completed such arrangements
within such 24-hour period, then:
(1) if the aggregate principal amount of Defaulted Certificates does
not exceed 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to such Terms Agreement, the non-defaulting Underwriters
named in such Terms Agreement shall be obligated to purchase the full
amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all such non-
defaulting Underwriters, or
(2) if the aggregate principal amount of Defaulted Certificates
exceeds 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to such Terms Agreement, the Terms Agreement shall
terminate, without any liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriters from liability with respect to any default of such Underwriters
under this Agreement and the Terms Agreement.
In the event of a default by any Underwriters as set forth in this Section,
either you, Funding or the Company shall have the right to postpone the Closing
Time for a period of time not exceeding seven days in order that any required
changes in the
20
<PAGE>
Registration Statement or Prospectus or in any other documents or arrangements
may be effected.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to you at the address set forth on the first page
hereof, attention of the Syndicate Department. Notices to Funding shall be
directed to Green Tree Floorplan Funding Corp., 1100 Landmark Towers, 345 St.
Peter Street, Saint Paul, Minnesota, 55102-1639, Attention of the Secretary,
with a copy to the Treasurer. Notices to the Company shall be directed to Green
Tree Financial Corporation, 1100 Landmark Towers, 345 St. Peter Street, Saint
Paul, Minnesota 55102-1639, attention of the Secretary, with a copy to the
Treasurer.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon you and each of the Green Tree Parties and the Terms Agreement
shall inure to the benefit of and be binding upon each of the Green Tree Parties
and any Underwriter who becomes a party to the Terms Agreement, and their
respective successors. Nothing expressed or mentioned in this Agreement or the
Terms Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto or thereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives any legal or
equitable right, remedy or claim under or with respect to this Agreement or the
Terms Agreement or any provision herein or therein contained. This Agreement
and the Terms Agreement and all conditions and provisions hereof or thereof are
intended to be for the sole and exclusive benefit of the parties and their
respective successors and said controlling persons and officers and directors
and their heirs and legal representatives (to the extent of their rights as
specified herein and therein) and for the benefit of no other person, firm or
corporation. No purchaser of Certificates from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement and the Terms
Agreement shall be governed by the laws of the State of New York. Specified
times of day refer to New York City time.
SECTION 14. Counterparts. This Agreement and the Terms Agreement may be
executed in counterparts, each of which shall constitute an original of any
party whose signature appears on it, and all of which shall together constitute
a single instrument.
21
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you and the
Company in accordance with its terms.
Very truly yours,
GREEN TREE FINANCIAL CORPORATION
By______________________________
Name:
Title:
GREEN TREE FLOORPLAN FUNDING CORP.
By______________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By___________________________
Name:
Title:
BEAR, STEARNS & CO. INC.
By___________________________
Name:
Title:
22
<PAGE>
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class A
and
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class B
EXHIBIT A
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FORM OF TERMS AGREEMENT
-----------------------
Dated: November __, 1995
To: Green Tree Financial Corporation, (the "Company"),
Green Tree Floorplan Funding Corp. ("Floorplan")
Re: Underwriting Agreement dated November ___, 1995
Series Designation:
- ------------------
Co-managers:
- -----------
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch")
Bear, Stearns & Co. Inc. ("Bear, Stearns")
Terms of the Certificates:
- -------------------------
Original
Principal Certificate Interest
Amount Rate
- --------- --------------------
A-1
<PAGE>
Certificate Ratings:
Servicer:
- --------
Green Tree Financial Corporation (in such capacity, the "Servicer")
Trust:
- -----
The Trust shall include (i) all wholesale receivables (the "Receivables")
generated from time to time in a portfolio of revolving financing arrangements
(the "Accounts") satisfying certain criteria described in the prospectus, (ii)
all funds collected from Obligors in respect of the Receivables, (iii) all
right, title and interest of Funding in, to, and under a purchase agreement
between Funding and the Trust, dated as of ________, 1995 (the "Purchase
Agreement"), (iv) the benefit of funds on deposit in the Excess Funding Account,
(v) Recoveries and (vi) proceeds of the foregoing.
Credit Enhancement:
- ------------------
Subordination of Class B, Class C and Class D Certificates.
Payment Dates:
- -------------
The 15th day (or if such day is not a business day, the next succeeding
business day) of each month commencing on _______ 15, 1995.
Purchase Price:
- --------------
Subject to the terms of the following paragraph, the purchase price
payable by the Underwriters for the Certificates is _________% of the principal
amount of the Certificates plus accrued interest, if any, at the Certificate
Interest Rate (____%) from _______ __, 1995.
Any allocation of the Certificates among Merrill Lynch and Bear, Stearns
will be governed by the Agreement Among Underwriters.
Underwriting Commission:
- -----------------------
Notwithstanding anything to the contrary in the Underwriting Agreement, no
additional underwriting commission shall be payable by the Company to the
Underwriters in connection with the purchase of the Certificates.
Public Offering price and/or method of determining price at which the
Underwriters will sell the Certificates:
Class A __________%
Class B __________%
A-2
<PAGE>
Closing Date and Location:
- -------------------------
On or about _______ ___, 1995, offices of Brown & Wood, One World Trade
Center, New York, New York.
A-3
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:__________________________________
Name:
Title:
BEAR, STEARNS & CO. INC.
By:__________________________________
Name:
Title:
ACCEPTED:
GREEN TREE FINANCIAL CORPORATION
By:_______________________________
Name:
Title:
GREEN TREE FLOORPLAN FUNDING CORP.
By:_______________________________
Name:
Title:
A-4
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
GREEN TREE FLOORPLAN FUNDING CORP.
Article I. Name. The name of the corporation is Green Tree Floorplan
Funding Corp. (the "Corporation").
Article II. Registered Office. The address of the Corporation's
registered office in the State of Delaware is Corporation Trust Center, 1209
Orange Street in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
Article III. Purpose. The purposes of the Corporation are:
(a) to acquire for cash, promissory notes, or other consideration from
time to time all right, title and interest in and to receivables arising
out of or relating to the financing of the consumer and commercial product
inventory or the accounts receivable of dealers in such products, secured
or unsecured revolving credit facilities to finance the inventory, accounts
receivable and other assets of dealers, manufacturers or distributors,
monies due thereunder, security interests in the products financed thereby,
proceeds from claims on insurance policies related thereto, any other
proceeds related thereto, and any other related rights (collectively,
"Receivables");
(b) to acquire, own, hold, service, sell, assign, pledge and otherwise
deal with the Receivables, collateral securing the Receivables, any related
insurance policies, agreements with originators or servicers of Receivables
and any proceeds or further rights associated with any of the foregoing;
(c) to transfer Receivables to one or more trusts (the "Trusts")
pursuant to one or more pooling and servicing agreements or other
agreements (the "Agreements") to be entered into by and among, among
others, the Corporation, the trustees named therein and any entities acting
as servicers of the Receivables;
(d) to authorize, sell, deliver to or acquire from the Trusts
certificates of one or more classes or series representing undivided
interests in the assets of the Trusts (collectively, the "Certificates") or
any other securities issued by the Trusts pursuant to the Agreements and to
sell and deliver any such Certificates or other securities;
(e) to enter into one or more indentures or other agreements
(collectively, the "Indentures") with the trustees named therein,
providing, among other things, for the issuance of the Notes referred to
below and the pledging of pools of Receivables or Certificates of any class
issued by one or more Trusts;
(f) to authorize, issue, sell and deliver one or more series and
classes of bonds, notes or other evidences of indebtedness secured or
collateralized by one or more pools of Receivables or by Certificates of
any class issued by one or more Trusts (collectively, the "Notes"),
provided that the Corporation shall have no liability under any Notes
except to the extent of the one or more pools of Receivables or
Certificates securing or collateralizing such Notes;
<PAGE>
(g) to hold, and to enjoy all of the rights and privileges of a holder
of, any Certificates issued by the Trusts to the Corporation under the
related Agreements and to hold and enjoy all of the rights and privileges
of any class of any series of Notes issued under the related Indentures,
including any class or series of Notes or Certificates that may be
subordinate to any other class or series of Notes or Certificates,
respectively;
(h) to enter into and perform its obligations under the Agreements,
any agreement providing for the acquisition of Receivables, any agreement
providing for the sale of any Certificates or Notes (including any sale of
Certificates or Notes through one or more underwriters or dealers), and any
agreement providing for the funding of any amount due under any
Certificates through direct borrowings, letters of credit, insurance, or
otherwise; and
(i) to engage in all such other activities and to exercise all such
other powers permitted to corporations under the laws of the State of
Delaware that are incidental to or connected with the foregoing business or
purposes or necessary or desirable to accomplish the foregoing.
Article IV. Duration. The Corporation is to have perpetual
existence.
Article V. Number of Shares. The aggregate number of shares of all
classes of capital stock that the Corporation shall have authority to issue is
one hundred (100) shares of Common Stock, par value of $0.01 per share.
Article VI. Repurchase of Shares. The Corporation, through its Board
of Directors, shall have the right and power to repurchase any of its
outstanding stock at such price and upon such terms as may be agreed upon
between the Corporation and the selling stockholder or stockholders.
Article VII. Incorporator. The name and mailing address of the
incorporator is as follows:
Name Mailing Address
---- ---------------
Charles F. Sawyer, Esq. 220 South Sixth Street
Minneapolis, Minnesota 55402
Article VIII. Number of Directors; Initial Directors. The number of
directors of the Corporation will not be less than three nor more than seven.
The exact number of directors is to be fixed in the Bylaws. The number of
directors constituting the initial Board of Directors is three, and the names
and addresses of the persons who are to serve as directors until the first
annual meeting of shareholders or until their respective successors are elected
and qualified are:
Name Address
---- -------
Lawrence M. Coss 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
John W. Brink 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
Richard G. Evans 1100 Landmark Towers
St. Paul, Minnesota 55101-1639
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<PAGE>
The list above setting forth the names and addresses of the initial directors of
the Corporation does not include additional persons who may otherwise be elected
and qualified to serve as directors in accordance with the Bylaws.
Article IX. Independent Directors. At all times as any Certificates
or Notes are outstanding, at least two directors of the Corporation shall be
Independent Directors. "Independent Director" shall mean a director of the
Corporation who shall at no time be, or have been, a director or officer of, be
employed by, or hold any beneficial economic interest in any Affiliate, and who
shall at no time hold any beneficial or economic interest in the Corporation.
"Affiliate" shall mean any entity other than the Corporation (i) which owns
beneficially, directly or indirectly, 10% or more of the outstanding shares of
Common Stock of the Corporation, or (ii) of which 10% or more of the outstanding
shares of its Common Stock is owned beneficially, directly or indirectly, by any
entity described in clause (i) above, or (iii) which is controlled by an entity
described in clause (i) above, as the term "control" is defined under Section
230.405 of the Rules and Regulations of the Securities and Exchange Commission,
17 C.F.R. Section 230.405.
Article X. Directors' Powers. With the consent in writing of the
Independent Directors (if any Independent Directors are then in office and
acting, or if Independent Directors are required to be in office and acting
pursuant to Article IX), the directors shall have power to make and to alter or
amend the Bylaws, to fix the amount to be reserved as working capital, and to
authorize and cause to be executed, mortgages and liens without limit as to the
amount, upon the property and franchise of this Corporation or to issue
guarantees on behalf of the Corporation.
With the consent in writing, and pursuant to a vote of the holders of
all of the capital stock issued and outstanding, the directors shall have
authority to dispose, in any manner, of the whole property of this Corporation.
The Bylaws shall determine whether and to what extent the accounts and
books of this Corporation, or any of them, shall be open to the inspection of
the stockholders; and no stockholder shall have any right of inspecting any
account, or book, or document of this Corporation, except as conferred by law or
the Bylaws or by resolution of the stockholders.
The stockholders and directors shall have power to hold their meetings
and keep the books, documents and papers of the Corporation outside the State of
Delaware, at such places as may be from time to time designated by the Bylaws or
by resolution of the stockholders or directors, except as otherwise required by
the laws of Delaware.
Article XI. Written Action by Directors. An action required or
permitted to be taken at a meeting of the Board of Directors of the Corporation
may be taken by written action signed, or counterparts of a written action
signed in the aggregate, by all of the directors.
Article XII. Reliance on Books and Records, Etc. A director shall,
in the performance of his or her duties, be fully protected in relying in good
faith upon the records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of the Corporation's
officers or employees, or committees of the Board of Directors, or by any other
person as to matters the director reasonably believes are within such other
person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
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<PAGE>
Article XIII. Liability of Directors. To the fullest extent
permitted by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended, a director of the Corporation shall not be
liable to the Corporation or its stockholders for monetary damages for a breach
of fiduciary duty as a director, except (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law or (iv) for any transaction from which the director derived an improper
personal benefit. Any repeal or modification of this Article XIII shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Article XIV. Internal Affairs. The Corporation will conduct its
affairs in accordance with the following provisions:
(a) the Corporation will establish an office through which its
business will be conducted, which office will be separate and apart from
that of any person or entity owning beneficially more than 50% of the
outstanding shares of Common Stock of the Corporation and will be separate
and apart from that of any of such owner's subsidiaries or affiliates other
than the Corporation;
(b) the Corporation will maintain separate corporate records and books
of account from those of such owner, subsidiaries and affiliates as are
referred to in (a);
(c) the Corporation's assets will not be commingled with those of any
other corporation; and
(d) The Corporation's Board of Directors will hold regular meetings,
not less frequently than once every calendar quarter, to review the actions
of the officers of the Corporation and to authorize and approve (i) all
transactions outside the ordinary course of the Corporation's business that
are incidental, necessary, suitable or convenient for the accomplishment of
the purposes set forth in Article III, and (ii) such other transactions,
agreements and actions of the Corporation as the Board of Directors deems
appropriate in connection with its review and supervision of the
Corporation's actions.
Article XV. Meetings of Stockholders. Meetings of stockholders shall
be held at such place, within or without the State of Delaware, as may be
designated by or in the manner provided in the Bylaws or, if not so designated
or provided, at the registered office of the Corporation in the State of
Delaware. Elections of directors need not be by ballot unless and except to the
extent that the Bylaws so provide. The books of the Corporation may be kept
(subject to any provision contained in any applicable statute) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the Bylaws of the Corporation.
Article XVI. Limitations on Actions. Notwithstanding any other
provision of the Certificate of Incorporation, Bylaws or any provision of law
that otherwise so empowers the Corporation, the Corporation shall not, without
(i) the affirmative vote of 100% of the members of the Board of Directors of the
Corporation, including the affirmative vote of the Independent Directors (if any
Independent Directors are then in office and acting, or if Independent Directors
are required to be in office and acting pursuant to Article IX):
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<PAGE>
(a) make an assignment for the benefit of creditors, file a petition
in bankruptcy, petition or apply to any tribunal for the appointment of a
custodian, receiver or any trustee for it or for a substantial part of its
property, commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereinafter in effect, consent
or acquiesce in the filing of any such petition, application, proceeding or
appointment of or taking possession by the custodian, receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Corporation or any substantial part of its property, or admit its inability
to pay its debts generally as they become due or authorize any of the
foregoing to be done or taken on behalf of the Corporation; provided, that
if there shall not be two Independent Directors then in office and acting,
a vote upon any matter set forth in this paragraph (a) of this Article XVI
shall not be taken unless and until two Independent Directors shall have
been appointed and qualified;
(b) amend, alter, change or repeal any of the following articles of
this Certificate of Incorporation: Article III, Article IX, Article XIV or
this Article XVI; or
(c) (i) engage in any business or activity other than as authorized
by Article III hereof, (ii) dissolve or liquidate, in whole or in part or
(iii) consolidate with or merge into any other entity or convey, transfer
or lease its properties and assets substantially as an entirety to any
entity, or permit any entity to merge into it or convey, transfer or lease
its properties and assets substantially as an entirety to it.
Article XVII. Amendment, Alteration or Repeal. The Corporation
reserves the right to amend, alter, or repeal any other provision contained in
this Certificate of Incorporation in the manner now or hereafter prescribed by
statute, and all rights of stockholders herein are subject to this reservation;
provided, however, that Article III, Article IX, Article XIV and Article XVI may
be amended only in accordance with Article XVI of this Certificate of
Incorporation.
I, the undersigned, being the sole incorporator hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, as amended, do make this certificate, hereby declaring
and certifying that this is my act and deed and that the facts herein stated are
true and that I have accordingly hereunto signed my signature this 13th day of
September, 1995.
/s/ Charles F. Sawyer
-----------------------------------------
Charles F. Sawyer
Sole Incorporator
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<PAGE>
BYLAWS
OF
GREEN TREE FLOORPLAN FUNDING CORP.
ARTICLE I.
----------
Meetings of Stockholders
------------------------
Section 1. Annual Meetings. The annual meeting of the stockholders
for the election of directors and for the transaction of such other business as
may properly come before the meeting shall be held each year at such time, on
such day and at such place, within or without the State of Delaware as shall be
designated by the Board of Directors.
Section 2. Special Meetings. A special meeting of the stockholders
for any purpose or purposes, unless otherwise prescribed by statute, may be
called at any time by the President or by the Secretary at the request in
writing of a majority of either the members of the Board of Directors or the
stockholders entitled to vote.
Section 3. Time and Place of Meetings. All meetings of the
stockholders shall be held at such times and places, within or without the State
of Delaware, as may from time to time be fixed by the Board of Directors or by
the President with respect to special meetings, or as shall be specified or
fixed in the respective notices or waivers of notice thereof.
Section 4. Notice of Meetings. Except as otherwise expressly
required by law, notice of each meeting of the stockholders shall be given, at
least fifteen (15) days in the case of an annual meeting, and ten (10) days in
the case of a special meeting, before the day on which the meeting is to be
held, to each stockholder of record entitled to vote at such meeting by mailing
such notice in a postage prepaid envelope addressed to the stockholder at the
stockholder's last post office address appearing on the stock records of the
Corporation. Except as otherwise expressly required by law, no publication of
any notice of a meeting of the stockholders shall be required. At special
meetings of stockholders no business other than that specified in the notice of
the meeting or germane thereto shall be transacted at such meeting. Except as
otherwise expressly required by law, notice of any adjourned meeting of the
stockholders need not be given. Notice of any meeting of stockholders may be
waived in writing by a majority of the stockholders entitled to vote thereat.
Section 5. Quorum. At each meeting of the stockholders, except as
otherwise expressly required by law, stockholders holding a majority of the
shares of
<PAGE>
stock of the Corporation, issued and outstanding, and entitled to be voted
thereat, shall be present in person or by proxy to constitute a quorum for the
transaction of business. In the absence of a quorum at any such meeting or any
adjournment or adjournments thereof, a majority in voting interest of those
present in person or by proxy and entitled to vote thereat, or in the absence
therefrom of all the stockholders, any officer entitled to preside at, or to act
as secretary of, such meeting may adjourn such meeting from time to time until
stockholders holding the amount of stock requisite for a quorum shall be present
or represented. At any such adjourned meeting at which a quorum may be present
any business may be transacted which might have been transacted at the meeting
as originally called.
Section 6. Organization. At each meeting of the stockholders, one of
the following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the President;
(b) the Vice President designated by the Board of Directors to act as
chairman of said meetings and to preside thereat;
(c) a stockholder of record of the Corporation who shall be chosen
chairman of such meeting by a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote
thereat.
The Secretary, or, if he shall be absent from such meeting, the person (who
shall be an Assistant Secretary, if an Assistant Secretary shall be present
thereat) whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
Section 7. Order of Business. The order of business at each meeting
of the stockholders shall be determined by the chairman of such meeting, but
such order of business at any meeting at which a quorum is present may be
changed by the vote of a majority in voting interest of those present in person
or by proxy at such meeting and entitled to vote thereat, provided that at
special meetings of stockholders no business other than that specified in the
notice of the meeting or germane thereto shall be transacted.
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<PAGE>
Section 8. Voting. Each stockholder shall, at each meeting of the
stockholders, be entitled to one vote in person or by proxy for each share of
stock of the Corporation held by the stockholder and registered in the
stockholder's name on the books of the Corporation on the date fixed or
determined pursuant to the provisions of Section 5 of Article V of these Bylaws
as the record date for the determination of stockholders who shall be entitled
to receive notice of and to vote at such meeting.
Shares of its own stock belonging to the Corporation shall not be
voted directly or indirectly. Any vote on stock of the Corporation may be given
at any meeting of the stockholders by the stockholder entitled thereto in person
or by the stockholder's proxy appointed by an instrument in writing delivered to
the Secretary or an Assistant Secretary of the Corporation or to the secretary
of the meeting. The attendance at any meeting of a stockholder who may
theretofore have given a proxy shall not have the effect of revoking the same
unless the stockholder shall in writing so notify the secretary of the meeting
prior to the voting of the proxy. At all meetings of the stockholders all
matters, except as otherwise provided in these Bylaws or by law, shall be
decided by the vote of a majority in voting interest of the stockholders present
in person or by proxy and entitled to vote thereat, a quorum being present.
Subject to Article II, Section 3, the vote at any meeting of the stockholders on
any question need not be by ballot, unless so directed by the chairman of the
meeting. On a vote by ballot each ballot shall be signed by the stockholder
voting, or by the stockholder's proxy, if there be such proxy.
Section 9. List of Stockholders. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger to prepare and make, at least ten (10) days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote thereat,
arranged in alphabetical order and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten (10) days
prior to said meeting either at a place within the city where said meeting is to
be held and which place shall be specified in the notice of said meeting, or, if
not so specified, at the place where said meeting is to be held, and such list
shall be produced and kept at the time and place of said meeting during the
whole time thereof, and may be inspected by any stockholder who is present. The
stock ledger shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger or such list or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
Section 10. Inspectors or Judges. The Board of Directors, in advance
of any meeting of stockholders, may appoint one or more inspectors or judges to
act at such meeting or any adjournment thereof. If the inspectors or judges
shall not be so appointed, or if any of them shall fail to appear or act, the
chairman of such
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<PAGE>
meeting shall appoint the inspectors or judges, or such replacement or
replacements therefor, as the case may be. Such inspectors or judges, before
entering on the discharge of their duties, shall take and sign an oath or
affirmation faithfully to execute the duties of inspectors or judges at meetings
for which they are appointed. At such meeting, the inspectors or judges shall
receive and take in charge the proxies and ballots and decide all questions
touching the qualification of voters and the validity of proxies and the
acceptance or rejection of votes. An inspector or judge need not be a
stockholder of the Corporation, and any officer of the Corporation may be an
inspector or judge on any question other than a vote for or against his election
to any position with the Corporation.
Section 11. Action Without a Meeting. Except as otherwise provided
by law or by the Certificate of Incorporation of the Corporation, any action
which may be taken at any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in writing.
ARTICLE II.
-----------
Board of Directors
------------------
Section 1. General Powers. Subject to the provisions of the
Certificate of Incorporation of the Corporation, the business, properties and
affairs of the Corporation shall be managed by the Board of Directors, which,
without limiting the generality of the foregoing, shall have power to elect and
appoint officers of the Corporation, to appoint and direct agents, to grant
general or limited authority to officers, employees and agents of the
Corporation, to make, execute and deliver contracts and other instruments and
documents in the name and on behalf of the Corporation and over its seal,
without specific authority in each case, and, by resolution adopted by a
majority of the whole Board of Directors, to appoint committees of the Board of
Directors, the membership of which may consist of one or more directors, and
which may, except as limited by the Certificate of Incorporation of the
Corporation, advise the Board of Directors with respect to any matters relating
to the conduct of the Corporation's business. In addition, the Board of
Directors may exercise all the powers of the Corporation and do all lawful acts
and things which are not reserved to the stockholders by law or by the
Certificate of Incorporation of the Corporation or by these Bylaws.
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<PAGE>
Section 2. Number and Term. Subject to the requirements of the
laws of the State of Delaware, the number of directors shall be no less than
three (3) and no more than seven (7). Subject to Article IX of the Certificate
of Incorporation of the Corporation, each of the directors of the Corporation
shall hold office until the expiration of his term and until his successor shall
be elected or until their earlier death, resignation, retirement,
disqualification or removal. Directors need not be stockholders.
Section 3. Election of Directors. Subject to the requirements of
Article IX of the Certificate of Incorporation of the Corporation, at each
meeting of the stockholders for the election of directors, at which a quorum is
present, the persons receiving the greatest number of votes, up to the number of
directors to be elected, shall be the directors. Such election shall be by
ballot, provided, however, a nomination shall be accepted and votes cast for a
nominee shall be counted by the inspectors or judges of the election, only if
the Secretary of the Corporation has received at least 24 hours prior to the
meeting a statement over the signature of the nominee that he consents to being
a nominee and, if elected, intends to serve as a director.
Section 4. Organization and Order of Business. At each meeting of
the Board, one of the following shall act as chairman of the meeting and preside
thereat, in the following order of precedence:
(a) the President;
(b) any Vice President designated by the Board of Directors; or
(c) any director chosen by a majority of the directors present
thereat.
The Secretary, or in case of his absence any Assistant Secretary (who shall be
present thereat) or the person (who shall be present thereat) whom the chairman
of such meeting shall appoint, shall act as secretary of such meeting and keep
the minutes thereof. The order of business at each meeting of the Board of
Directors shall be determined by the chairman of such meeting.
Section 5. Resignations. Subject to the requirements of Article IX
of the Certificate of Incorporation of the Corporation, any director may resign
at any time by giving written notice of his resignation to the President or the
Secretary of the Corporation. Any such resignation shall take effect at the time
specified therein, or, if the time when it shall become effective shall not be
specified therein, then it shall take effect when accepted by action of the
Board of Directors. Except as aforesaid, the acceptance of such resignation
shall not be necessary to make it effective.
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<PAGE>
Section 6. Vacancies, etc. Subject to the requirements of Article IX
of the Certificate of Incorporation of the Corporation, in case of any vacancy
on the Board, a director to fill the vacancy for the unexpired portion of the
term may be elected by the holders of shares of stock of the Corporation
entitled to vote in respect thereof at an annual or special meeting of said
holders or by a majority of the directors of the Corporation then in office
though less than a quorum.
Section 7. Removal. Subject to the requirements of Article IX of the
Certificate of Incorporation of the Corporation, any director or directors may
be removed either for or without cause at any time by the affirmative vote of
the holders of a majority of all the shares of stock outstanding and entitled to
vote, at a special meeting of the stockholders called for that purpose, and the
vacancies thus created may be filled, at the meeting held for the purpose of
removal, by the affirmative vote of a majority in interest of the stockholders
entitled to vote.
Section 8. Increase of Number. Subject to the requirements of
Article IX of the Certificate of Incorporation of the Corporation, the number of
directors may be increased by amendment of these Bylaws by the affirmative vote
of a majority of the directors, though less than a quorum, or, by the
affirmative vote of a majority in interest of the stockholders, at the annual
meeting or at a special meeting called for that purpose, and by like vote the
additional directors may be chosen at such meeting to hold office until the next
annual election and until their successors are elected and qualified.
Section 9. Place of Meeting. The Board may hold its meetings at such
place or places within or without the State of Delaware as the Board may from
time to time by resolution determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 10. First Meeting. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of organization, the
election of officers and the transaction of other business; provided that a
quorum of the whole Board of Directors and the Director or Directors elected
pursuant to Article IX of the Certificate of Incorporation of the Corporation
shall be present at such meeting. Such meeting shall be held at the time and
place theretofore fixed by the Board for the next regular meeting of the Board
and no notice thereof need be given; provided, however, that the Board may
determine that such meeting shall be held at a different place and time but
notice thereof shall be given in the manner hereinafter provided for special
meetings of the Board.
Section 11. Regular Meetings. Regular meetings of the Board shall be
held at such times as the Board shall from time to time determine. Notices of
regular meetings need not be given. If any day fixed for a regular meeting shall
be a legal holiday at the place where the meeting is to be held, then the
meeting which
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<PAGE>
would otherwise be held on that day shall be postponed until the same hour on
the same day of the next succeeding week in which such day shall not be a legal
holiday at such place, or at such other time and place as the Board shall
determine in which event notice thereof shall be given.
Section 12. Special Meetings: Notice. Special meetings of the Board
shall be held whenever called by the President or by one of the directors at the
time in office. The Secretary shall give notice to each director as hereinafter
in this Section provided of each such special meeting, in which shall be stated
the time and place of such meeting. Notice of each such meeting shall be mailed
to each director, addressed to the director at his residence or usual place of
business, at least ten (10) days before the day on which such meeting is to be
held, or shall be sent addressed to him at such place by facsimile, telegraph,
cable, wireless or other form of recorded communication, or be delivered
personally or by telephone not later than the day before the day on which such
meeting is to be held. Notice of any meeting of the Board need not, however, be
given to any director, if waived by him in writing or by facsimile, telegraph,
cable, wireless or other form of recorded communication, before, during or after
such meeting, or if he shall be present at such meeting, and any meeting of the
Board shall be a legal meeting without any notice thereof having been given if
all the directors of the Corporation then in office shall be present thereat.
Section 13. Quorum and Manner of Acting. Subject to the requirements
of the Certificate of Incorporation of the Corporation, and except as otherwise
provided in these Bylaws, the Certificate of Incorporation of the Corporation,
or by law, a majority of the members of the Board of Directors at the time in
office and the directors required by Article IX of the Certificate of
Incorporation of the Corporation shall be present in person at any meeting of
the Board of Directors in order to constitute a quorum for the transaction of
business at such meeting, and the affirmative vote of a majority of directors
present at any such meeting, at which a quorum is present, shall be necessary
for the adoption of any resolution or act of the Board. In the absence of a
quorum, a majority of the Board of Directors may adjourn any meeting, from time
to time, until a quorum is present. No notice of any adjourned meeting need be
given other than by announcement at the meeting that is being adjourned.
Section 14. Action by Consent. Unless otherwise restricted by the
Certificate of Incorporation, any action required or permitted to be taken at
any meeting of the Board of Directors, or of any committee thereof, may be taken
without a meeting, if prior to such action a written consent thereto is signed
by all members of the Board or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
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<PAGE>
Section 15. Committees. The Board of Directors may appoint standing
committees of its members. Unless otherwise restricted by the Certificate of
Incorporation of the Corporation, such committees shall have such powers as are
conferred by the Bylaws or authorized by the Board of Directors. The members of
all standing committees shall be appointed annually at the first meeting of the
Board of Directors after the annual meeting of the stockholders and shall
continue as members until their successors are appointed, subject to the power
of the Board to remove any member of a committee at any time and to appoint a
successor. At least one Independent Director, as defined in Article IX of the
Certificate of Incorporation, shall be a member of each such committee.
Section 16. Meeting by Communications Equipment. Members of the
Board of Directors or any committee appointed by the Board of Directors, may
participate in a meeting of the Board of Directors or of such committee by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
ARTICLE III.
------------
Officers
--------
Section 1. Election. Appointment. Term of Office. The Executive
Officers of the Corporation shall consist of a President and such number of Vice
Presidents, if any, as the Board of Directors may determine from time to time.
There shall also be a Treasurer, who may also be the President or a Vice
President. There shall also be a Secretary.
Any officer may hold two or more offices, the duties of which can be
consistently performed by the same person.
The Board of Directors may also elect such other officers and agents
as it may deem necessary, who shall have such authority and perform such duties
as may be prescribed by the Board.
All Executive Officers and other officers of the Corporation shall be
regularly elected by the majority vote of the whole Board of Directors at its
first meeting after the annual meeting of the stockholders and shall hold office
until the first meeting of the Board after the next annual meeting of the
stockholders, and until their successors are elected.
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<PAGE>
If additional officers are elected or appointed during the year
pursuant to Section 1 or Section 2 of this Article III, they shall hold office
until the next annual meeting of the Board of Directors at which officers are
regularly elected and until their successors are elected or appointed.
A vacancy in any office may be filled for the unexpired portion of the
term in the same manner as provided for election or appointment to such office
in Section 1 and Section 2 of this Article III.
All officers and agents elected or appointed by the Board of Directors
shall be subject to removal at any time by the Board of Directors, either for or
without cause, by an affirmative vote of a majority of the entire Board of
Directors, at any regular meeting or at any special meeting.
Section 2. President. The President shall be the chief executive
officer of the Corporation, and shall have the powers and perform the duties
incident to that position. Subject to the Board of Directors, he shall be in
general and active charge of the entire business and all the affairs of the
Corporation and shall be its chief policymaking officer. He shall have the
primary responsibility for continuing the separate status of the Corporation
from any affiliated corporation and the proper segregation of corporate assets
from the assets of third parties who may have possession of assets of the
Corporation. He shall have general authority to execute bonds, deeds and
contracts in the name and on behalf of the Corporation and responsibility for
the employment or appointment of such employees, agents and officers (subject to
subsequent election by the Board of Directors pursuant to Section 1 of this
Article III) as may be required to carry on the operations of the business, and
he shall have authority to fix the compensation of such agents and officers. He
shall have such other powers and perform such other duties as may be prescribed
by the Board of Directors or provided herein.
Section 3. Vice Presidents. Each Vice President shall have such
powers and duties as shall be prescribed by the Board of Directors at the time
of his election and such other powers and duties as may be assigned to him from
time to time by the President or the Board of Directors.
Section 4. Treasurer. The Treasurer shall be the chief financial
officer and principal accounting officer of the Corporation, and shall be
responsible for safeguarding the cash and securities of the Corporation and the
formulation of the investment and financial policies of the Corporation. He
shall keep a full and accurate account of all monies received and paid on
account of the corporation and shall render a statement of his accounts whenever
the Board of Directors shall require. He shall have such other powers and duties
as may be assigned to him by the President or the Board of Directors. In the
absence of the Treasurer, or such
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<PAGE>
person as shall be designated by the President to act in such capacity, the
President shall perform the duties of the Treasurer.
Section 5. Secretary. The Secretary shall attend to the giving of
notice of all meetings of stockholders and of the Board of Directors and
committees thereof, and as provided in Section 6 of Article I and Section 4 of
Article II, shall keep the minutes of all proceedings at meetings of the
stockholders and of the Board of Directors at which he is present, as well as of
all proceedings at all meetings of committees of the Board of Directors on which
he has served as secretary and, where some other person has served as secretary
thereto, the Secretary shall maintain custody of the minutes of such
proceedings. He shall perform such other duties as may be assigned to him from
time to time by the President or the Board of Directors.
ARTICLE IV.
-----------
Contracts, Checks, Drafts, Bank Accounts, Etc.
----------------------------------------------
Section 1. Execution of Documents by Officers. All of the Executive
Officers of the Corporation elected as provided in Section 1 of Article III of
the Bylaws, shall have power to execute and deliver any deeds, contracts,
mortgages, bonds, debentures and other documents for and in the name of the
Corporation.
All appointed officers shall have such powers with respect to
execution and delivery of deeds, contracts, mortgages, bonds, debentures and
other documents as may be assigned to them by the Board of Directors.
Section 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board of Directors, the President or the Treasurer shall
direct in such banks, trust companies or other depositories as the Board of
Directors may select or as may be selected by any officer or officers or agent
or agents of the Corporation to whom power in that respect shall have been
delegated by the Board of Directors. For the purpose of deposit and for the
purpose of collection for the account of the Corporation, checks, drafts and
other orders for the payment of money which are payable to the order of the
Corporation may be endorsed, assigned and delivered by any officer or agent of
the Corporation.
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<PAGE>
ARTICLE V.
----------
Shares and Their Transfer;
--------------------------
Examination of Books
--------------------
Section 1. Certificates for Stock. Every holder of stock of the
Corporation shall be entitled to have a certificate or certificates, in such
form as the Board shall prescribe, certifying the number of shares of stock of
the Corporation owned by the stockholder. The certificates representing shares
of such stock shall be numbered in the order in which they shall be issued and
shall be signed in the name of the Corporation by the person who was at the time
of signing the President or a Vice President and by the person who was at the
time of signing the Treasurer and its seal shall be affixed thereto; provided,
however, that the signature of such Executive Officer of the Corporation and of
such Treasurer and the seal of the Corporation may be facsimile. In case any
officer or officers of the Corporation who shall have signed, or whose facsimile
signature or signatures shall have been used on, any such certificate or
certificates shall cease to be such officer or officers, whether because of
death, resignation or otherwise, before such certificate or certificates shall
have been delivered by the Corporation such certificate or certificates may
nevertheless be adopted by the Corporation and be issued and delivered as though
the person or persons who signed such certificate or certificates, or whose
facsimile signature or signatures shall have been used thereon, had not ceased
to be such officer or officers. A record shall be kept of the respective names
of the persons, firms or corporations owning the stock represented by
certificates for stock of the Corporation, the number of shares represented by
such certificates, respectively, and the respective dates thereof, and in case
of cancellation, the respective dates of cancellation. Every certificate
surrendered to the Corporation for exchange or transfer shall be canceled and a
new certificate or certificates shall not be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled except
in cases provided for in Section 4 of this Article VI.
Section 2. Transfers of Stock. Transfers of shares of the stock of
the Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, or with
a transfer clerk or a transfer agent appointed as in Section 3 of this Article V
provided, and upon surrender of the certificate or certificates for such shares
properly endorsed and payment of all taxes thereon. The person in whose name
shares of stock stand on the books of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation.
Section 3. Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these Bylaws,
concerning the issue, transfer and registration of certificates for stock of the
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<PAGE>
Corporation. The Board may appoint or authorize any officer or officers to
appoint one or more transfer clerks, any of whom may be employees of the
Corporation, or one or more transfer agents and one or more registrars, and may
require all certificates for stock to bear the signature or signatures of any of
them; provided, however, that the signature of any transfer clerk, transfer
agent, or registrar may be facsimile. In case any transfer clerk, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such transfer clerk, transfer agent,
or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such transfer clerk, transfer
agent, or registrar at the date of issue.
Section 4. Lost, Stolen, Destroyed and Mutilated Certificates. The
owner of any stock of the Corporation shall immediately notify the Corporation
of any loss, theft, destruction or mutilation of the certificate therefor, and
the Corporation may issue a new certificate of stock in the place of any
certificate theretofore issued by the Corporation, which is delivered to the
Corporation, in the case of a mutilated certificate, or alleged to have been
lost, stolen or destroyed, and the Board may, in its discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representatives, to furnish evidence to the Corporation, which it shall in its
discretion determine is satisfactory, of the loss, theft or destruction of such
certificate and of the ownership thereof, and to give the Corporation a bond in
such sum, limited or unlimited, and in such form and with such surety or
sureties, as the Board shall in its uncontrolled discretion determine, to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss or destruction of any such certificate, or the
issuance of such new certificate.
Section 5. Record Date. To determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. If no record
date is fixed by the Board of Directors:
(a) The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business
on the day next preceding the day on which notice is given.
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<PAGE>
(b) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting unless the Board
of Directors shall fix a new record date for the adjourned meeting.
Section 6. Examination of Books by Stockholders. The Board may
determine, from time to time, whether and to what extent, at what times and
places, and under what conditions and regulations, the accounts and books of the
Corporation, or any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to inspect any account or
book or document of the Corporation, except as conferred by the laws of the
State of Delaware or as authorized by resolution adopted by the Board or by the
stockholders of the Corporation entitled to vote in respect thereof.
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<PAGE>
ARTICLE VI.
-----------
Offices, Etc.
-------------
Section 1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be in the City of Wilmington, County
of New Castle, and the name of the resident agent in charge thereof shall be The
Corporation Trust Corporation.
Section 2. Other Offices. The Corporation also may have an office or
offices other than said office in Section 1 of this Article VI at such place or
places, either within or without the State of Delaware, as provided in these
Bylaws or as the Board may from time to time appoint or as the business of the
Corporation may require.
Section 3. Books and Records. Except as otherwise required by law,
the Certificate of Incorporation or these Bylaws, the Corporation may keep the
books and records of the Corporation in such place or places within or without
the State of Delaware as the Board may from time to time by resolution determine
or the business of the Corporation may require.
ARTICLE VII.
------------
Dividends
---------
Subject to the provisions of law, of the Certificate of Incorporation
of the Corporation and of these Bylaws, the Board may declare and pay dividends
upon the shares of the stock of the Corporation either (a) out of its net assets
in excess of its capital as computed in accordance with the provisions of the
laws of the State of Delaware or (b) in case there shall be no such excess, out
of its net profits for the fiscal year then current and/or the preceding fiscal
year, whenever and in such amounts as, in the opinion of the Board, the
condition of the affairs of the Corporation shall render it advisable.
Dividends upon the shares of stock of the Corporation may be declared at any
regular meeting of the Board of Directors and also at a special meeting, if
notice of such proposed action is given as provided in Section 10 of Article II
of these Bylaws; provided, however, that the Corporation may declare and pay
dividends only in the event that the Board of Directors has determined in good
faith that the Corporation will be able to pay its debts in the ordinary course
of business after paying such dividends.
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<PAGE>
ARTICLE VIII.
-------------
Seal
----
The corporate seal, if one is adopted by the Board of Directors, shall
be in the form as prescribed by the Board of Directors and shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal" and
"Incorporated 1995 Delaware." If the Board of Directors adopts a corporate
seal, such seal or a facsimile thereof may be impressed or affixed or reproduced
or other use made thereof by the Secretary or any Assistant Secretary or any
other officer authorized by the Board.
ARTICLE IX.
-----------
Fiscal Year
-----------
The fiscal year of the Corporation shall end on the 31st day of
December in each year.
ARTICLE X.
----------
Waiver of Notices
-----------------
Whenever any notice whatever is required to be given pursuant to these
Bylaws or by the Certificate of Incorporation of the Corporation or by the
Delaware General Corporation Law, a waiver thereof in writing, signed by the
person or persons entitled to said notice, or by facsimile, telegraph, cable,
wireless or other form of recorded communication, whether before or after the
time stated therein, or if such person shall attend a meeting, except when that
person attends such meeting for the express purpose of objections at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, shall be deemed equivalent thereto. Neither
the business to be transacted at, nor the purpose of, any meeting need be
specified in any notice or written notice of waiver unless so required by the
Certificate of Incorporation of the Corporation or by these Bylaws.
ARTICLE XI.
-----------
Indemnification
---------------
Section 1. Coverage. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he is or was a director, officer or
agent of the Corporation
-15-
<PAGE>
(which term shall include any predecessor corporation of the Corporation) or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans ("indemnitee"), whether the basis of such proceeding is alleged action in
an official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in Section 2 of this Article XI with respect
to proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated by such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors. The right to indemnification conferred in
this Article XI shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such expenses incurred by a
director or officer in his capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made in advance of the final disposition of a proceeding only upon delivery to
the Corporation of an undertaking, by or on behalf of such indemnitee, to repay
all amounts so advanced if it ultimately be determined by final judicial
decision from which there is no further right to appeal that such indemnitee is
not entitled to be indemnified for such expenses under this Article XI or
otherwise. Expenses incurred by agents in defending in any action, suit or
proceeding, whether civil, criminal, administrative or investigative may be paid
by the Corporation upon such terms and conditions, if any, as the Board of
Directors deems appropriate.
Section 2. Claims. If a claim under Section 1 of this Article XI is
not paid in full by the Corporation within sixty (60) days after a written claim
has been received by the Corporation, except in the case of a claim for expenses
incurred in defending a proceeding in advance of its final disposition, in which
case the applicable period shall be twenty (20) days, the indemnitee may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim. If successful in whole or in part in any such suit or in a suit
brought by the
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<PAGE>
Corporation to recover payments by the Corporation of expenses incurred by an
indemnitee in defending in his capacity as a director or officer, a proceeding
in advance of its final disposition, the indemnitee shall be entitled to be paid
also for the expense of prosecuting or defending such claim. In any action
brought by the indemnitee to enforce a right to indemnification hereunder (other
than an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any, has been tendered to the Corporation) or by the Corporation to recover
payments by the Corporation of expenses incurred by an indemnitee in defending,
in his capacity as a director or officer, a proceeding in advance of its final
disposition, the burden of proving that the indemnitee is not entitled to be
indemnified under this Article XI or otherwise shall be on the Corporation.
Neither the failure of the Corporation (including the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the indemnitee
is proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including the Board of Directors,
independent legal counsel or its stockholders) that the indemnitee has not met
such applicable standard of conduct, shall be a presumption that the indemnitee
has not met the applicable standard of conduct, or in the case of such an action
brought by the indemnitee, be a defense to the action.
Section 3. Rights Not Exclusive. The rights conferred on any person
by Sections 1 and 2 of this Article XI shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute, the
Certificate of Incorporation of the Corporation, these Bylaws, and any
agreement, vote of stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
Section 5. Employees. Persons who are not included as indemnitees
under Section 1 of this Article XI but are employees of the Corporation or any
subsidiary may be indemnified to the extent authorized at any time or from time
to time by the Board of Directors.
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<PAGE>
ARTICLE XII.
------------
Miscellaneous
-------------
Section 1. Amendments. These Bylaws, as they shall be at any time,
may be amended, altered or repealed by the Board of Directors at any regular
meeting of the Board of Directors or at any special meeting if the proposed
amendment, alteration or repeal is stated in the notice of the special meeting;
provided that in no event shall any amendment, alteration or repeal of any Bylaw
in any manner impair, or impair the intent of, or be inconsistent with, the
Certificate of Incorporation of the Corporation.
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<PAGE>
Exhibit 4.1
===============================================================================
GREEN TREE FLOORPLAN FUNDING CORP.
Transferor
GREEN TREE FINANCIAL CORPORATION
Servicer
and
_____________________
Trustee
Green Tree Floorplan Receivables Master Trust
________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of ______________, 1995
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
Definitions
-----------
<S> <C> <C>
Section 1.1 Definitions................................................. 1-1
Section 1.2 Other Definitional Provisions............................... 1-23
Section 1.3 Provisions Relating to Rating Agencies...................... 1-24
ARTICLE II
Conveyance of Receivables;
-------------------------
Issuance of Certificates
------------------------
Section 2.1 Conveyance of Receivables................................... 2-1
Section 2.2 Acceptance by Trustee....................................... 2-3
Section 2.3 Representations and Warranties of the Transferor............ 2-3
Section 2.4 Representations and Warranties of the Transferor
Relating to the Agreement and the Receivables............... 2-6
Section 2.5 Covenants of the Transferor................................. 2-10
Section 2.6 Addition of Accounts........................................ 2-12
Section 2.7 Removal of Eligible Accounts................................ 2-14
Section 2.8 Removal of Ineligible Accounts.............................. 2-16
Section 2.9 Sale of Ineligible Receivables.............................. 2-17
ARTICLE III
Administration and Servicing of Receivables
-------------------------------------------
Section 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer.................................... 3-1
Section 3.2 Servicing Compensation...................................... 3-2
Section 3.3 Representations and Warranties of the Servicer.............. 3-3
Section 3.4 Reports and Records for the Trustee......................... 3-5
Section 3.5 Annual Servicer's Certificate............................... 3-7
Section 3.6 Annual Independent Accountants' Servicing Report............ 3-7
Section 3.7 Tax Treatment............................................... 3-8
Section 3.8 Adjustments................................................. 3-8
Section 3.9 Notices to Green Tree....................................... 3-9
ARTICLE IV
Rights of Certificateholders and Allocation
-------------------------------------------
and Application of Collections
------------------------------
Section 4.1 Rights of Certificateholders................................ 4-1
Section 4.2 Establishment of Accounts................................... 4-1
Section 4.3 Collections and Allocations................................. 4-4
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
ARTICLE V
<S> <C>
ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES............................... 5-1
ARTICLE VI
The Certificates
----------------
Section 6.1 The Certificates........................................... 6-1
Section 6.2 Authentication of Certificates............................. 6-1
Section 6.3 Registration of Transfer and Exchange of Certificates...... 6-2
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.......... 6-5
Section 6.5 Persons Deemed Owners...................................... 6-5
Section 6.6 Appointment of Paying Agent................................ 6-6
Section 6.7 Access to List of Certificateholders' Names and Addresses.. 6-7
Section 6.8 Authenticating Agent....................................... 6-8
Section 6.9 Tender of Exchangeable Transferor Certificate.............. 6-9
Section 6.10 Book-Entry Certificates.................................... 6-12
Section 6.11 Notices to Clearing Agency................................. 6-13
Section 6.12 Definitive Certificates.................................... 6-13
Section 6.13 Global Certificate; Euro-Certificate Exchange Date......... 6-14
Section 6.14 Meetings of Certificateholders............................. 6-14
ARTICLE VII
Other Matters Relating to the Transferor
----------------------------------------
Section 7.1 Liability of the Transferor................................ 7-1
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor...................... 7-1
Section 7.3 Limitation on Liability.................................... 7-2
Section 7.4 Liabilities................................................ 7-2
ARTICLE VIII
Other Matters Relating to the Servicer
--------------------------------------
Section 8.1 Liability of the Servicer.................................. 8-1
Section 8.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer........................ 8-1
Section 8.3 Limitation on Liability of the Servicer and Others......... 8-1
Section 8.4 Servicer Indemnification of the Transferor,
the Trust and the Trustee.................................. 8-2
Section 8.5 The Servicer Not to Resign................................. 8-3
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables...................... 8-3
Section 8.7 Delegation of Duties....................................... 8-4
</TABLE>
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<PAGE>
ARTICLE IX
Pay Out Events
--------------
Section 9.1 Pay Out Events........................................... 9-1
Section 9.2 Additional Rights Upon the Occurrence of Certain Events.. 9-1
ARTICLE X
Servicer Defaults
-----------------
Section 10.1 Servicer Defaults........................................ 10-1
Section 10.2 Trustee to Act; Appointment of Successor................. 10-3
Section 10.3 Notification to Certificateholders....................... 10-5
Section 10.4 Waiver of Past Defaults.................................. 10-5
ARTICLE XI
The Trustee
-----------
Section 11.1 Duties of Trustee........................................ 11-1
Section 11.2 Certain Matters Affecting the Trustee.................... 11-3
Section 11.3 Trustee Not Liable for Recitals in Certificates.......... 11-4
Section 11.4 Trustee May Own Certificates............................. 11-5
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses.......... 11-5
Section 11.6 Eligibility Requirements for Trustee..................... 11-5
Section 11.7 Resignation or Removal of Trustee........................ 11-6
Section 11.8 Successor Trustee........................................ 11-6
Section 11.9 Merger or Consolidation of Trustee....................... 11-7
Section 11.10 Appointment of Co-Trustee or Separate Trustee............ 11-7
Section 11.11 Tax Returns.............................................. 11-8
Section 11.12 Trustee May Enforce Claims Without
Possession of Certificates............................... 11-9
Section 11.13 Suits for Enforcement.................................... 11-9
Section 11.14 Rights of Certificateholders to Direct Trustee........... 11-9
Section 11.15 Representations and Warranties of Trustee................ 11-10
Section 11.16 Maintenance of Office or Agency.......................... 11-10
ARTICLE XII
Termination
-----------
Section 12.1 Termination of Trust..................................... 12-1
Section 12.2 Optional Termination..................................... 12-2
Section 12.3 Final Payment with Respect to any Series................. 12-3
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<PAGE>
Section 12.4 Termination Rights of Holder of
Exchangeable Transferor Certificate...................... 12-4
ARTICLE XIII
Miscellaneous Provisions
------------------------
Section 13.1 Amendment................................................ 13-1
Section 13.2 Protection of Right, Title and Interest to Trust......... 13-3
Section 13.3 Limitation on Rights of Certificateholders............... 13-4
Section 13.4 Governing Law............................................ 13-4
Section 13.5 Notices.................................................. 13-5
Section 13.6 Severability of Provisions............................... 13-5
Section 13.7 Assignment............................................... 13-5
Section 13.8 Certificates Non-Assessable and Fully Paid............... 13-5
Section 13.9 Further Assurances....................................... 13-6
Section 13.10 No Waiver; Cumulative Remedies........................... 13-6
Section 13.11 Counterparts............................................. 13-6
Section 13.12 Third-Party Beneficiaries................................ 13-6
Section 13.13 Actions by Certificateholders............................ 13-6
Section 13.14 Rule 144A Information.................................... 13-7
Section 13.15 Merger and Integration................................... 13-7
Section 13.16 Headings................................................. 13-7
EXHIBITS
- --------
Exhibit A Form of Exchangeable Transferor Certificate
Exhibit B Form of Daily Report
Exhibit C Form of Settlement Statement
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Opinion of Counsel
Exhibit F Form of Assignment of Receivables in Additional Accounts
Exhibit G Form of Reassignment of Receivables in Removed Accounts
Exhibit H Form of Agreed-Upon Procedures
Exhibit I Form of Reconveyance of Receivables by Trustee
SCHEDULES
- ---------
Schedule 1 List of Accounts
Schedule 2 Designation of Collection Account
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<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of ___________, 1995 by and among
GREEN TREE FLOORPLAN FUNDING CORP., a corporation organized and existing under
the laws of the State of Delaware, as Transferor, GREEN TREE FINANCIAL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware, as Servicer, and __________________, a banking corporation organized
and existing under the laws of the State of _________, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the
Certificateholders:
<PAGE>
ARTICLE I
DEFINITIONS
-----------
Section 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Account" shall mean each Initial Account and, from and after the related
Addition Date, each Additional Account. The term "Account" shall not apply to
any Removed Accounts reassigned or assigned to the Transferor or the Servicer in
accordance with the terms of this Agreement.
"Addition Date" shall have the meaning specified in Section 2.6(c).
"Addition Notice" shall have the meaning specified in Section 2.6(c).
"Additional Accounts" shall mean each individual revolving credit
arrangement established by Green Tree with a Dealer in connection with the
Floorplan Business or the Asset Based Lending Business, which account is
designated pursuant to Section 2.6(a) or (b) to be included as an Account and is
identified in the computer file or microfiche or written list delivered to the
Trustee by the Transferor pursuant to Sections 2.1 and 2.6(d).
"Additional Cut-Off Date" shall mean, with respect to Additional Accounts,
the day specified in the Addition Notice delivered with respect to such
Additional Accounts pursuant to Section 2.6(c).
"Adjustment Payment" shall have the meaning specified in subsection 3.8(a).
"Affiliate" means, with respect to a particular Person, any Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.
"Agent" shall mean, with respect to any Series, the Person so designated in
the related Supplement.
"Aggregate Invested Amount" shall mean, as of any date of determination,
the sum of the Invested Amounts of all Series of Certificates issued and
outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Collections,
Interest Collections Imputed Yield Collections and Defaulted Receivables, as the
case may be, shall mean, as of any date of determination, the sum of such
Investor Percentages of all Series of Certificates issued and outstanding on
such date of determination, provided, however, that the Aggregate Investor
Percentage shall not exceed 100%.
1-1
<PAGE>
"Aggregate Principal Receivables" shall mean, for any day, the aggregate
amount of Principal Receivables at the end of such day.
"Agreement" shall mean this Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series, the period
following the Revolving Period for such Series, which shall be the Amortization
Period, the Early Amortization Period, or other amortization or accumulation
period, in each case as defined with respect to such Series in the related
Supplement.
"Amortization Period Commencement Date" shall mean with respect to any
Series, the date on which the Amortization Period with respect thereto
commences.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in subsection 9.2(a).
"Asset Based Lending Business" shall mean the extensions of credit made by
Green Tree to Dealers in order to provide loans based on the value of certain
assets of such Dealer and secured by a first priority security interest in such
assets.
"Asset Based Financing Agreement" shall mean an asset based lending
financing agreement entered into by Green Tree and a Dealer in connection with
the Asset Based Business with such Dealer, as amended or modified from time to
time.
"Asset Based Receivable Overconcentration" on any Determination Date shall
mean the excess of (a) the aggregate of all amounts of Principal Receivables in
Accounts created pursuant to Asset Based Financing Agreements on the last day of
the Collection Period immediately preceding such Determination Date over (b) 15%
of the Pool Balance on the last day of such immediately preceding Collection
Period or, if the Rating Agency Condition is satisfied, such larger percentage
of such Pool Balance as is stated in the notice from each Rating Agency in
connection with the satisfaction of such Rating Agency Condition.
"Asset Based Receivables" shall mean Receivables arising from Asset Based
Lending Business.
"Assignment" shall have the meaning specified in Section 2.6(d).
"Authentication Agent" shall have the meaning specified in Section 6.8.
"Authorized Newspaper" shall mean a newspaper of general circulation in the
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
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"Automatic Addition Condition" shall mean, with respect to the addition of
Accounts pursuant to Section 2.6(c), that, as of the related Notice Date, (i)
during the calendar quarter in which such addition occurs, the number of new
Accounts for Dealers that are financing products of the type already being
financed by Green Tree and purchasing such products from Existing Manufacturers
does not exceed 5% of the number of all Accounts at the end of the preceding
calendar quarter, (ii) during the twelve months ending at the beginning of such
calendar quarter, the number of such new Accounts does not exceed 20% of the
number of all Accounts at the beginning of such twelve month period, (iii) the
average for the three months preceding the month of such addition of the
aggregate balance of Receivables that have been SAU or NSF for more than 30 days
does not exceed 1.25% of the Pool Balance at the end of the month preceding the
month of such addition, and (iv) the annualized average for such three month
period of the net losses incurred in respect of the Receivables does not exceed
1.75% of the Pool Balance at the end of the month preceding the month of such
addition.
"Bearer Certificates" shall have the meaning specified in Section 6.1.
"Bearer Rules" shall mean the provisions of the Internal Revenue Code, in
effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, proposed or
temporary regulations of the Internal Revenue Service.
"Beneficiary" shall mean any of the Holders of the Investor Certificates
and any Enhancement Provider.
"Book-Entry Certificates" shall mean certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.10;
provided, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer authorized and Definitive Certificates
are to be issued to the Certificate Owners, such certificates shall no longer be
"Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York or Delaware (or, with
respect to any Series, any additional city specified in the related Supplement)
are authorized or obligated by law or executive order to be closed, and such
other days in each year designated by the Servicer in writing to the Trustee by
the first day of December in the preceding year.
"Cash Equivalents" shall mean, unless otherwise provided in the Supplement
with respect to any Series, (a) negotiable instruments or securities represented
by instruments in bearer or registered form which evidence (i) obligations of or
fully guaranteed by the United States of America; (ii) time deposits, promissory
notes, or
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certificates of deposit of any depositary institution or trust
company; provided, however, that at the time of the Trust's investment or
contractual commitment to invest therein, the certificates of deposit or short-
term deposits of such depositary institution or trust company shall have a
credit rating from Standard & Poor's of A-1+ and from Moody's of P-1; (iii)
commercial paper having, at the time of the Trust's investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1+ and from
Moody's of P-1; (iv) bankers acceptances issued by any depositary institution or
trust company described in clause (a)(ii) above; and (v) investments in money
market funds rated AAA-m or AAA-mg by Standard & Poor's and Aaa by Moody's or
otherwise approved in writing by Moody's and Standard & Poor's; (b) time
deposits and demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause (a)(ii) above; (c)
securities not represented by an instrument that are registered in the name of
the Trustee or its nominee (which may not be Green Tree or an Affiliate) upon
books maintained for that purpose by or on behalf of the issuer thereof and
identified on books maintained for that purpose by the Trustee as held for the
benefit of the Trust or the Certificateholders, and consisting of (x) shares of
an open end diversified investment company which is registered under the
Investment Company Act which (i) invests its assets exclusively in obligations
of or guaranteed by the United States of America or any instrumentality or
agency thereof having in each instance a final maturity date of less than one
year from their date of purchase or other Cash Equivalents, (ii) seeks to
maintain a constant net asset value per share, (iii) has aggregate net assets of
not less than $100,000,000 on the date of purchase of such shares and (iv) which
the Rating Agency designates in writing will not result in a withdrawal or
downgrading of its then current rating of any Series rated by it or (y)
Eurodollar time deposits of a depository institution or trust company that are
rated A-1+ by Standard & Poor's and P-1 by Moody's; provided, however, that at
the time of the Trust's investment or contractual commitment to invest therein,
the Eurodollar deposits of such depositary institution or trust company shall
have a credit rating from Standard & Poor's of A-1+ and P-1 by Moody's; and (d)
any other investment if the Rating Agency confirms in writing that such
investment will not adversely affect its then current rating of the Investor
Certificates.
"CEDEL" shall mean Cedel S.A.
"Certificate" shall mean any one of the Investor Certificates of any Series
or the Exchangeable Transferor Certificate.
"Certificate Interest" shall mean interest payable in respect of the
Investor Certificates of any Series pursuant to Article IV of the Agreement as
supplemented by the Supplement for such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as may be
reflected on the books of the Clearing Agency, or on the books of a Person
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maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable in respect of the
Investor Certificates of any Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any Series of Certificates
(or, for any Series with more than one Class, for each Class of such Series),
the percentage (or formula on the basis of which such rate shall be determined)
stated in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Certificateholder's Interest" shall have the meaning specified in Section
4.1.
"Class" shall mean, with respect to any Series, any one of the classes of
Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of issuance
of such Series of Certificates, as specified in the related Supplement.
"Collateral Security" shall mean, with respect to any Receivable, (i) the
security interest, if any, granted by or on behalf of the related Dealer with
respect thereto, including, a first priority perfected security interest in the
related Products or assets, (ii) all other security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the agreement giving rise to such Receivable or
otherwise, together with all financing statements signed by a Dealer describing
any collateral securing such Receivable, (iii) all guarantees, insurance and
other agreements (including Floorplan Agreements and subordination agreements
with other lenders) or arrangements of whatever character from time to time
supporting or securing
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payment of such Receivable whether pursuant to the agreement giving rise to such
Receivable or otherwise, and (iv) all Records in respect of such Receivable.
"Collection Account" shall have the meaning specified in subsection 4.2(a).
"Collection Period" shall mean, with respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Collections" shall mean, without duplication, all payments by or on behalf
of Dealers received by the Servicer in respect of the Eligible Receivables
(including proceeds from the realization upon any Collateral Security), in the
form of cash, checks, wire transfers or any other form of payment.
"Corporate Trust Office" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Agreement is located at
__________.
"Coupon" shall have the meaning specified in Section 6.1.
"Cut-off Date" shall mean __________, 1995.
"Daily Report" shall mean a report in the form specified in subsection
1.2(e) as may be supplemented pursuant to any Supplement.
"Date of Processing" shall mean, with respect to any transaction, the date
on which such transaction is first recorded on the Servicer's computer file of
accounts (without regard to the effective date of such recordation).
"Dealer" shall mean a Person engaged generally in the business of
purchasing consumer or commercial products from a manufacturer or distributor
thereof and holding such Products for sale or lease in the ordinary course of
business or a Person engaged generally in the business of manufacturing or
distributing Products for sale to Dealers in the ordinary course of business.
"Dealer Overconcentration" on any Determination Date shall mean, with
respect to any Account with a Dealer, the excess of (a) the aggregate of all
amounts of Principal Receivables in such Account on the last day of the
Collection Period immediately preceding such Determination Date over (b) 3% of
the Pool Balance on the last day of such immediately preceding Collection Period
or, if the Rating Agency Condition is satisfied, such larger percentage of such
Pool Balance as is stated in the notice from each Rating Agency in connection
with the satisfaction of such Rating Agency Condition.
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"Default Amount" shall mean, on any Business Day, the product of (i) the
aggregate Outstanding Balances of Defaulted Receivables on such Business Day and
(ii) one minus the Discount Factor.
"Defaulted Receivable" shall mean each Eligible Receivable which, in
accordance with the Servicer's customary and usual servicing procedures, the
Servicer has charged off as uncollectible; a Receivable shall become a Defaulted
Receivable on the day on which such Receivable is recorded as charged off as
uncollectible on the Servicer's computer file. Notwithstanding any other
provision hereof, any Defaulted Receivables that are Ineligible Receivables
shall be treated as Ineligible Receivables rather than Defaulted Receivables.
"Defeasance Account" shall have the meaning specified in the applicable
Supplement.
"Definitive Certificate" shall have the meaning specified in Section 6.10.
"Depositary" shall have the meaning specified in Section 6.10.
"Depositary Agreement" shall mean, with respect to each Series, the
agreement among the Transferor, the Trustee and the Clearing Agency, or as
otherwise provided in the related Supplement.
"Designated Account" shall have the meaning specified in Section 2.8(b).
"Designated Balance" shall have the meaning specified in Section 2.8(b).
"Determination Date" with respect to any Distribution Date shall mean the
second Business Day prior to each Distribution Date.
"Discount Factor" shall mean ___%; provided, however, that such percentage
may be changed from time to time by the Transferor if such change will not cause
a Pay Out Event to occur and the Rating Agency has confirmed that the change
will not result in the Rating Agency reducing or withdrawing its original rating
on any then outstanding Series rated by it.
"Disposition" shall have the meaning specified in Section 9.2(a).
"Distribution Account" shall have the meaning specified in subsection
4.2(c).
"Distribution Date" shall mean, unless otherwise specified in any
Supplement for the related Series, the fifteenth day of each month or, if such
twentieth day is not a Business Day, the next succeeding Business Day.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
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"Eligible Account" shall mean each individual revolving credit arrangement
payable in U.S. dollars and established by Green Tree with a Dealer in the
ordinary course of business pursuant to a Financing Agreement, which
arrangement, as of the date of determination with respect thereto: (a) is in
favor of a Dealer (i) which is doing business in the United States of America
(including its territories and possessions) and (ii) which has not been
identified by the Servicer as being the subject of any voluntary or involuntary
bankruptcy proceeding or being in a voluntary or involuntary liquidation, (b) is
in existence and maintained and serviced by Green Tree and (c) is an Account in
respect of which no amounts have been charged off as uncollectible.
"Eligible Receivable" shall mean each Receivable:
(a) which was originated or acquired by Green Tree in the ordinary
course of business;
(b) which arose under an Eligible Account;
(c) which is owned by Green Tree at the time of sale by Green Tree to
the Transferor;
(d) which represents the obligation of a Dealer to repay an advance
made or to be made to or on behalf of such Dealer (i) to finance the
acquisition of Products or (ii) in connection with the Asset Based Lending
Business;
(e) which at the time of creation and, except at the Closing Date for
the initial Series in the case of Receivables in respect of which the
related financed Product has been sold, at the time of transfer to the
Trust is, secured by, inter alia, a first priority perfected security
interest in the related Product or assets; and the perfection of such
security interest is governed by the laws of one or more of the states of
the United States, the District of Columbia or, if the Rating Agency
Condition is satisfied, a territory or possession of the United States;
(f) which was created in compliance in all respects with all
Requirements of Law applicable thereto and pursuant to a Financing
Agreement which complies in all respects with all Requirements of Law
applicable thereto;
(g) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by Green Tree or the
Transferor in connection with the creation of such Receivable or the
transfer thereof to the Trust or the execution, delivery and performance by
Green Tree
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of the Financing Agreement pursuant to which such Receivable was
created, have been duly obtained, effected or given and are in full force
and effect;
(h) as to which at all times following the transfer of such Receivable
to the Trust, the Trust will have good and marketable title thereto free
and clear of all Liens arising prior to the transfer or arising at any time
other than Liens permitted by this Agreement, or the grant of a first
priority perfected security interest therein and in the related Collateral
Security (and in the proceeds thereof), securing all of the obligations of
the Transferor and the Servicer hereunder effective until the termination
of the Trust;
(i) which has been the subject of a valid transfer and assignment from
the Transferor to the Trust of all the Transferor's right, title and
interest therein and the related Collateral Security (including any
proceeds thereof);
(j) which will at all times be the legal, valid, binding and
assignable payment obligation of the Dealer relating thereto, enforceable
against such Dealer 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 in equity);
(k) which at the time of transfer to the Trust is not subject to any
valid claim of a right of rescission, setoff, counterclaim or any other
defense (including defenses arising out of violations of usury laws) of the
Dealer;
(l) as to which, at the time of transfer of such Receivable to the
Trust, Green Tree and the Transferor have satisfied all their respective
obligations with respect to such Receivable required to be satisfied at
such time (whether pursuant to the related Financing Agreement, the related
Floorplan Agreement or otherwise);
(m) as to which, at the time of transfer of such Receivable to the
Trust, neither Green Tree nor the Transferor has taken or failed to take
any action which would impair the rights of the Trust or the
Certificateholders therein;
(n) which constitutes "chattel paper," an "account" or a "general
intangible," and is not represented by an "instrument," each as defined in
Article 9 of the UCC as then in effect in the State of Minnesota;
(o) with respect to which the representations set forth in Sections
2.04(a)(i) and (ii) were correct as of the Transfer Date with respect
thereto; and
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(p) if such Receivable is originated under a Wholesale Financing
Agreement, the related Floorplan Agreement provides that the related
Manufacturer is obligated, subject to the specific terms of such Floorplan
Agreement (which may vary among Floorplan Agreements), to repurchase
Products that the Servicer repossesses upon a default by the related
Dealer.
"Enhancement" shall mean, with respect to any Series, any cash collateral
account, cash collateral guaranty, collateral invested amount, letter of credit,
guaranteed rate agreement, maturity guaranty facility, tax protection agreement,
interest rate cap, interest rate swap, subordination of the rights of one class
to another, or any other contract, agreement or arrangement for the benefit of
the Certificateholders of such Series (or Certificateholders of a Class within
such Series) as designated in the applicable Supplement.
"Enhancement Provider" shall mean, with respect to any Series, the Person,
if any, designated as such in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Euroclear Operator" shall mean Morgan Guaranty Trust Company of New York,
Brussels, Belgium office, as operator of the Euroclear System.
"Excess Funding Account" shall have the meaning specified in subsection
4.2(d).
"Exchange" shall mean either of the procedures described in Section 6.9(b).
"Exchangeable Transferor Certificate" shall mean the certificate executed
by the Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A and exchangeable as provided in Section 6.9; provided, that at any
time there shall be only one Exchangeable Transferor Certificate.
"Exchange Date" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in subsection 6.9(b).
"Exchange Notice" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in subsection 6.9(b).
"Existing Manufacturer" shall mean (i) each Manufacturer with which Green
Tree has entered into a business arrangement, either through a Floorplan
Agreement or any other arrangement, on or prior to the Closing Date for Series
1995-1 and (ii) each Manufacturer with which Green Tree enters into such a
business arrangement after the Closing Date for Series 1995-1 and as to which
the Rating Agency Condition is satisfied.
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"Extended Trust Termination Date" shall have the meaning specified in
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.
"Financing Agreement" shall mean any Wholesale Financing Agreement or Asset
Based Financing Agreement.
"Financing Guidelines" shall mean Green Tree's written policies and
procedures, as such policies and procedures may be amended from time to time,
(a) relating to the operation of its Floorplan Business and Asset Based Lending
Business, including the written policies and procedures for determining the
interest rate, if any, charged to Dealers, the other terms and conditions
relating to Green Tree's wholesale financing accounts, the creditworthiness of
Dealers and the extension of credit to Dealers, and (b) relating to the
maintenance of accounts and collection of receivables.
"Fixed/Floating Allocation Percentage" shall mean for a Series for any
Business Day or Distribution Date, as applicable, the percentage equivalent of a
fraction, the numerator of which is the Invested Amount of such Series at the
end of the Revolving Period of such Series and the denominator of which is the
greater of (a) the total amount of Principal Receivables in the Trust and
amounts on deposit in the Excess Funding Account as of the end of the preceding
Business Day and (b) the sum of the numerators used to calculate the allocation
percentages with respect to Principal Collections for all Series.
"Floating Allocation Percentage" shall mean for a Series on any Business
Day the sum of the percentage equivalents of fractions, the numerator of each of
which is the Invested Amount (or adjusted Invested Amount as specified in the
applicable Supplement) for each Class of such Series as of the end of the
preceding Business Day and the denominator of which is the greater of (a) the
sum of the amount of Principal Receivables in the Trust and the amount on
deposit in the Excess Funding Account as of the end of the preceding Business
Day and (b) with respect to Principal Collections only, the sum of the
numerators for all classes of all Series then outstanding used to calculate the
applicable allocation percentage.
"Floorplan Agreement" shall mean an agreement, entered into by Green Tree
and a Manufacturer, as amended or modified from time to time, pursuant to which
such Manufacturer agrees, among other matters, to repurchase from Green Tree,
Products sold by such Manufacturer to any of its Dealers and financed by Green
Tree under a Wholesale Financing Agreement if Green Tree acquires possession of
such Products because of a default by such Dealer under such Wholesale Financing
Agreement, voluntary surrender or other circumstances.
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"Floorplan Business" shall mean the extensions of credit made by Green Tree
to Dealers in order to finance Products purchased by Dealers from Manufacturers.
"Foreign Clearing Agency" shall mean CEDEL and the Euroclear Operator.
"Global Certificate" shall have the meaning specified in Section 6.13.
"Governmental Authority" shall mean the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Green Tree" shall mean Green Tree Financial Corporation, a corporation
organized and existing under the laws of the State of Delaware, and its
successors in interest.
"GTFFC" shall mean Green Tree Floorplan Funding Corp., a corporation
organized and existing under the laws of the State of Delaware, and its
successors in interest.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register, and if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Imputed Yield Collections" shall mean the sum of (A) the product of (x)
the aggregate amount of Collections (other than Recoveries) and (y) the Discount
Factor, (B) investment earnings on amounts on deposit in the Excess Funding
Account on such business day, (C) Recoveries and (D) collections on Receivables
which are not Eligible Receivables.
"Imputed Yield Receivables" shall mean the product of the aggregate unpaid
balance of the Eligible Receivables and the Discount Factor.
"Ineligible Account" shall mean an Account that at the time of
determination is not an Eligible Account.
"Ineligible Amount" on any Determination Date shall mean the amount of the
Ineligible Receivables included in the Trust on such Determination Date.
"Ineligible Receivable" means any Receivable that does not satisfy the
definition of Eligible Receivable.
"Initial Account" shall mean each individual revolving credit arrangement
established by Green Tree with a Dealer in connection with the Floorplan
Business or the Asset Based Lending Business which is identified in the computer
file or
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microfiche or written list delivered to the Trustee on the first Closing
Date by the Transferor pursuant to Section 2.1.
"Initial Closing Date" shall mean ___________, 1995.
"Initial Invested Amount" shall mean, with respect to any Series of
Certificates, the amount stated in the related Supplement.
"Insolvency Event" shall have the meaning specified in subsection 9.2(a).
"Insurance Proceeds" with respect to an Account shall mean any amounts
received by the Servicer pursuant to any policy of insurance which is required
to be paid to Green Tree pursuant to a Wholesale Financing Agreement or an Asset
Based Financing Agreement.
"Interest Collections" shall mean Collections of interest, all other non-
principal charges (including insurance service fees and handling fees) and
Discount Portions under the Receivables; provided that all Recoveries shall be
Non-Principal Collections.
"Interest Receivables" with respect to any Account shall mean all amounts
billed to the related Dealer in respect of interest and all other non-principal
charges.
"Interest Funding Account" shall have the meaning specified in subsection
4.2(b).
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Invested Amount" shall have, with respect to any Series of Certificates,
the meaning stated in the related Supplement.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended from time to time.
"Investor Account" shall mean each of the Interest Funding Account, any
Principal Account, the Excess Funding Account, any Distribution Account and any
Series Account.
"Investor Certificate" shall mean any one of the certificates (including,
without limitation, the Bearer Certificates or the Registered Certificates)
executed by the Transferor and authenticated by the Trustee substantially in the
form (or forms in the case of a Series with multiple classes) of the investor
certificate or variable funding certificate attached to the related Supplement.
"Investor Certificateholder" shall mean the Holder of an Investor
Certificate.
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"Investor Charge Off" shall have, with respect to each Series, the meaning
specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in subsection 6.9(b).
"Investor Percentage" shall mean, with respect to Principal Collections,
Imputed Yield Collections and Defaulted Receivables, and any Series of
Certificates, the Floating Allocation Percentage or the Fixed/Floating
Allocation Percentage, as applicable.
"Lien" shall mean any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), preference, participation interest, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of
any financing statement under the UCC or comparable law of any jurisdiction to
evidence any of the foregoing; provided, however, that (i) any assignment
permitted by Section 7.2, (ii) any Lien created by this Agreement or any
Supplement, or any Participation Agreement (iii) any security interests in the
Products that are subordinate to the security interests securing the related
Receivables and (iv) any inchoate lien that arises by operation of laws is not
delinquent or due and affects collateral securing a Receivable (but does not
encumber any Receivable) shall not be deemed to constitute a Lien.
"Manufacturer" shall mean a Person engaged generally in the business of
manufacturing or distributing Products for sale or lease to Dealers in the
ordinary course of business.
"Manufacturer Overconcentration" on any Determination Date shall mean, with
respect to all Accounts covered by a Floorplan Agreement with the same
Manufacturer as obligor, the excess of (a) the aggregate of all amounts of
Principal Receivables in such Accounts on the last day of the Collection Period
immediately preceding such Determination Date that are covered by a Floorplan
Agreement with such Manufacturer over (b) 20% of the Pool Balance on the last
day of such immediately preceding Collection Period or, if the Rating Agency
Condition is satisfied, such larger percentage of such Pool Balance as is stated
in the notice from each Rating Agency in connection with the satisfaction of
such Rating Agency Condition.
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"Minimum Aggregate Principal Receivables" shall mean, as of any date of
determination, an amount equal to the Initial Invested Amounts for all
outstanding Series on such date.
"Minimum Retained Interest" shall mean the product of the weighted average
Minimum Retained Percentages for all Series and the sum of the outstanding
principal amounts of all classes of all Series.
"Minimum Retained Percentage" shall mean the highest Minimum Retained
Percentage specified in any Supplement.
"Minimum Transferor Interest" shall mean, as of any date of determination,
the product of (i) the sum of (a) the aggregate Principal Receivables and (b)
the amounts on deposit in the Excess Funding Account and (ii) the highest
Minimum Transferor Percentage for any Series.
"Minimum Transferor Percentage" shall mean the highest Minimum Transferor
Percentage specified in any Supplement for an outstanding Series.
"Monthly Investor Servicing Fee" shall mean the Servicing Fee payable to
the Servicer with respect to a Monthly Period.
"Monthly Period" shall mean, unless otherwise defined with respect to a
Series in the related Supplement, the period from and including the first day of
each fiscal month of the Transferor to and including the last day of such fiscal
month.
"Moody's" shall mean Moody's Investors Service, Inc. or its successor.
"NSF" shall mean, with respect to a Receivable, that a check in payment of
such Receivable has been returned because of insufficient funds and has not
thereafter been paid.
"Obligor" shall mean a Person obligated to make payments with respect to a
Receivable pursuant to a Financing Agreement.
"Officer's Certificate" shall mean a certificate signed by any Vice
President, Treasurer, Assistant Treasurer or more senior officer of the
Transferor or Servicer and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
counsel for or an employee of Green Tree or the Transferor, and who shall be
reasonably acceptable to the Trustee.
"Outstanding Balance" shall mean, with respect to a Receivable on any day,
the aggregate amount owed by the Dealer thereunder as of the close of business
on the prior Business Day (net of returns and adjustments).
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"Participation Agreement" shall mean an agreement between Green Tree and a
lender (i) pursuant to which Green Tree conveys to such lender an undivided
interest in certain receivables that is pari passu in all respects (other than
nonsubordinated interest strips and fees) with the undivided interest retained
by Green Tree, and (ii) that satisfies the applicable requirements of the
Receivables Purchase Agreement.
"Participation Interest" shall mean the undivided interest, created
pursuant to a Participation Agreement, in a receivable in which a Receivable
represents the remaining undivided interest.
"Paying Agent" shall mean any paying agent appointed pursuant to Section
6.6 and shall initially be _________________.
"Pay Out Commencement Date" shall mean, with respect to each Series, the
date on which (a) a Trust Pay Out Event is deemed to occur pursuant to Section
9.1 or (b) a Series Pay Out Event is deemed to occur pursuant to the Supplement
for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay Out
Event or a Series Pay Out Event.
"Permitted Lien" shall mean with respect to the Receivables: (i) Liens in
favor of the Transferor created pursuant to the Purchase Agreement assigned to
the Trustee pursuant to this Agreement; (ii) Liens in favor of the Trustee
pursuant to this Agreement; and (iii) Liens which secure the payment of taxes,
assessments and governmental charges or levies, if such taxes are either (a) not
delinquent or (b) being contested in good faith by appropriate legal or
administrative proceedings and as to which adequate reserves in accordance with
generally accepted accounting principles shall have been established.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Pool Balance" shall mean, as of the time of determination thereof, (a) the
aggregate of Principal Receivables (without deducting therefrom the Discount
Portion) in the Trust at such time (other than all Ineligible Receivables),
multiplied by (b) 1 minus the Discount Factor.
"Principal Account" shall have the meaning specified in subsection 4.2(b).
"Principal Collections" shall mean, with respect to any Business Day, the
Collections received with respect to Principal Receivables on such Business Day,
other than Interest Collections.
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"Principal Receivables" with respect to an Account shall mean amounts shown
on the Servicer's records as Receivables(other than such amounts that represent
Imputed Yield Receivables, Defaulted Receivables or Interest payable by the
related Dealer).
"Principal Shortfalls" shall mean, with respect to any Business Day and any
outstanding Series, the amount which the related Supplement Specifies as the
"Principal Shortfall" for such Business Day.
"Principal Terms" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in subsection 6.9(c).
"Products" shall mean the commercial and consumer goods financed by Green
Tree for Dealers pursuant to a Wholesale Financing Agreement.
"Prospective Pay Out Event" shall have the meaning specified in subsection
2.3(n).
"Publication Date" shall have the meaning specified in subsection 9.2(a).
"Purchase Agreement" shall mean the receivables Purchase Agreement dated as
of _________, 1995 between the Transferor, as purchaser of such Receivables, and
Green Tree, governing the terms and conditions upon which the Transferor is
acquiring the initial Receivables transferred to the Trust on the Closing Date
and all Receivables acquired thereafter, as the same may from time to time be
amended, modified or otherwise supplemented.
"Purchase Price" shall mean, with respect to any Receivable for any date on
which such Receivable is to be purchased pursuant to Section 3.03, (a) an amount
equal to the amount payable by the Dealer in respect thereof as reflected in the
records of the Servicer as of the date of purchase plus (b) interest accrued (to
the extent interest accrues on such Receivable) from the end of the last
Collection Period in respect of which interest on such Receivable was billed by
the Servicer, at a per annum rate equal to the rate being charged to the Dealer
under the Wholesale Financing Agreement or Asset Based Financing Agreement, as
the case may be, based on the actual number of days elapsed over a year of 360
days.
"Qualified Institution" shall have the meaning specified in subsection
4.2(a).
"Rating Agency" shall mean, with respect to each Series, the rating agency
or agencies, if any, specified in the related Supplement.
"Rating Agency Condition" shall mean, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer and the Trustee
in
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writing that such action will not result in a reduction or withdrawal of the
rating of any outstanding Series or Class with respect to which it is a Rating
Agency.
"Reassignment Date" shall have the meaning specified in subsection 2.4(e).
"Receivables" shall mean, with respect to an Account, all amounts payable
(including interest, finance charges and other charges), and the obligation to
pay such amounts, by the related Dealer from time to time in respect of advances
made by Green Tree to or on behalf of such Dealer in connection with the
Floorplan Business or the Asset Based Lending Business, as the case may be,
together with the group of writings evidencing such amounts and the security
interest created in connection therewith and all of the rights, remedies, powers
and privileges thereunder (including under the related Financing Agreement);
provided that if a Participation Interest has been created in respect of such
Account, the amounts so payable by the related Dealer that are allocable to such
Participation Interest shall not be part of the "Receivables" in respect of such
Account. Receivables which become Defaulted Receivables will cease to be
included as Receivables on the day on which they become Defaulted Receivables.
Receivables which Green Tree is unable to transfer to the Transferor pursuant to
the Purchase Agreement or which the Transferor is unable to transfer to the
Trust as provided in Section 2.06(b) and Receivables which arise in Designated
Accounts from and after the related Removal Commencement Date shall not be
included in calculating the amount of Receivables.
"Record Date" shall mean, with respect to any Distribution Date, unless
otherwise specified in the applicable Supplement, the Business Day preceding
such Distribution Date, except that, with respect to any Definitive
Certificates, Record Date shall mean the fifth day of the then current Monthly
Period.
"Records" shall mean, with respect to any Receivable, all documents, books,
records and other information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and related property and
rights) relating to such Receivable and the related Dealer.
"Recoveries" shall mean any amounts received by the Servicer with respect
to Receivables that previously were charged off as uncollectible in accordance
with the Servicer's customary and usual servicing procedures.
"Reference Rate" shall mean the per annum rate of interest, if any,
designated from time to time by Green Tree, to a Wholesale Financing Agreement
or Asset Based Financing Agreement.
"Registered Certificates" shall have the meaning specified in Section 6.1.
"Related Person" shall mean a Person that is an Affiliate of Green Tree,
any Investor Certificateholder, any Enhancement Provider, or any Person whose
status
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would violate the conditions for a trustee contained in Section (4)(i) of
Rule 3a-7 under the Investment Company Act of 1940, as amended.
"Relevant UCC State" shall mean each jurisdictions in which the filing of a
UCC financing statement is necessary to perfect the ownership interest and
security interest of the Transferor pursuant to the Purchase Agreement or the
ownership or security interest of the Trustee established under this Agreement.
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and bylaws or other organizational or
governing documents of such Person, and any material law, treaty, rule or
regulation, or determination of an arbitrator or Governmental Authority, in each
case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local (including usury laws and the Federal
Truth in Lending Act).
"Responsible Officer" shall mean any officer within the Corporate Trust
Office (or any successor group of the Trustee), including the President, any
Vice President or any other officer of the Trustee customarily performing
functions similar to those performed by any person who at the time shall be an
above-designated officer and who shall have direct responsibility for the
administration of this Agreement.
"Retained Interest" shall mean, on any date of determination, the sum of
the Transferor Interest and the Invested Amount represented by any Transferor
Retained Certificate.
"Retained Percentage" shall mean, on any date of determination, the
percentage equivalent of a fraction the numerator of which is the Retained
Interest and the denominator of which is the aggregate amount of Principal
Receivables at the end of the day immediately prior to such date of
determination plus all amounts on deposit in the Excess Funding Account (but not
including investment earnings on such amounts).
"Revolving Period" shall have, with respect to each Series, the meaning
specified in the related Supplement.
"SAU" shall mean, with respect to a Receivable, that if such Receivable was
originally secured by a security interest in a Product, such Product has been
sold and such Receivable is not paid in full.
"Secured Obligations" shall have the meaning specified in Section 2.1.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
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"Series" shall mean any series of Investor Certificates, which may include
within any such Series a Class or Classes of Investor Certificates subordinate
to another such Class or Classes of Investor Certificates.
"Series Account" shall mean any account or accounts established pursuant to
a Supplement for the benefit of the related Series.
"Series Allocation Percentage" shall mean with respect to any Series, or
any date of determination, the percentage equivalent of a fraction the numerator
of which is the Invested Amount of such Series and the denominator of which is
the sum of the Invested Amounts of all Series then outstanding.
"Series Cut-Off Date" shall mean, with respect to any Series, the date
specified as such in the related Supplement.
"Series 1995-1" shall mean the series of Investor Certificates to be issued
and to be designated as "Series 1995-1."
"Series Pay Out Event" shall have, with respect to any Series, the meaning
specified in the related Supplement.
"Series Servicing Fee Percentage" shall mean, with respect to any Series,
the amount specified as such in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series of
Certificates, the date stated as such in the related Supplement.
"Servicer" shall mean initially Green Tree, in its capacity as Servicer
under this Agreement, and thereafter any Person appointed as successor as herein
provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 10.1.
"Servicing Fee" shall have the meaning specified in the related
Supplements.
"Servicing Officer" shall mean any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Trustee by the Servicer
as such list may from time to time be amended.
"Settlement Statement" shall mean a report in the form specified in
subsection 1.2(e) as may be supplemented pursuant to any Supplement.
"Shared Principal Collections" shall mean, with respect to any Business
Day, for all outstanding Series the aggregate amount of Principal Collections
which the
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related Supplements specify are to be treated as "Shared Principal
Collections" available to be allocated to other Series for such Business Day.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
Division of the McGraw-Hill Companies, Inc., or any successor thereto.
"Successor Servicer" shall have the meaning specified in subsection
10.2(a).
"Supplement" shall mean, with respect to any Series, a supplement to this
Agreement complying with the terms of Section 6.9 of this Agreement, executed in
conjunction with any issuance of Certificates of such Series (or, in the case of
the issuance of Certificates on the Initial Closing Date, the supplements
executed in connection with the issuance of such Certificates).
"Tax Opinion" shall mean, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income and Minnesota state income and franchise
tax purposes, (a) such action will not adversely affect the characterization of
the Investor Certificates of any outstanding Series or Class as debt, (b) such
action will not cause or constitute a taxable event with respect to any Investor
Certificateholders or the Trust and (c) in the case of Section 6.3(b), the
Investor Certificates of the new Series will be characterized as debt.
"Termination Notice" shall have, with respect to any Series, the meaning
specified in Section 10.1.
"Transfer" shall mean transfer, sell, exchange, pledge, hypothecate,
participate, or otherwise assign, in whole or in part.
"Transfer Agent and Registrar" shall have the meaning specified in Section
6.3 and shall initially be _____________.
"Transfer Date" shall mean, with respect to any Series, the Business Day
immediately prior to each Distribution Date.
"Transfer Deposit Amount" shall mean, with respect to any Receivable
reassigned or assigned to the Transferor or the Servicer, as applicable,
pursuant to Section 2.4(c) or Section 3.3, the amounts specified in such
Sections.
"Transferor" shall mean Green Tree Floorplan Funding Corp., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
"Transferor Exchange" shall have the meaning specified in subsection
6.9(b).
"Transferor Interest" shall mean, on any date of determination, the
aggregate amount of Principal Receivables at the end of the day immediately
prior to such
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date of determination plus all amounts on deposit in the Excess Funding Account
(but not including investment earnings on such amounts) at the end of such
immediately preceding day, minus the Aggregate Invested Amount at the end of
such immediately preceding day.
"Transferor Percentage" shall mean, on any date of determination, when used
with respect to Principal Collections, Interest Collections, Imputed Yield
Collections and Defaulted Receivables, a percentage equal to 100% minus the
Aggregate Investor Percentage with respect to such categories of Receivables.
"Transferor Retained Certificates" shall mean Investor Certificates of any
Series which the Transferor is required to retain pursuant to the terms of any
Supplement.
"Transferor Retained Class" shall mean any Class of Investor Certificates
of any Series which the Transferor retained pursuant to the terms of any
Supplement.
"Trigger Event" shall have the meaning specified in subsection 9.2(a).
"Trust" shall mean the Green Tree Floorplan Receivables Master Trust
created by this Agreement, the corpus of which shall consist of the Trust
Property.
"Trust Extension" shall have the meaning specified in subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect to each Series, the meaning
specified in Section 9.1.
"Trust Property" shall have the meaning assigned in Section 2.1.
"Trust Termination Date" shall mean the earliest to occur of (i) unless a
Trust Extension shall have occurred, the day after the Distribution Date with
respect to any Series following the date on which funds shall have been
deposited in the Distribution Account or the applicable Series Account for the
payment of Investor Certificateholders of each Series then issued and
outstanding sufficient to pay in full the Aggregate Invested Amount plus
interest accrued at the applicable Certificate Rate through the end of the day
prior to the Distribution Date with respect to each such Series and certain
other amounts as may be specified in any Series Supplement, (ii) if a Trust
Extension shall have occurred, the Extended Trust Termination Date, and (iii)
the date specified in Section 12.1.
"Trustee" shall mean ____________, a _______ banking corporation, and its
successors and any Person resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee
appointed as herein provided.
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"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
as in effect in the applicable jurisdiction.
"Undivided Interest" shall mean the undivided interest in the Trust
evidenced by an Investor Certificate.
"Wholesale Financing Agreement" shall mean a wholesale financing agreement
entered into by Green Tree and a Dealer in order to finance Products purchased
by such Dealer from a Manufacturer, as amended or modified from time to time.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein shall
control.
(c) The agreements, representations and warranties of Green Tree in this
Agreement and in any Supplement in its capacity as Servicer and of GTFFC in its
capacity as Transferor shall be deemed to be the agreements, representations and
warranties of Green Tree and GTFFC solely in each such capacity for so long as
either of them acts in each such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of this Agreement or
any Supplement; and Section, subsection, Schedule and Exhibit references
contained in this Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement or any Supplement
unless otherwise specified.
(e) The Daily Report and Settlement Statement shall be in substantially the
forms of Exhibits B and C, with such changes as the Servicer may determine to be
necessary or desirable; provided, however, that no such change shall serve to
exclude information required by this Agreement or any Supplement and each such
change shall be reasonably acceptable to the Trustee. The Servicer shall, upon
making such determination and receiving the consent of the Trustee to such
change, deliver to the Trustee and each Rating Agency an Officer's Certificate
to
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which shall be annexed the form of the related Exhibit, as so changed. Upon the
delivery of such Officer's Certificate to the Trustee, the related Exhibit, as
so changed, shall for all purposes of this Agreement constitute such Exhibit.
The Trustee may conclusively rely upon such Officer's Certificate in determining
whether the related Exhibit, as changed, conforms to the requirements of this
Agreement.
Section 1.3 Provisions Relating to Rating Agencies. Provisions in this
Agreement relating to Standard & Poor's or Moody's or a Rating Agency shall be
effective only so long as there is a Series of Investor Certificates outstanding
that has been rated by such Rating Agency at the request of the Transferor. By
way of illustration and not limitation of the foregoing, if no Series of
Investor Certificates then outstanding has been rated at the request of the
Transferor by Standard & Poor's, a notice required hereunder to be given to a
Rating Agency need not be given to Standard & Poor's and an Eligible Institution
need not have its debt or certificates of deposit rated by Standard & Poor's.
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ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. The Transferor does hereby
transfer, assign, set-over, and otherwise convey (i) to the Trust for the
benefit of the Certificateholders and the other Beneficiaries on the Initial
Closing Date, in the case of the Initial Accounts, and on the applicable
Addition Date, in the case of Additional Accounts, (except as expressly provided
herein), (i) all of its right, title and interest in, to and under the
Receivables in each Account and all Collateral Security with respect thereto
owned by the Transferor at the close of business on the Initial Cut-off Date, in
the case of Initial Accounts, and on the applicable Additional Cut-off Date, in
the case of Additional Accounts, and all monies due or to become due and all
amounts received with respect thereto and all proceeds (including proceeds as
defined in Section 9-306 of the UCC as in effect in the State of Minnesota and
Recoveries) thereof, (ii) all of the Transferor's rights, remedies, powers and
privileges with respect to such Receivables, and the Receivables conveyed to the
Trust in the next sentence, under the related Floorplan Agreements, if any, and
(iii) all of the Transferor's rights, remedies, powers and privileges with
respect to such Receivables under the Purchase Agreement, (iv) all proceeds of
the foregoing. As of each Business Day prior to the earlier of (i) the
occurrence of a Pay Out Event specified in Section 9.01(b), (c), (d) or (e) and
(ii) the Trust Termination Date, on which Receivables are created in the
Accounts (a "Transfer Date"), the Transferor does hereby sell, transfer, assign,
set over and otherwise convey, without recourse (except as expressly provided
herein), to the Trust for the benefit of the Certificateholders and the other
Beneficiaries, all of its right, title and interest in, to and under the
Receivables in each Account (other than any Receivables created in any
Designated Account from and after the applicable Removal Date) and all
Collateral Security with respect thereto owned by the Transferor at the close of
business on such Transfer Date and not theretofore conveyed to the Trust, all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof. The foregoing sale,
transfer, assignment, set-over and conveyance and any subsequent sales,
transfers, assignments, set-overs and conveyances do not constitute, and are not
intended to result in, the creation or an assumption by the Trust, the Trustee,
any Agent or any Beneficiary of any obligation of the Servicer, Green Tree, the
Transferor, or any other Person in connection with the Accounts, the Receivables
or any Participation Interest or under any agreement or instrument relating
thereto (including any Participation Agreement), including any obligation to any
Dealers, Manufacturers, or owners of a Participation Agreement and Green Tree
(and not any of the other foregoing Persons) shall continue to perform and be
responsible for their respective obligations under the Financing Agreements,
Floorplan Agreements, Participation Agreements and any related agreements and
arrangements. The foregoing transfer, assignment, setover and conveyance to the
Trust, and any subsequent transfer,
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assignment, setover and conveyance to the Trust, shall be made to the Trustee,
on behalf of the Trust, and each reference in this Agreement or any Supplement
to any such transfer, assignment, setover and conveyance shall be construed
accordingly.
In connection with such sales, the Transferor agrees to record and file, at
its own expense, a financing statement on form UCC-1 (and Transferor's or Green
Tree's continuation statements when applicable) with respect to the Receivables
now existing and hereafter created for the sale of chattel paper, accounts and
general intangibles (as defined in Section 9-105 of the UCC as in effect in any
state where the Transferor's or Green Tree's chief executive offices or books
and records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the other Trust Assets
to the Trust, and to deliver a file-stamped copy of such financing statements or
other evidence of such filing (which, for purposes of this Section 2.1, consist
of facsimile confirmation of such filing) to the Trustee on or prior to the
first Closing Date, in the case of the Initial Accounts, and (if any additional
filing is so necessary) the applicable Addition Date, in the case of Additional
Accounts. The Trustee shall be under no obligation whatsoever to file such
financing statement, or a continuation statement to such financing statement, or
to make any other filing under the UCC in connection with such sales.
In connection with such sales, the Transferor further agrees, at its; own
expense, on or prior to the Initial Closing Date, in the case of the Initial
Accounts, the applicable Addition Date, in the case of Additional Accounts, and
the applicable Removal Commencement Date, in the case of Removed Accounts, (a)
to cause Green Tree to indicate in its books and records, which may include
computer files, as required by the Purchase Agreement, that the Receivables
created in connection with the Accounts (other than Removed Accounts) have been
sold, and the Collateral Security assigned, to the Transferor in accordance with
the Purchase Agreement and sold to the Trust pursuant to this Agreement for the
benefit of the Certificateholders and the other Beneficiaries and (b) to deliver
to the Trustee (or cause Green Tree to do so) a computer file or microfiche or
written list containing a true and complete list of all such Accounts (other
than Removed Accounts) specifying for each such Account, as of the Cut-Off Date,
in the case of the Initial Accounts, and the applicable Additional Cut-Off Date,
in the case of Additional Accounts, (i) its account number and (ii) the
aggregate amount of Principal Receivables in such Account. Such file or list,
as supplemented from time to time to reflect Additional Accounts and Removed
Accounts, shall be marked as Schedule 1 to this Agreement and is hereby
incorporated into and made a part of this Agreement. The Trustee shall be under
no obligation whatsoever to verify the accuracy or completeness of the
information contained in Schedule 1 from time to time.
In the event that such sale and assignment is deemed to constitute a pledge
of security for a loan, it is the intent of this Agreement that the Transferor
shall be deemed to have granted to the Trustee a first priority perfected
security interest in
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all of the Transferor's right, title and interest to and under the Receivables
and the Collateral Security and all proceeds thereof, the Floorplan Agreements
and the Purchase Agreement, and that this Agreement shall constitute a security
agreement under applicable law. Such property, together with all monies as are
from time to time deposited in the Collection Account, any Interest Funding
Account, any Principal Account, any Distribution Account, any Series Account and
the Excess Funding Account and all amounts on deposit in or credited to such
accounts (excluding any investment earnings on any such deposited amount except
for such amounts as are on deposit in the Excess Funding Account) and any other
account and all monies as are from time to time available under any Enhancement
for any Series for payment to Certificateholders shall constitute the property
of the Trust (the "Trust Property").
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf of the Trust,
of all right, title and interest previously held by the Transferor in, to and
under the Trust Property and declares that it shall maintain such right, title
and interest, upon the Trust herein set forth, for the benefit of all
Certificateholders and the other Beneficiaries.
(b) The Trustee shall have no power to create, assume or incur indebtedness
or other liabilities in the name of the Trust other than as contemplated in this
Agreement.
Section 2.3 Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Trustee, on behalf of the
Trust, as of the Initial Closing Date and, with respect to any Series of
Certificates, as of the date of the related Supplement and the related Closing
Date for such Series:
(a) Organization and Good Standing. The Transferor is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware and has the corporate power and authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement and the Purchase Agreement and to execute and
deliver to the Trustee the Certificates pursuant hereto.
(b) Due Qualification. The Transferor is duly qualified to do business and
is in good standing (or is exempt from such requirements) as a foreign
corporation in any state required in order to conduct business, and has obtained
all necessary licenses and approvals with respect to the Transferor required
under federal and Delaware law.
(c) Due Authorization. The execution and delivery of this Agreement and
the Purchase Agreement and the consummation of the transactions provided for
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herein and therein, have been duly authorized by the Transferor by all necessary
corporate action on its part.
(d) Binding Obligation. Each of this Agreement and the Purchase Agreement,
and the consummation of the transactions provided for herein and therein,
constitutes a legal, valid, and binding obligation of the Transferor,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general and as such enforceability may be limited by
general principles of equity (whether considered in a proceeding at law or in
equity).
(e) No Conflicts. The execution and delivery of this Agreement and the
Purchase Agreement and the performance of the transactions contemplated hereby
and thereby, do not (i) contravene the Transferor's charter or bylaws, (ii)
violate any material provision of law applicable to it or require any filing
(except for the filings under the UCC), registration, consent or approval under,
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the
Transferor, except for such filings, registrations, consents or approvals as
have already been obtained and are in full force and effect.
(f) No Violation. The execution and delivery of this Agreement and the
Purchase Agreement and the execution and delivery to the Trustee of the
Certificates, the performance of the transactions contemplated by this Agreement
and the Purchase Agreement and the fulfillment of the terms hereof and thereof
will not violate any Requirements of Law applicable to the Transferor, will not
violate, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law applicable to the Transferor or any material indenture,
contract, agreement, mortgage, deed of trust or other material instrument to
which the Transferor is a party or by which it or its properties are bound.
(g) No Proceedings. There are no proceedings or investigations pending or,
to the best knowledge of the Transferor, threatened against the Transferor,
before any Governmental Authority (i) asserting the invalidity of this Agreement
and the Purchase Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated hereby or thereby, (iii) seeking any determination
or ruling that would materially and adversely affect the performance by the
Transferor of its obligations thereunder, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
thereof or (v) seeking to affect adversely the tax attributes of the Trust.
(h) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Governmental Authority required in connection with the
execution and delivery of this Agreement, the Purchase Agreement and the
Certificates, the performance of the transactions contemplated by this Agreement
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and the Purchase Agreement and the fulfillment of the terms hereof and thereof,
have been obtained.
(i) Record of Accounts. As of the Initial Closing Date, in the case of the
Initial Accounts, as of the applicable Addition Date, in the case of the
Additional Accounts, and, as of the applicable Removal Date, in the case of
Removed Accounts, Schedule 1 to this Agreement is an accurate and complete
listing in all material respects of all the Accounts as of the Cut-off Date, the
applicable Additional Cut-off Date or the applicable Removal Date, as the case
may be, and the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and correct in all
material respects as of the Cut-off Date, such applicable Additional Cut-off
Date or such Removal Date, as the case may be.
(j) Valid Transfer. This Agreement or, in the case of Additional Accounts,
the related Assignment constitutes a valid sale, transfer and assignment to the
Trust of all right, title and interest of the Transferor in the Receivables and
the Collateral Security and the proceeds thereof and all of the Transferor's
rights, remedies, powers and privileges with respect to the Receivables under
the Purchase Agreement and the related Financing Agreements and Floorplan
Agreements, if any, and, upon the filing of the financing statements described
in Section 2.1 with the Secretary of State of the State of Minnesota and, in the
case of the Receivables hereafter created and the proceeds thereof, upon the
creation thereof, the Trust shall have a perfected ownership interest in such
property, free of the Liens of any other Person, except for Liens permitted
under Section 2.5(a). Except as otherwise provided in this Agreement, neither
the Transferor nor any Person claiming through or under the Transferor has any
claim to or interest in the Trust Assets.
(k) Pay Out Event. As of the Initial Closing Date, no Pay Out Event and no
condition that with the giving of notice and/or the passage of time would
constitute a Pay Out Event (a "Prospective Pay Out Event"), has occurred and is
continuing.
(l) Not an Investment Company. The Transferor is not an "investment
company" within the meaning of the Investment Company Act, or is exempt from all
provisions of such Act.
For the purposes of the representations and warranties contained in this
Section 2.3 and made by the Transferor on the Initial Closing Date,
"Certificates" shall mean the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall survive
the transfer and assignment of the respective Receivables to the Trust, and
termination of the rights and obligations of the Servicer pursuant to Section
10.1. The Transferor hereby represents and warrants to the Trust, with respect
to any Series of Certificates, as of its Closing Date, unless otherwise stated
in the related Supplement, that the representations and warranties of the
Transferor set forth in Section 2.3, are true and correct as of such date (and
for the purposes of such representations and warranties, "Certificates" shall
mean the Certificates issued on the related Closing Date) and that
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each representation and warranty set forth in this Section 2.3 and in Section
2.4(a)(i) with respect to the Agreement shall be made at such time with respect
to the applicable Supplement. Upon discovery by the Transferor, the Servicer or
a Responsible Officer of the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
Section 2.4 Representations and Warranties of the Transferor Relating to
the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. The Transferor
hereby represents and warrants to the Trustee, on behalf of the Trust, that, as
of the Initial Closing Date and with respect to any Series of Certificates, as
of the date of its related Supplement and Closing Date:
(i) The Purchase Agreement and this Agreement each constitutes the
legal, valid and binding obligation of the Transferor, enforceable against
the Transferor in accordance with its terms, except (A) 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 (B)
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(ii) The transfer of Receivables by the Transferor to the Trust under
this Agreement constitutes either (A) a valid transfer, assignment, setover
and conveyance to the Trust of all right, title and interest of the
Transferor in and to the Trust Property, and such Trust Property will be
held by the Trust free and clear of any Lien of any Person claiming through
or under the Transferor or any of its Affiliates except for (x) Permitted
Liens, (y) the interest of the Transferor as Holder of the Exchangeable
Transferor Certificate and any other Class of Certificates held by the
Transferor from time to time and (z) the Transferor's right, if any, to
interest accruing on, and investment earnings, if any, in respect of any
Interest Funding Account, any Principal Account, the Excess Funding
Account, or any Series Account, as provided in this Agreement or the
related Supplement, or (B) a grant of a first priority security interest
(as defined in the UCC as in effect in the Relevant UCC State) in, to and
under the Trust Property, which grant is enforceable with respect to the
existing Receivables and the proceeds thereof upon execution and delivery
of this Agreement, and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof, upon such creation.
If this Agreement constitutes the grant of a security interest to the Trust
in such property, upon the filing of the financing statement described in
Section 2.1 and in the case of the Receivables hereafter created and
proceeds thereof, upon such creation, the Trust shall have a first priority
perfected security interest in such property, except for Permitted Liens.
Except as contemplated
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in this Agreement or any Supplement, neither the
Transferor nor any Person claiming through or under the Transferor shall
have any claim to or interest in the Collection Account, any Principal
Account, any Interest Funding Account, the Distribution Account, the Excess
Funding Account, any principal funding account for any Series or any other
Series Account, except for the Transferor's rights to receive interest
accruing on, and investment earnings in respect of, any such account as
provided in this Agreement (or, if applicable, any Series Account as
provided in any Supplement) and, if this Agreement constitutes the grant of
a security interest in such property, except for the interest of the
Transferor in such property as a debtor for purposes of the UCC as in
effect in the Relevant UCC State. The Purchase Agreement constitutes a
valid transfer, assignment, set-over and conveyance to the Transferor of
all right, title and interest of Green Tree in and to the Receivables
purported to be sold thereunder, whether then existing or thereafter
created in the applicable Accounts and the proceeds thereof.
(iii) The Transferor is not insolvent and will not
be rendered insolvent upon the transfer of the Receivables to the Trust.
(iv) All consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required in
connection with the transfer of Trust Property to the Trust have been
obtained.
(v) Each Receivable and all other Trust Property existing on the first
Closing Date or, in the case of Additional Accounts, on the applicable
Addition Date, and on each Transfer Date, has been conveyed to the Trust
free and clear of any Lien.
(vi) With respect to each Receivable and all other Trust Property
existing on the Initial Closing Date or, in the case of Additional
Accounts, on the applicable Addition Date, and on each Transfer Date, all
consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance of
such Receivable or other Trust Property to the Trust have been duly
obtained, effected or given and are in full force and effect.
(vii) On the Cut-Off Date and each Closing Date, each Initial Account
is an Eligible Account and, in the case of Additional Accounts, on the
applicable Additional Cut-Off Date and each subsequent Closing Date, each
such Additional Account is an Eligible Account.
(viii) On the first Closing Date, in the case of the Initial Accounts,
and, in the case of the Additional Accounts, on the applicable Additional
Cut-Off Date, and on each Transfer Date, each Receivable conveyed to the
Trust on
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such date is an Eligible Receivable or,
if such Receivable is not an Eligible Receivable, such Receivable is
conveyed to the Trust in accordance with Section 2.09.
(b) Notice of Breach. The representations and warranties set forth in this
Section 2.4 shall survive the transfer and assignment of the respective
Receivables to the Trust. Upon discovery by the Transferor, the Servicer or a
Responsible Officer of the Trustee of a breach of any of the representations and
warranties set forth in this Section 2.4, the party discovering such breach
shall give prompt written notice to the other parties mentioned above. The
Transferor agrees to cooperate with the Servicer and the Trustee in attempting
to cure any such breach.
(c) Designation of Ineligible Receivables. In the event any representation
or warranty set forth in Section 2.4(a) is not true and correct as of the date
specified therein with respect to any Receivable or Account and such breach has
a material adverse effect on the Certificateholders' Interest in such Receivable
or Account, or in the event that a Receivable is not an Eligible Receivable on
the date of its transfer to the Trust as a result of the failure to satisfy the
conditions set forth in the definition of Eligible Receivable, such Receivable
shall be designated an "Ineligible Receivable" and shall be assigned an
Outstanding Balance of zero for the purpose of determining the aggregate amount
of Principal Receivables on any day; provided, however, that if such
representations and warranties with respect to such Receivable shall
subsequently be true and correct in all material respects as if such Receivable
had been created on such day or such Receivable shall subsequently satisfy the
conditions set forth in the definition of Eligible Receivable, such Receivable
shall be designated an Eligible Receivable, and the Outstanding Balance of such
Receivable shall be included in determining the aggregate amount of Principal
Receivables on such day. On and after the date of its designation as an
Ineligible Receivable, each Ineligible Receivable shall not be given credit in
determining the aggregate amount of Principal Receivables used in the
calculation of any Investor Percentage, the Transferor Percentage or the
Transferor Interest. In the event that on any Business Day the exclusion of an
Ineligible Receivable from the calculation of the Transferor Interest would
cause the Transfer or Interest to be reduced below the Minimum Transferor
Interest, the Transferor shall immediately make a deposit in the Excess Funding
Account (for allocation as a Principal Receivable) in immediately available
funds prior to the next succeeding Business Day in an amount equal to the amount
by which the Transferor Interest would be reduced below the Minimum Transferor
Interest as a result of the exclusion of such Ineligible Receivable. The
portion of such deposit allocated to the Investor Certificates of each Series
shall be distributed to the Investor Certificateholders of each Series in the
manner specified in Article IV.
(d) Reassignment of Trust Portfolio. In the event any representation and
warranty under Section 2.4(a) is not true and correct as of the date specified
therein with respect to any Receivable or Account and such breach has a material
adverse effect on the Certificateholders' Interest in such Receivable or
Account, with respect
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to any Series, either the Trustee or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested Amount
of such Series, by notice then given in writing to the Transferor (and to the
Trustee and the Servicer, if given by the Investor Certificateholders of such
Series), may direct the Transferor to accept reassignment of an amount of
Principal Receivables equal to the face amount of the Invested Amount to be
repurchased (as specified below) within 60 days of such notice (or within such
longer period as may be specified in such notice), and the Transferor shall be
obligated to accept reassignment of such Receivables on a Distribution Date
specified by the Transferor (such Distribution Date, the "Reassignment Date")
occurring within such applicable period on the terms and conditions set forth
below; provided, however, that no such reassignment shall be required to be
made, and no notice of such reassignment may be given, if, at any time during
such applicable period, the representations and warranties contained in
subsections 2.3(a), (b) and (c) and subsections 2.4(a)(i) and (ii) shall then be
true and correct in all material respects. The Transferor shall, on the Transfer
Date (in next day funds) preceding the Reassignment Date, deposit an amount
equal to the reassignment deposit amount for such Series in the related
Distribution Account or Series Account, as provided in the related Supplement,
for distribution to the Investor Certificateholders pursuant to Article XII. The
reassignment deposit amount with respect to any Series, unless otherwise stated
in the related Supplement, shall be equal to (i) the Invested Amount of such
Series at the end of the day on the last day of the Monthly Period preceding the
Reassignment Date plus (ii) an amount equal to all interest accrued but unpaid
on the Investor Certificates of such Series at the applicable Certificate Rate
through such last day, less the amount, if any, previously allocated for payment
of interest to the Certificateholders of such Series on the related Distribution
Date in the Monthly Period in which the Reassignment Date occurs plus any other
amounts accrued and owing as specified in the applicable Supplement. Payment of
the reassignment deposit amount with respect to any Series, and all other
amounts in the Distribution Account or the applicable Series Account in respect
of the preceding Monthly Period, shall be considered a prepayment in full of the
Receivables represented by the Investor Certificates of such Series. On the
Distribution Date following the Transfer Date on which such amount has been
deposited in full into the Distribution Account or the applicable Series
Account, the Receivables and all monies due or to become due with respect
thereto and all proceeds of the Receivables shall be released to the Transferor
after payment of all amounts otherwise due hereunder on or prior to such dates
and the Trustee shall execute and deliver such instruments of transfer or
assignment, in each ease without recourse, representation or warranty, as shall
be prepared by and as are reasonably requested by the Transferor to vest in the
Transferor, or its designee or assignee, all right, title and interest of the
Trust in and to such Receivables, all monies due or to become due with respect
thereto and all proceeds of such Receivables allocated to such Receivables
pursuant to the related Supplement. If the Trustee or the Investor
Certificateholders of any Series give notice directing the Transferor to accept
reassignment as provided above, the obligation of the Transferor to accept
reassignment of the applicable Receivables and pay the reassignment deposit
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amount pursuant to this subsection 2.4(d) shall constitute the sole remedy
respecting a breach of the representations and warranties contained in
subsections 2.3(a), (b) and (c) and 2.4(a)(i) and (ii) available to the Investor
Certificateholders of such Series or the Trustee on behalf of the Investor
Certificateholders of such Series. The Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable by the Transferor pursuant to this Agreement or any
Supplement or the eligibility of any Receivable for purposes of this Agreement
or any Supplement.
Section 2.5 Covenants of the Transferor. The Transferor hereby covenants
that:
(a) No Liens. Except for the conveyances hereunder or as provided in
Section 6.9, the Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on,
any Receivable or any other Trust Asset, whether now existing or hereafter
created, or any interest therein, or the Transferor's Interest or the
Exchangeable Transferor Certificate and the Transferor shall defend the right,
title and interest of the Trust in, to and under the Receivables and the other
Trust Assets, whether now existing or hereafter created, and such rights,
remedies, powers and privileges, against all claims of third parties claiming
through or under the Transferor.
(b) Receivables to be Accounts. The Transferor will take no action to
cause any Receivable to be evidenced by any instrument (as defined in the UCC as
in effect in the Relevant UCC State), except in connection with the enforcement
or collection of a Receivable. Except in such circumstances, the Transferor
will take no action to cause any Receivable to be anything other than an
"account" (as defined in the UCC as in effect in the Relevant UCC State).
(c) Security Interests. Except for the conveyances hereunder, the
Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien, on any Receivable,
whether now existing or hereafter created, or any interest therein; the
Transferor will immediately notify the Trustee of the existence of any Lien on
any Receivable; and the Transferor shall defend the right, title and interest of
the Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Transferor; provided, however, that nothing in this subsection 2.5(b) shall
prevent or be deemed to prohibit the Transferor from suffering to exist upon any
of the Receivables any Permitted Lien.
(d) Account Allocations. In the event that the Transferor is unable for
any reason to transfer Receivables to the Trust, then the Transferor agrees that
it shall allocate, after the occurrence of such event, payments on each Account
with respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with the terms of this Agreement. The parties hereto
agree that Interest Receivables,
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whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust shall continue to be
a part of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with the terms of this
Agreement.
(e) Delivery of Collections. In the event that the Transferor, Green Tree,
or any Affiliate thereof, receives Collections, the Transferor and Green Tree
agrees to deposit such Collections into the Collection Account as soon as
practicable after the receipt thereof, but in no event later than two Business
Days following the Date of Processing thereof.
(f) Conveyance of Receivables. The Transferor covenants and agrees that it
will not permit Green Tree to convey, assign, exchange or otherwise transfer any
Receivable, to any Person other than the Transferor prior to the termination of
this Agreement pursuant to Article XII; provided, however, that the Transferor
shall not be prohibited hereby from permitting Green Tree to convey, assign,
exchange or otherwise transfer a Receivable in connection with a transaction in
which Green Tree and its successor agree to comply with provisions substantially
similar to those of Section 7.2.
(g) Notice of Liens. The Transferor shall notify the Trustee promptly
after becoming aware of any Lien on any Receivable other than Permitted Liens
and Participation Interests.
(h) Enforcement of Purchase Agreement. The Transferor agrees to take all
action necessary and appropriate to enforce its rights and claims under the
Purchase Agreement.
(i) Separate Business. The Transferor will not permit its assets to be
commingled with those of Green Tree and the Transferor shall maintain separate
corporate records, books of accounts and bank accounts from those of Green Tree.
The Transferor will not conduct its business in the name of Green Tree and will
cause Green Tree to conduct its business solely in its own name so as not to
mislead others as to the identity of the entity with which those others are
concerned. The Transferor will provide for its own operating expenses and
liabilities from its own funds, except that the organizational expenses of the
Transferor may be paid by Green Tree. The Transferor will not hold itself out,
or permit itself to be held out, as having agreed to pay, or as generally being
liable for, the debts of Green Tree. The Transferor shall cause Green Tree not
to hold itself out, or permit itself to be held out, as having agreed to pay, or
as generally being liable for, the debts of the Transferor except that the
organizational expenses of the Transferor may be paid by Green Tree and that
Green Tree will contribute to the Transferor on the Closing Date a demand note.
The Transferor will maintain an arm's length relationship with Green Tree with
respect to any transactions between the Transferor, on the one hand, and Green
Tree, on the other.
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(j) Purchase Agreement Notices. The Transferor (i) shall promptly give the
Trustee copies of any notices, reports or certificates given or delivered to the
Transferor under the Purchase Agreement, (ii) shall not without the consents,
approvals and opinions, if any, required by Section 13.1, as if Section 13.1
related to the Purchase Agreement rather than this Agreement, enter into any
amendment, supplement or other modification to, or waiver of any provision of,
the Purchase Agreement and (iii) shall not permit the addition or removal of a
Receivable to or from the operation of the Purchase Agreement unless there is a
corresponding right or obligation of the Transferor to add or remove such
Receivable to or from the Trust.
Section 2.6 Addition of Accounts.
(a) If, as of the close of business on the last day of any Collection
Period, (i) the Pool Balance on such day is less than the Required Participation
Amount as of the following Distribution Date (after giving effect to the
allocations, distributions, withdrawals and deposits to be made on such
Distribution Date), or (ii) the result obtained by multiplying (x) the Seller's
Participation Amount (for purposes of this paragraph, determined by using the
Pool Balance as determined in accordance with this paragraph) as of the
following Distribution Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on such Distribution Date),
by (y) the percentage equivalent of the portion of the Transferor's Interest
represented by the ITT FRLP Certificate, is less than 5% of the Pool Balance on
such last day, then the Transferor shall, within 10 Business Days following the
end of such Collection Period, designate and transfer to the Trust the
Receivables (and the related Collateral Security) of additional Eligible
Accounts of the Transferor to be included as Accounts in a sufficient amount
such that after giving effect to such addition (i) the Pool Balance (determined
in accordance with this paragraph) as of the close of business on the Addition
Date is at least equal to such Required Participation Amount and (ii) the
result obtained by multiplying (x) such Transferor's Participation Amount
(determined in accordance with this paragraph) by (y) the percentage equivalent
of the portion of the Transferor's Interest represented by the ITT FRLP
Certificate, is at least equal to 5% of such Pool Balance, as the case may be.
The Transferor shall satisfy the conditions specified in Section 2.6(d) in
designating such Additional Accounts and conveying the related Receivables to
the Trust. The failure of the Transferor to transfer Receivables to the Trust
as provided in this paragraph solely as a result of the unavailability of a
sufficient amount of Eligible Receivables shall not constitute a breach of this
Agreement; provided, however, that any such failure will nevertheless result in
the occurrence of an Early Amortization Event described in Section 9.1(a).
(b) The Transferor may from time to time, at its sole discretion, subject
to the conditions specified in paragraph (d) below, voluntarily designate
additional Eligible Accounts to be included as Accounts and transfer to the
Trust the Receivables (and the related Collateral Security) of such Additional
Accounts.
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(c) Receivables and Collateral Security from such Additional Accounts shall
be sold to the Trust effective on a date (each an "Addition Date") specified in
a written notice provided by the Transferor (or the Servicer on its behalf) to
the Trustee, the Rating Agencies, any Agent and any Enhancement Providers
specifying the Additional Cut-Off Date and the Addition Date for such Additional
Accounts (each an "Addition Notice") on or before the fifth Business Day but not
more than the 30th day prior to the related Addition Date or, if the Automatic
Addition Condition is satisfied, on the Determination Date following the
Collection Period in which such Addition Dates occur (the "Notice Date"). An
Addition Notice may relate to one or more Accounts added on one or more Addition
Dates.
(d) The Transferor shall be permitted to convey to the Trust the
Receivables and all Collateral Security related thereto in any Additional
Accounts designated by the Transferor as such pursuant to Section 2.6(a) or (b)
only upon satisfaction of each of the following conditions on or prior to the
related Notice Date (except for the condition in clause (vii), if applicable,
which shall be satisfied on or before the tenth Business Day after such Notice
Date):
(i) the Transferor shall have provided the Trustee, any Agent, the
Rating Agencies and any Enhancement Providers with a timely Addition
Notice;
(ii) such Additional Accounts shall all be Eligible Accounts;
(iii) the Transferor shall have delivered to the Trustee a duly
executed written assignment (including an acceptance by the Trustee) in
substantially the form of Exhibit __ (the "Assignment") covering the
Receivables in the Accounts specified in the Addition Notice and the
computer file or microfiche or written list required to be delivered
pursuant to Section 2.1;
(iv) the Transferor shall, to the extent required by Section 4.3, have
deposited in the Collection Account all Collections with respect to such
Additional Accounts since the Additional Cut-Off Date;
(v) (A) no selection procedures reasonably believed by the Transferor
to be adverse to the interests of the Beneficiaries shall have been used in
selecting such Additional Accounts; (B) the list of Additional Accounts
delivered pursuant to clause (iii) above shall be true and correct in all
material respects as of the Additional Cut-Off Date and (C) as of each of
the Notice Date and the Addition Date, neither Green Tree nor the
Transferor shall have been insolvent nor shall any of them have been made
insolvent by such transfer nor shall any of them be aware of any pending
insolvency;
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(vi) if the Automatic Addition Condition is not satisfied with respect
to such addition, the Rating Agency Condition shall have been satisfied
with respect to such addition
(vii) If (A) one or more of the Additional Accounts specified in such
Addition Notice will contain Receivables secured by a security interest in
a type of Product that has not been previously financed in the Floorplan
Business or (B) one or more of the Additional Accounts is supported by a
Floorplan Agreement with a Manufacturer that, as of the related Addition
Date, is not an Existing Manufacturer, then, whether or not the Automatic
Condition is satisfied, the Rating Agency Condition shall have been
satisfied in respect of the addition of each Additional Account specified
in clauses (A) and (B) on or prior to the related Addition Date;
(viii) the addition of the Receivables arising in such Additional
Accounts shall not result in the occurrence of a Pay Out Event;
(ix) the Transferor shall have delivered to the Trustee and any
Enhancement Providers a certificate of a Vice President: or more senior
officer confirming (A) the items set forth in paragraphs (ii) through
(viii) above and (B) that the Transferor reasonably believes that the
addition of the Receivables arising in such Additional Accounts will not
result in the occurrence of an Early Amortization Event; and
(x) on or before each Notice Date, the Transferor shall have delivered
to the Trustee and any Enhancement Providers (A) an Opinion of Counsel with
respect to the Receivables in the Additional Accounts added since the last
delivery of such opinion substantially in the form of Exhibit __ and (B)
except in the case of an addition required by Section 2.6(a), a Tax Opinion
with respect to such addition; provided that if such Opinion of Counsel and
Tax Opinion are required to be delivered, they shall be from outside
counsel no less frequently than quarterly; provided further that, unless
the Rating Agency Condition is satisfied, such Opinion of Counsel and Tax
Opinion shall be from outside counsel if the rating of the unsecured
long-term debt of Green Tree below investment grade.
(e) The Transferor hereby represents and warrants as of the applicable
Addition Date as to the matters set forth in Section 2.6(d)(v). Upon discovery
by the Transferor, the Servicer, any Agent, a Responsible Officer of the Trustee
or any Enhancement Providers of a breach of the foregoing representations and
warranties, the party discovering the breach shall give prompt written notice to
the other parties, to any Agent and to any Enhancement Providers.
(f) Notwithstanding anything in this Section 2.5 to the contrary, the
additions of Additional Accounts pursuant to Section 2.5(b) on or prior to the
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Closing Date for Series 1995-1 need not satisfy clause (i), (vi), (vii) or (x)
of Section 2.5(d).
Section 2.7. Removal of Eligible Accounts.
(a) On each Determination Date, the Transferor shall have the right to
remove Accounts, including all amounts then held by the Trust or thereafter
received by the Trust in respect of the Accounts being removed, from the Trust
in the manner prescribed in Section 2.7(b). The termination of an Account by a
Dealer upon such Dealer's payment in full of the related Account shall not be a
removal of such Account under this Section 2.7.
(b) To remove Accounts, including all amounts then held by the Trust or
thereafter received by the Trust in respect of the Accounts being removed, the
Transferor (or the Servicer on its behalf) shall take the following actions and
make the following determinations:
(i) not less than five Business Days prior to the Removal Date,
furnish to the Trustee, any Agent, any Enhancement Providers and the Rating
Agencies a written notice (the "Removal Notice") specifying the
Determination Date (which may be the Determination Date on which such
notice is given) on which removal of the Receivables of one or more
Accounts (the "Removed Accounts") will occur (a "Removal Date");
(ii) from and after such Removal Date, cease to transfer to the Trust
any and all Receivables arising in such Removed Accounts;
(iii) represent and warrant that the removal of any such Eligible
Account on any Removal Date shall not, in the reasonable belief of the
Transferor, cause a Pay Out Event to occur or cause the Pool Balance to be
less than the Required Participation Amount;
(iv) represent and warrant that no selection procedures reasonably
believed by the Transferor to be adverse to the interests of the
Certificateholders or the Beneficiaries were utilized in selecting the
Accounts to be removed;
(v) satisfy the Rating Agency Condition with respect to such removal;
(vi) deliver to the Trustee, each Rating Agency, any Agent and any
Enhancement Providers a Tax Opinion, dated the Removal Date, with respect
to such removal;
(vii) on or before the related Removal Date, deliver to the Trustee,
any Agent and any Enhancement Providers an Officer's Certificate confirming
the items set forth in clauses (iii) through (v) above and confirming that
the
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Transferor reasonably believes that the removal of the Removed Accounts
will not result in the occurrence of a Pay Out Event; the Trustee may
conclusively rely on such Officer's Certificate and shall have no duty to
make inquiries with regard to the matters set forth therein and shall incur
no liability in so relying; and
(viii) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the Removed Accounts that were removed on the Removal Date, specifying for
each Removed Account as of the date of the Removal Notice its number, the
aggregate amount outstanding in such Removed Account and the aggregate
amount of Principal Receivables therein and represent that such computer
file, microfiche list or other list of the Removed Accounts is true and
complete in all material respects.
No Accounts shall be so removed if such removal will result in a reduction or
withdrawal of the rating of any outstanding Series or Class by the applicable
Rating Agency.
(c) Subject to Section 2.7(b), on the Removal Date with respect to any such
Removed Account, such Removed Account shall be deemed removed from the Trust for
all purposes. After the Removal Date and upon the written request of the
Servicer, the Trustee shall deliver to the Transferor a reassignment in
substantially the form of Exhibit __ (the "Reassignment").
Section 2.8. Removal of Ineligible Accounts.
(a) On or prior to the tenth Business Day following the date on which an
Account becomes an Ineligible Account (which date shall be deemed to be the
"Removal Commencement Date"), the Transferor shall commence removal of the
Receivable of such Ineligible Account in the manner prescribed in Section
2.8(b).
(b) With respect to each Account that becomes an Ineligible Account, the
Transferor (or the Servicer on its behalf) shall take the following actions and
make the following determinations:
(i) furnish to the Trustee, any Agent and any Enhancement Providers a
Removal Notice specifying the Removal Commencement Date and the Ineligible
Accounts to be removed (the "Designated Accounts");
(ii) determine on the Removal Commencement Date with respect to such
Designated Accounts the aggregate balance of Principal Receivables in
respect of each Designated Account (the "Designated Balance") and amend
Schedule 1 by delivering to the Trustee a computer file or microfiche or
written list containing a true and complete list of the Removed Accounts
specifying for each such Account, as of the Removal Commencement Date, its
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account number, the aggregate amount of Receivables outstanding in such
Account and the Designated Balance;
(iii) from and after such Removal Commencement Date, cease to transfer
to the Trust any and all Receivables arising in such Designated Accounts;
(iv) from and after such Removal Commencement Date, allocate
Collections of Principal Receivables in respect of each Designated Account,
first to the oldest outstanding principal balance of such Designated
Account, until the Removal Date with respect thereto; and
(v) on each Business Day from and after such Removal Commencement Date
to and until the related Removal Date, allocate (A) to the Trust (to be
further allocated pursuant to the terms of this Agreement), Defaulted
Receivables and Collection of Interest Receivables in respect of each
Designated Account, based on the ratio of the aggregate amount of Principal
Receivables in all Designated Accounts owned by the Trust on such Business
Day to the total aggregate amount of Principal Receivables in all such
Designated Accounts on such Business Day and (B) to the Transferor, the
remainder of the Defaulted Receivables and Collections of Interest
Receivables in all such Designated Accounts on such Business Day.
(c) On the Removal Date with respect to any such Account to be removed, the
Transferor shall cease to allocate any Collections therefrom in accordance
herewith and such Account shall be deemed a Removed Account. After the Removal
Date and upon the written request of the Servicer, the Trustee shall deliver to
the Transferor a Reassignment.
Section 2.9. Sale of Ineligible Receivables. The Transferor shall sell to
the Trust on each Transfer Date any and all Receivables arising in any Eligible
Accounts that are Ineligible Receivables, provided that on the Initial Cut-off
Date or, in the case of Receivables arising in Additional Accounts, on the
related Additional Cut-off Date, and on the applicable Transfer Date, the
Account in which such Receivables arise is an Eligible Account.
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ARTICLE III
ADMINISTRATION AND SERVICING
----------------------------
OF RECEIVABLES
--------------
Section 3.1 Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) Green Tree agrees to act as the Servicer under this Agreement. The
Investor Certificateholders of each Series by their acceptance of the related
Certificates consent to Green Tree acting as Servicer. Notwithstanding the
foregoing or any other provisions of this Agreement or any Supplement, the
Investor Certificateholders consent to an Affiliate of Green Tree acting as
Servicer hereunder, in full substitution thereof; provided, that Green Tree will
remain jointly and severally liable with such Affiliate.
(b) The Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables in accordance with its customary and
usual servicing procedures and shall have full power and authority, acting alone
or through any party properly designated by it hereunder, to do any and all
things in connection with such servicing and administration that it may deem
necessary or desirable. Without limiting the generality of the foregoing and
subject to Section 10.1, the Servicer is hereby authorized and empowered (i) to
make withdrawals from the Collection Account as set forth in this Agreement,
(ii) unless such power and authority is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.1, to instruct the
Trustee in writing to make withdrawals and payments, from any Interest Funding
Account, the Excess Funding Account, any Principal Account and any Series
Account, in accordance with such instructions as set forth in this Agreement,
(iii) unless such power and authority is revoked by the Trustee on account of
the occurrence of a Servicer Default pursuant to Section 10.1, to instruct the
Trustee in writing to take any action permitted or required under any
Enhancement at such time as set forth in this Agreement and any Supplement, (iv)
to execute and deliver, on behalf of the Trust for the benefit of the
Certificateholders, 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 Receivables and, after the delinquency of any Receivable and
to the extent permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with respect to such
Receivables, (v) to make any filings, reports, notices, applications,
registrations with, and to seek any consents or authorizations from, the
Securities and Exchange Commission and any state securities authority on behalf
of the Trust as may be necessary or advisable to comply with any federal or
state securities or reporting requirements and (vi) to delegate certain of its
service, collection, enforcement and administrative duties hereunder with
respect to the Receivables to any Person who agrees to conduct such duties in
accordance with the Servicer's customary and usual servicing procedures;
provided, that the Servicer shall remain jointly and severally liable with such
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Person. The Trustee agrees that it shall promptly follow the instructions of
the Servicer to withdraw funds from the Collection Account, any Principal
Account, any Interest Funding Account, the Excess Funding Account, or any Series
Account and to take any action required under any Enhancement at such time as
required under this Agreement. The Trustee shall execute at the Servicer's
written request such documents prepared by the Transferor and acceptable to the
Trustee as the Servicer certifies are necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate servicing
procedures, offices or employees for servicing the Receivables from the
procedures, offices and employees used by the Servicer in connection with
servicing other receivables.
(d) The Servicer shall comply with and perform its servicing obligations
with respect to the Financing Agreements relating to the Accounts and the
Financing Guidelines, except insofar as any failure to so comply or perform
would not materially and adversely affect the rights of the Trust or any of the
Beneficiaries. Subject to compliance with all Requirements of Law, the Servicer
may change the terms and provisions of the Wholesale Financing Agreements, the
Floorplan Agreements, the Asset Based Financing Agreements or the Financing
Guidelines in any respect (including the calculation of the amount or the timing
of charge-offs and the rate of the finance charge assessed thereon), only if as
a result of such change, in this reasonable judgment of the Servicer, no Pay Out
Event will occur.
Section 3.2 Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
servicing fee in respect of each day prior to the termination of the Trust
pursuant to Section 12.1 (the "Servicing Fees"), payable in arrears on each date
and in the manner specified in the applicable Supplement, equal to the product
of (i) a fraction, the numerator of which is the actual number of days in the
measuring period specified in the applicable Supplement and the denominator of
which is the actual number of days in the year, (ii) the weighted average Series
Servicing Fee Percentage for all Outstanding Series (based upon the Series
Servicing Fee Percentage for each Series and the Invested Amount of such Series)
and (iii) the daily average aggregate Outstanding Balance of all Principal
Receivables over the term of such measuring period. The share of the Servicing
Fee allocable to each Series with respect to any date of payment shall be equal
to the product of (i) a fraction, the numerator of which is the actual number of
days in the measuring period specified in the applicable Supplement and the
denominator of which is the actual number of days in the year, (ii) the
applicable Series Servicing Fee Percentage for such Series and (iii) the
Invested Amount of such Series, as appropriate, as of the date of determination
for such payment as specified in the applicable Supplement. The remainder of
the Servicing Fee shall be paid by the Transferor, or retained by the Servicer
as provided in Article IV, and in no event shall the Trust, the Trustee, any
Enhancement
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Provider, or the Investor Certificateholders be liable for the share of the
Servicing Fee to be paid by the Transferor.
The Servicer shall be responsible for its own expenses, which shall include
the amounts due to the Trustee pursuant to Section 11.5 and the reasonable fees
and disbursements of independent public accountants and all other expenses
incurred by the Servicer in connection with its activities hereunder; provided,
that the Servicer shall not be liable for any liabilities, costs or expenses of
the Trust, the Investor Certificateholders or the Certificate Owners arising
under any tax law, including without limitation any federal, state or local
income or franchise taxes or any other tax imposed on or measured by income (or
any interest, penalties or additions with respect thereto or arising from a
failure to comply therewith). In the event that the Servicer fails to pay any
amounts due to the Trustee pursuant to Section 11.5, the Trustee shall be
entitled to deduct and receive such amounts from the Servicing Fee prior to the
payment thereof to the Servicer and the obligations of the Trust to pay any such
amounts shall thereby be fully satisfied. The Servicer shall be required to pay
such expenses for its own account and shall not be entitled to any payment
therefor other than the Servicing Fee.
Section 3.3 Representations and Warranties of the Servicer. Green Tree,
as initial Servicer, hereby makes, and any Successor Servicer by its appointment
hereunder shall make, the following representations and warranties on which the
Trustee has relied in accepting the Receivables in trust and in authenticating
the Certificates issued on the Initial Closing Date:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has the corporate power, authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business and
is in good standing (or is exempt from such requirements) as a foreign
corporation in any state where such qualification is necessary in order to
service the Receivables as required by this Agreement and has obtained all
necessary licenses and approvals as required under Federal and state law in
order to service the Receivables as required by this Agreement, and if the
Servicer shall be required by any Requirement of Law to so qualify or register
or obtain such license or approval, then it shall do so except where the failure
to obtain such license or approval does not materially affect the Servicer's
ability to perform its obligations hereunder or the enforceability of the
Receivables.
(c) Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions provided for herein, have been duly
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authorized by the Servicer by all necessary corporate action on the part of the
Servicer.
(d) Binding Obligation. This Agreement and the consummation of the
transactions provided for herein, constitutes a legal, valid and binding
obligation of the Servicer, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general and as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) No Violation. The execution and delivery of this Agreement by the
Servicer, and the performance of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof applicable to the Servicer, will not
violate, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
any Requirement of Law applicable to the Servicer or any material indenture,
contract, agreement, mortgage, deed of trust or other material instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or investigations pending or,
to the best knowledge of the Servicer, threatened against the Servicer before
any Governmental Authority (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the issuance of the Certificates or the consummation of any
of the transactions contemplated by this Agreement, (iii) seeking any
determination or ruling that would materially and adversely affect the
performance by the Servicer of its obligations under this Agreement, (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or (v) seeking to affect
adversely the tax attributes of the Trust.
(g) Compliance with Requirements of Law. The Servicer shall duly satisfy
all obligations on its part to be fulfilled under or in connection with each
Receivable, will maintain in effect all qualifications required under
Requirements of Law in order to service properly each Receivable and will comply
in all material respects with all other Requirements of Law in connection with
servicing each Receivable the failure to comply with which would have a material
adverse effect on the Certificateholders or any Enhancement Provider.
(h) Protection of Certificateholders' Rights. The Servicer shall take no
action which, nor omit to take any action the omission of which, would impair
the rights of Certificateholders in any Receivable or the rights of any
Enhancement Provider, nor shall it reschedule, revise or defer payments due on
any Receivable except in accordance with Green Tree's usual and customary
collection procedures.
(i) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Governmental Authority required in connection with the
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execution and delivery of this Agreement and the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof, have
been obtained; provided, however, that the Servicer makes no representation or
warranty regarding State securities or "Blue Sky" laws in connection with the
distribution of the Certificates.
(j) Rescission or Cancellation. The Servicer shall not permit any
rescission or cancellation of any Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in accordance with
Green Tree's usual and customary collection policies or the normal operating
procedures of the Servicer.
(k) Negative Pledge. Except for the conveyance hereunder to the Trustee,
the Servicer will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on, any Receivable sold
and assigned to the Trust, whether now existing or hereafter created, or any
interest therein, and the Servicer shall defend the rights, title and interest
of the Trust in, to and under any Receivable sold and assigned to the Trust,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Seller or the Servicer.
(l) Principal Place of Business. The Servicer shall at all times maintain
its principal executive offices within the United States.
Section 3.4 Reports and Records for the Trustee.
(a) Daily Records. Upon reasonable prior notice by the Trustee, the
Servicer shall make available at an office of the Servicer (or other location
designated by the Servicer if such records are not accessible by the Servicer
at an office of the Servicer) selected by the Servicer for inspection by the
Trustee or its agent (reasonably acceptable to the Servicer) on a Business Day
during the Servicer's normal business hours a record setting forth (i) the
Collections on the Receivables and (ii) the amount of Receivables for the
Business Day preceding the date of the inspection. The Servicer shall, at all
times, maintain its computer files with respect to the Receivables in such a
manner so that the Receivables may be specifically identified and, upon
reasonable prior request of the Trustee, shall make available to the Trustee, at
an office of the Servicer (or other location designated by the Servicer if such
computer files are not located at an office of the Servicer) selected by the
Servicer, on any Business Day of the Servicer during the Servicer's normal
business hours any computer programs necessary to make such identification.
(b) Daily Report.
(i) On each Business Day the Servicer shall prepare a completed Daily
Report.
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(ii) The Servicer shall deliver to the Trustee and the Paying Agent
the Daily Report by 3:00 p.m. (New York City time) on each Business Day
with respect to activity in the Receivables for the prior Business Day (or,
in the case of a Daily Report delivered on the second Business Day
following a Saturday, Sunday or other non-Business Day, the aggregate
activity for the preceding Business Day and such preceding non-Business
Days).
(iii) Upon discovery of any error or receipt of notice of any error in
any Daily Report, the Servicer, the Transferor and the Trustee shall
arrange to confer and shall agree upon any adjustments necessary to correct
any such errors. If any such error is material, the Servicer or the
Trustee, as the case may be, shall retain all Collections which would
otherwise be paid from the Trust (or such lesser amount as the Trustee and
the Servicer shall agree to be necessary to cover any such error) in the
Collection Account until such material error is corrected. Unless the
Trustee has received written notice of any error or discrepancy, the
Trustee may rely on each Daily Report delivered to it for all purposes
hereunder.
(c) Settlement Statement. On the second Business Day prior to each
Distribution Date, the Servicer shall, prior to 3:00 p.m. (New York City time)
on such day, deliver to the Trustee and the Paying Agent the Settlement
Statement for the related Monthly Period substantially in the form of Exhibit C
hereto, including the following information (which, in the case of clauses
(iii), (iv) and (v) below, will be stated on the basis of an original principal
amount of $1,000 per Certificate): (i) the aggregate amount of Collections
received in the Collection Account for the Monthly Period preceding such
Determination Date and the aggregate amount of Imputed Yield Collections and the
aggregate amount of Principal Collections processed during such Monthly Period;
(ii) with respect to the preceding Monthly Period for each Series of
Certificates, the aggregate amount of the applicable Investor Percentage of
Principal Collections, and the aggregate amount of the applicable Investor
Percentage of Imputed Yield Collections; (iii) for each Series and for each
Class within any such Series, the total amount to be distributed to Investor
Certificateholders on the next succeeding Distribution Date; (iv) for each
Series and for each Class within any such Series, the amount of such
distribution to Certificateholders allocable to principal; (v) for each Series
and for each Class within any such Series, the amount of such distribution to
Certificateholders allocable to interest; (vi) for each Series and each Class
within a Series, the Investor Default Amount for the immediately preceding
Monthly Period; (vii) for each Series and each Class within a Series, the amount
of the Investor Charge-Offs and the amount of the reimbursements of Investor
Charge-Offs for such Distribution Date; (viii) for each Series, the Servicing
Fee for such Distribution Date; (ix) for each Series, the existing deficit
controlled amortization amount, if applicable; (x) the Aggregate Principal
Receivables in the Trust at the close of business on the last day of the
Monthly Period preceding such Distribution Date; (xi) for each Series, the
Invested Amount at the close of business on the last day of the Monthly Period
immediately preceding such Distribution Date; (xii) the available amount of any
Enhancement for each Class of
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each Series, if any; (xiii) for each Series and each Class within a Series, the
Pool Factor as of the end of the related Monthly Period; (xiv) whether a Pay Out
Event or a Prospective Pay Out Event with respect to any Series shall have
occurred during or with respect to the related Monthly Period; (xv) the amount
of any Adjustment Payments for the Related Monthly Period; and (xvi) such other
calculations as may be required by any Supplement. The Trustee shall be under no
duty to recalculate, verify or recompute the information supplied to it under
this Section 3.4 or such other matters as are set forth in any Settlement
Statement. The Servicer shall also provide a copy of the Settlement Statement in
a prompt manner to each Rating Agency.
Section 3.5 Annual Servicer's Certificate. The Servicer will deliver, in
accordance with Section 13.5, to the Trustee, any Enhancement Provider and each
Rating Agency, on or before March 31 of each year, beginning in 1997, an
Officer's Certificate substantially in the form of Exhibit D stating that (a) a
review of the activities of the Servicer during the preceding fiscal year and of
its performance under this Agreement was made under the supervision of the
officer signing such certificate and (b) to such officer's knowledge, based on
such review, the Servicer has fully performed all its obligations under this
Agreement throughout such period, or, if there has been a default in the
performance of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Investor Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.
Section 3.6 Annual Independent Accountants' Servicing Report.
(a) On or before March 31 of each year, commencing March 31, 1997, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report with respect to the prior fiscal year to the
Trustee, any Enhancement Provider and each Rating Agency, to the effect that
such firm has applied certain procedures, agreed upon with the Servicer and the
Trustee which would re-perform certain accounting procedures performed by the
Servicer pursuant to certain documents and records relating to the servicing of
the Receivables under this Agreement. In addition, each report shall set forth
the agreed upon procedures performed and the results of such procedures.
(b) On or before March 31 of each year, commencing March 31, 1997, the
Servicer shall cause a firm of nationally recognized independent certified
public accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report to the Trustee, any Enhancement Provider and
each Rating Agency to the effect that they have compared the mathematical
calculations set forth in each of the monthly certificates forwarded by the
Servicer pursuant to subsection 3.4(c) during the period covered by such report
with the computer reports which were the source of such amounts and that on the
basis of such comparison,
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such amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such report.
(c) A copy of each report provided pursuant to Section 3.5 or 3.6 may be
obtained by any Investor Certificateholder by a request to the Trustee addressed
to the Corporate Trust Office.
Section 3.7 Tax Treatment. The Transferor has structured this Agreement
and the Investor Certificates with the intention that the Investor Certificates
will qualify under applicable federal, state, local and foreign tax law as
indebtedness. Except to the extent expressly specified to the contrary in any
Supplement, the Transferor, the Servicer, the Holder of the Exchangeable
Transferor Certificate, each Investor Certificateholder, and each Certificate
Owner agree to treat and to take no action inconsistent with the treatment of
the Investor Certificates (or beneficial interest therein) as indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Investor Certificateholder,
and the Holder of the Exchangeable Transferor Certificate, by acceptance of its
Certificate and each Certificate Owner, by acquisition of a beneficial interest
in a Certificate, agree to be bound by the provisions of this Section 3.7. Each
Certificateholder agrees that it will cause any Certificate Owner acquiring an
interest in a Certificate through it to comply with this Agreement as to
treatment as indebtedness under applicable tax law, as described in this Section
3.7. Furthermore, subject to Section 11.11, the Trustee shall treat the Trust
as a security device only, and shall not file tax returns or obtain an employer
identification number on behalf of the Trust.
Section 3.8 Adjustments.
(a) If the Servicer adjusts downward the amount of any Receivable because
of a rebate, refund, credit adjustment or billing error to a Dealer, or because
such Receivable was created in respect of a Product which was refused or
returned by a Dealer or if the Servicer otherwise adjusts downward the amount of
any Receivable without receiving Collections therefor or without charging off
such amount as uncollectible, then, in any such case, the Transferor Interest
will be reduced and the aggregate amount of the Principal Receivables used to
calculate the Investor Percentages applicable to any Series will be reduced by
the principal amount of any such adjustment. Similarly, the aggregate amount of
the Principal Receivables used to calculate the Investor Percentages applicable
to any Series will be reduced by the amount of any Principal Receivable which
was discovered as having been created through a fraudulent or counterfeit charge
or with respect to which the covenant contained in subsection 2.5(b) was
breached. Any adjustment required pursuant to either of the two preceding
sentences shall be made on or prior to the end of the Monthly Period in which
such adjustment obligation arises. In the event that, following any such
exclusion, the Transferor Interest would be less than the Minimum Transferor
Interest, within two Business Days of the date on which such adjustment
obligation arises, the Transferor shall pay to the Servicer, for deposit
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into the Excess Funding Account, in immediately available funds an amount equal
to the amount by which the Transferor Interest would be reduced below the
Minimum Transferor Interest as a result of such adjustment or exclusion. Any
amount deposited into the Excess Funding Account in connection with the
adjustment of a Receivable (an "Adjustment Payment") shall be applied in
accordance with Article IV and the terms of each Supplement.
(b) If (i) the Servicer makes a deposit into the Collection Account in
respect of a Collection of a Receivable and such Collection was received in the
form of a check which is not honored for any reason or (ii) the Servicer makes a
mistake with respect to the amount of any Collection and deposits an amount that
is less than or more than the actual amount of such Collection, the Servicer
shall appropriately adjust the amount subsequently deposited into the
Collection Account to reflect such dishonored check or mistake. Any Receivable
in respect of which a dishonored check is received shall be deemed not to have
been paid. Notwithstanding the first two sentences of this paragraph, any
adjustments made pursuant to this paragraph will be reflected in a current
report but will not change any amount of Collections previously reported
pursuant to subsection 3.4(b).
Section 3.9 Notices to Green Tree. In the event that Green Tree or any
Affiliate thereof is no longer acting as Servicer, any Successor Servicer
appointed pursuant to Section 10.2 shall deliver or make available to Green Tree
each certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.4, 3.5 and 3.6.
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
-------------------------------------------
AND APPLICATION OF COLLECTIONS
------------------------------
Section 4.1 Rights of Certificateholders. Each Series of Investor
Certificates shall represent Undivided Interests in the Trust, including the
benefits of any Enhancement issued with respect to such Series and the right to
receive the Collections and other amounts at the times and in the amounts
specified in this Article IV to be deposited in the Investor Accounts or to be
paid to the Investor Certificateholders of such Series; provided, however, that
the aggregate interest represented by such Certificates at any time in the
Principal Receivables shall not exceed an amount equal to the Invested Amount of
such Certificates. The Exchangeable Transferor Certificate shall represent the
remaining undivided interest in the Trust, including the right to receive the
Collections and other amounts at the times and in the amounts specified in this
Article IV to be paid to the Holder of the Exchangeable Transferor Certificate;
provided, however, that the aggregate interest represented by such Exchangeable
Transferor Certificate at any time in the Principal Receivables shall not exceed
the Transferor Interest at such time and such Certificate shall not represent
any interest in the Investor Accounts, except as provided in this Agreement, or
the benefits of any Enhancement issued with respect to any Series.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit of the
Certificateholders, shall establish in the name of the Trustee, on behalf of
the Trust, a non-interest bearing segregated account (the "Collection Account")
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Certificateholders, and shall cause such
Collection Account to be established and maintained, (i) in a segregated trust
account with the corporate trust department of a depositary institution or trust
company (which may include the Trustee) organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
which has a long-term unsecured debt rating of at least Baa3 by Moody's and
whose deposits are insured to the limits provided by law by the FDIC having
corporate trust powers and acting as trustee for funds deposited therein
(provided, however, that such account need not be maintained as a segregated
trust account with the corporate trust department of such institution if at all
times the certificates of deposit short-term deposits or commercial paper or
the long-term unsecured debt obligations (other than such obligation whose
rating is based on collateral or on the credit of a Person other than such
institution or trust company) of such depositary institution or trust company
shall have a credit rating from Standard & Poor's of at least A-1+ and P-1 from
Moody's of at least P-1 in the case of the certificates of deposit, short-term
deposits or commercial paper, or a rating from Standard & Poor's of AAA and
from Moody's of Aaa in the case of the long-term unsecured debt obligations, or
(ii) with a depositary institution, which may include
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the Trustee, which is acceptable to the Rating Agency (in the case of (i) and
(ii), a "Qualified Institution"). If, at any time, the institution holding the
Collection Account ceases to be a Qualified Institution, the Transferor shall
direct the Servicer to establish within ten Business Days a new Collection
Account with a Qualified Institution, transfer any cash and/or any investments
to such new Collection Account and from the date such new Collection Account is
established, it shall be the "Collection Account." The Servicer shall give
written notice to the Trustee of the location and account number of the
Collection Account and shall notify the Trustee in writing prior to any
subsequent change thereof. Pursuant to authority granted to it pursuant to
subsection 3.1(b), the Servicer shall have the power revocable by the Trustee to
withdraw funds from the Collection Account for the purposes of carrying out its
duties hereunder.
The Collection Account shall be under the sole dominion and control of the
Trustee and the Trustee shall possess all right, title and interest in all funds
from time to time on deposit in such account.
(b) The Interest Funding and Principal Accounts. The Trustee, for the
benefit of the Investor Certificateholders, shall establish and maintain with a
Qualified Institution in the name of the Trust two segregated trust accounts for
each Series (an "Interest Funding Account" and a "Principal Account,"
respectively), each bearing a designation clearly indicating that the funds
therein are held for the benefit of the Investor Certificateholders of such
Series. Except as provided in subsection 4.2(e), each Interest Funding Account
and each Principal Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. Pursuant to
authority granted to it hereunder, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Interest Funding Account and
any Principal Account for any purpose of carrying out the Servicer's or the
Trustee's duties hereunder. The Trustee at all times shall maintain accurate
records reflecting each transaction in each Principal Account and each Interest
Funding Account and that funds held therein shall at all times be held in trust
for the benefit of the Investor Certificateholders of such Series. If, at any
time, the institution holding the Interest Funding Account ceases to be a
Qualified Institution, the Servicer shall direct the Trustee to establish within
ten Business Days a new Interest Funding Account meeting the conditions
specified above with a Qualified Institution, transfer any cash and/or any
investments to such new Interest Funding Account and from the date such new
Interest Funding Account is established, it shall be the "Interest Funding
Account." Similarly, if, at any time, the institution holding any Principal
Account ceases to be a Qualified Institution, the Servicer shall direct the
Trustee to establish within ten Business Days a new Principal Account meeting
the conditions specified above with a Qualified Institution, transfer any cash
and/or any investments to such new Principal Account and from the date such new
Principal Account is established, it shall be a "Principal Account."
(c) Distribution Accounts. The Trustee, for the benefit of the Investor
Certificateholders of each Series, shall cause to be established and maintained
in the
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name of the Trust, with an office or branch of a Qualified Institution a
non-interest-bearing segregated demand deposit account for each Series (a
"Distribution Account") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Investor
Certificateholders of such Series. Each Distribution Account shall be under the
sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders of the related Series. Pursuant to the authority granted to
the Paying Agent herein, the Paying Agent shall have the power, revocable by the
Trustee, to make withdrawals and payments from the Distribution Account for the
purpose of carrying out the Paying Agent's duties hereunder. If, at any time,
the institution holding a Distribution Account ceases to be a Qualified
Institution, the Servicer shall direct the Trustee to establish within ten
Business Days a new Distribution Account meeting the conditions specified above
with a Qualified Institution, transfer any cash and/or any investments to such
new Distribution Account and from the date such new Distribution Account is
established, it shall be a "Distribution Account."
(d) The Excess Funding Account. The Trustee, for the benefit of the
Certificateholders, shall cause to be established in the name of the Trustee, on
behalf of the Certificateholders, with a Qualified Institution, a segregated
trust account (the "Excess Funding Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders. Except as provided in subsection 4.3(f), the Excess
Funding Account shall, except as otherwise provided herein, be under the sole
dominion and control of the Trustee for the benefit of the Certificateholders.
Pursuant to the authority granted to the Servicer herein, the Servicer shall
have the power, revocable by the Trustee, to make withdrawals and payments from
the Excess Funding Account for the purpose of carrying out the Servicer's or
Trustee's duties hereunder. If, at any time, the institution holding the Excess
Funding Account ceases to be a Qualified Institution, the Servicer shall direct
the Trustee to establish within ten Business Days a new Excess Funding Account
meeting the conditions specified above with a Qualified Institution, transfer
any cash and/or any investments to such new Excess Funding Account and from the
date such new Excess Funding Account is established, it shall be the "Excess
Funding Account."
(e) Administration of the Principal Accounts and the Interest Funding
Accounts. Funds on deposit in each Principal Account and each Interest Funding
Account shall at all times be invested by the Servicer (or, at the written
direction of the Transferor, by the Trustee) on behalf of the Transferor in Cash
Equivalents. Any such investment shall mature and such funds shall be available
for withdrawal on the Transfer Date following the Monthly Period in which such
funds were processed for collection. No such investments shall be liquidated
prior to maturity. At the end of each month, all interest and earnings (net of
losses and investment expenses) on funds on deposit in each Principal Account
and each Interest Funding Account (unless otherwise specified in the applicable
Supplement) shall be deposited by the Trustee in a separate deposit account with
a Qualified Institution in the name of the Servicer, or a Person designated in
writing by the Servicer, which shall not constitute
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a part of the Trust, or shall otherwise be turned over by the Trustee to the
Servicer not less frequently than monthly. Subject to the restrictions set forth
above, the Servicer, or a Person designated in writing by the Servicer, of which
the Trustee shall have received written notification, shall have the authority
to instruct the Trustee with respect to the investment of funds on deposit in
any Principal Account and any Interest Funding Account. Any investment
instructions to the Trustee shall be in writing, shall be given no later than
10:00 a.m. New York City time on a Business Day that such investment is proposed
to be made and shall include a certification that the proposed investment is a
Cash Equivalent that matures at or prior to the time required by this Agreement.
For purposes of determining the availability of funds or the balances in any
Interest Funding Account and any Principal Account for any reason under this
Agreement all investment earnings on such funds shall be deemed not to be
available or on deposit.
Section 4.3 Collections and Allocations.
(a) Collections. Dealers shall make payments on the Receivables to the
Servicer who shall deposit all such payments in the Collection Account no later
than the second Business Day following the Date of Processing thereof.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Exchangeable Transferor Certificate in
accordance with this Article IV and shall cause the Trustee to withdraw the
required amounts from the Collection Account or pay such amounts to the Holder
of the Exchangeable Transferor Certificate in accordance with this Article IV.
The Servicer shall make such deposits or payments on the date indicated herein
by wire transfer or as otherwise provided in the Supplement for any Series of
Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, but subject to
the terms of any Supplement, for so long as, and only so long as, Green Tree (or
any successors to Green Tree pursuant to Section 8.2) or an Affiliate of Green
Tree shall remain the Servicer hereunder, and (a)(i) Green Tree (or any
successors to Green Tree pursuant to Section 8.2) or an Affiliate of Green Tree
provides to the Trustee a letter of credit or other form of Enhancement rated at
least A-1 by Standard & Poor's and P-1 by Moody's (as certified to the Trustee
by the Servicer), and (ii) after notifying each Rating Agency of the proposed
use of such letter of credit or other form of Enhancement the Transferor shall
have received a notice from each Rating Agency that making payments monthly
rather than daily would not result in a downgrading or withdrawal of any of
such Rating Agency's then existing ratings of the Investor Certificates, or (b)
Green Tree (or any successors to Green Tree pursuant to Section 8.2) shall have
and maintain a short-term credit rating of at least A-1 by Standard & Poor's and
P-1 by Moody's (as certified to the Trustee by the Servicer), the Servicer need
not deposit Collections from the Collection Account into the Principal Account
or the Interest Funding Account or any Series Account, or make payments to the
Holder of the Exchangeable Transferor Certificate, prior to the close of
business
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on the day any Collections are deposited in the Collection Account as otherwise
provided in this Article IV, but may instead make such deposits, payments and
withdrawals on each Transfer Date in an amount equal to the net amount of such
deposits, payments and withdrawals which would have been made but for the
provisions of this paragraph.
(b) Allocations for the Exchangeable Transfer or Certificate. Throughout
the existence of the Trust, unless otherwise stated in any Supplement, on each
Business Day the Servicer shall allocate to the Holder of the Exchangeable
Transferor Certificate an amount equal to the product of (A) the Transferor
Percentage as of the end of the preceding Business Day and (B) the aggregate
amount of Principal Collections and Imputed Yield Collections available in the
Collection Account. The Servicer shall pay such amount to the Holder of the
Exchangeable Transferor Certificate on each Business Day; provided, however,
that amounts payable to the Holder of the Exchangeable Transferor Certificate
pursuant to this clause (b) shall instead be deposited in the Excess Funding
Account to the extent necessary to prevent the Transferor Interest from being
less than the Minimum Transferor Interest.
(c) Reserved
(d) Allocation for Series. On each Business Day, (i) the amount of Imputed
Yield Collections available in the Collection Account allocable to each Series
shall be determined by multiplying the aggregate amount of such Imputed Yield
Collections by the Floating Allocation Percentage for such Series, (ii) the
amount of Principal Collections available in the Collection Account allocable to
each Series shall be determined by multiplying the aggregate amount of such
Principal Collections by (x) during the Revolving Period for a Series, the
Floating Allocation Percentage for such Series and (y) during any Amortization
Period for a Series, the Fixed/Floating Allocation Percentage for such Series,
and (iii) the Defaulted Receivables allocable to each Series shall be determined
by multiplying the aggregate amount of such Defaulted Receivables by the
Floating Allocation Percentage for such Series. The Servicer shall, prior to
the close of business on the day any Collections are deposited in the Collection
Account, cause the Trustee to withdraw the required amounts from the Collection
Account and cause the Trustee to deposit such amounts into the applicable
Principal Account, the applicable Interest Funding Account, the Excess Funding
Account, or any Series Account or pay such amounts to the Holder of the
Exchangeable Transferor Certificate in accordance with the provisions of this
Article IV.
(e) Unallocated Principal Collections; Excess Funding Account. On each
Business Day, Shared Principal Collections shall be allocated to each
outstanding Series pro rata based on the Principal Shortfall, if any, for each
such Series. The Servicer shall pay any remaining Shared Principal Collections
on such Business Day to the Transferor; provided, that if the Transferor
Interest as determined on such Business Day does not exceed the Minimum
Transferor Interest, then such remaining Shared Principal Collections shall be
deposited in the Excess Funding
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Account to the extent necessary to increase the Transferor Interest above the
Minimum Transferor Interest; provided, further, that if an Amortization Period
has commenced and is continuing with respect to more than one outstanding
Series, such remaining Shared Principal Collections shall be allocated to such
Series pro rata based on the Investor Percentage for Principal Receivables
applicable for such Series.
(f) Amounts in Excess Funding Account. Amounts on deposit in the Excess
Funding Account on any Business Day will be invested by the Servicer (or, at the
direction of the Transferor, by the Trustee) on behalf of the Transferor in Cash
Equivalents which shall mature and be available on or before the next Business
Day on which amounts may be released from the Excess Funding Account. Earnings
from such investments received shall be deposited in the Collection Account and
treated as Imputed Yield Collections. Any investment instructions to the
Trustee shall be in writing and shall include a certification that the proposed
investment is a Cash Equivalent that matures at or prior to the date required by
this Agreement. If on any Business Day other than a Business Day on which a
Prospective Pay Out Event has occurred and is continuing, the Transferor
Interest is greater than the Minimum Transferor Interest, amounts on deposit in
the Excess Funding Account may, at the option of the Transferor, be released to
the Holder of the Exchangeable Transferor Certificate. On the first Business
Day of the Amortization Period for any Series, funds on deposit in the Excess
Funding Account will be deposited in the Principal Account for such Series to
the extent of the lesser of (x) the Invested Amount of such Series and (y) the
amount then on deposit in the Excess Funding Account.
THE REMAINDER OF ARTICLE IV IS RESERVED
AND SHALL BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES
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<PAGE>
ARTICLE V
ARTICLE V IS RESERVED AND SHALL BE
SPECIFIED IN ANY SUPPLEMENT WITH RESPECT
TO ANY SERIES
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<PAGE>
ARTICLE VI
THE CERTIFICATES
----------------
Section 6.1 The Certificates. Subject to Sections 6.10 and 6.13, the
Investor Certificates of each Series and any Class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and, if
applicable, a special coupon (collectively, the "Coupons") or in fully
registered form (the "Registered Certificates"), and shall be substantially in
the form of the exhibits with respect thereto attached to the related
Supplement. The Exchangeable Transferor Certificate shall be substantially in
the form of Exhibit A. The Investor Certificates and the Exchangeable
Transferor Certificate shall, upon issue pursuant hereto or to Section 6.9 or
Section 6.10, be executed and delivered by the Transferor to the Trustee for
authentication and redelivery as provided in Sections 2.1 and 6.2. Any Investor
Certificate shall be issuable in a minimum denomination of $1,000 Undivided
Interest and integral multiples thereof, unless otherwise specified in any
Supplement, and shall be issued upon original issuance in an original aggregate
principal amount equal to the Initial Invested Amount. The Exchangeable
Transferor Certificate shall be issued as a single certificate. Each
Certificate shall be executed by manual or facsimile signature on behalf of the
Transferor by its President or any Vice President. Certificates bearing the
manual or facsimile signature of the individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Transferor or the
Trustee shall not be rendered invalid, notwithstanding that such individual has
ceased to be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been validly issued and duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication except Bearer Certificates which shall be dated the
applicable Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates. Contemporaneously with the
initial assignment and transfer of the Receivables, whether now existing or
hereafter created and the other components to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates, upon the
written order of the Transferor. Upon the issuance of such Investor
Certificates, such Investor Certificates shall be validly issued, fully paid
and nonassessable. The Trustee shall authenticate and deliver the Exchangeable
Transferor Certificate to the Transferor simultaneously with its delivery of the
initial Series of Investor Certificates. Upon an Exchange as provided in
Section 6.9 and the satisfaction of certain other conditions specified therein,
the Trustee shall authenticate and deliver the Investor Certificates of
additional Series (with the designation provided in the related
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Supplement), upon the written order of the Transferor. Upon the written order of
the Transferor, the Certificates of any Series shall be duly authenticated by or
on behalf of the Trustee, in authorized denominations equal to (in the
aggregate) the Initial Invested Amount of such Series of Investor Certificates.
If specified in the related Supplement for any Series, the Trustee shall
authenticate and deliver outside the United States the Global Certificate that
is issued upon original issuance thereof, upon the written order of the
Transferor, to the Depositary. If specified in the related Supplement for any
Series, the Trustee shall authenticate Book-Entry Certificates that are issued
upon original issuance thereof, upon the written order of the Transferor, to a
Clearing Agency or its nominee as provided in Section 6.10.
Section 6.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar") in accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Whenever reference is made in this
Agreement to the transfer or exchange of the Certificates by the Trustee, such
reference shall be deemed to include the transfer or exchange on behalf of the
Trustee by a Transfer Agent and Registrar. _____________ is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate is issued as a Global
Certificate, _____________ may, or if and so long as any Series of Investor
Certificates are listed on a stock exchange and such exchange shall so require,
_____________ shall appoint a co-transfer agent and co-registrar, which will
also be a co-paying agent, in such city as the Transferor may specify. Any
reference in this Agreement to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context otherwise requires.
____________ shall be permitted to resign as Transfer Agent and Registrar upon
30 days' written notice to the Servicer. In the event that ______________ shall
no longer be the Transfer Agent and Registrar, the Transferor shall appoint a
successor Transfer Agent and Registrar. If any Series with respect to which Book
Entry Certificates were originally issued is no longer issued as Book-Entry
Certificates, then the Servicer may appoint a successor Transfer Agent and
Registrar.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose, the Transferor shall execute, subject to the provisions of subsection
6.3(c), and the Trustee shall (unless the Transfer Agent and Registrar is
different than the Trustee, in which case the Transfer Agent and Registrar
shall) authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in
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authorized denominations of like aggregate Undivided Interests; provided, that
the provisions of this paragraph shall not apply to Bearer Certificates.
At the option of any Holder of Registered Certificates, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose. At the option of a Bearer Certificateholder, subject to applicable
laws and regulations (including without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of like aggregate
Undivided Interests in the Trust, in the manner specified in the Supplement for
such Series, upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this Section 6.3 shall
have attached thereto (or be accompanied by) all unmatured Coupons, provided
that any Bearer Certificate so surrendered after the close of business on the
Record Date preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to such
Distribution Date.
Whenever any Investor Certificates of any Series are so surrendered for
exchange, the Transferor shall execute, and the Trustee shall (unless the
Transfer Agent and Registrar is different than the Trustee, in which case the
Transfer Agent and Registrar shall) authenticate and deliver, the Investor
Certificates of such Series which the Certificateholder making the exchange is
entitled to receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the Trustee
or the Transfer Agent and Registrar, as the case may be, shall not be required
to register the transfer of or exchange any Investor Certificate of any Series
for the period from the Record Date preceding the due date for any payment to
the Distribution Date with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Certificates, but
the Transfer Agent and 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.
All Investor Certificates (together with any Coupons attached to Bearer
Certificates) surrendered for registration of transfer or exchange shall be
canceled
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by the Transfer Agent and Registrar and disposed of in a manner satisfactory to
the Trustee. The Trustee shall cancel and dispose of any Global Certificate upon
its exchange in full for Definitive Certificates, but shall not be required to
destroy such Global Certificates. Such certificate shall also state that a
certificate or certificates of each Foreign Clearing Agency to the effect
referred to in Section 6.13 was received with respect to each portion of the
Global Certificate exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the Transfer
Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any Supplement, in no
event shall the Exchangeable Transferor Certificate or any interest therein be
transferred, sold, exchanged, pledged, participated or otherwise assigned
hereunder, in whole or in part, unless the Transferor shall have consented in
writing to such transfer and unless the Trustee shall have received (1)
confirmation in writing from each Rating Agency that such transfer will not
result in a lowering or withdrawal of its then-existing rating of any Series of
Investor Certificates and (2) an Opinion of Counsel that such transfer does not
(i) adversely affect the conclusions reached in any of the federal income tax
opinions issued in connection with the original issuance of any Series of
Investor Certificates or (ii) result in a taxable event to the holders of any
such Series.
(c) Unless otherwise provided in the related Supplement, registration of
transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in such related Supplement are
satisfied.
Whenever a Registered Certificate containing the legend set forth in the
related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the Servicer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive written instructions
signed by an officer of the Trustee prior to registering any such transfer or
authenticating new Registered Certificates, as the case may be. The Servicer
hereby agrees to indemnify the Transfer Agent and Registrar and the Trustee and
to hold each of them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on any such written
instructions furnished pursuant to this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its expense in the
Borough of Manhattan, The City of New York, an office or offices or an agency or
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agencies where Investor Certificates of such Series may be surrendered for
registration of transfer or exchange.
(e) Prior to the Transfer of any portion of a Transferor Retained Class,
the Trustee shall have received (i) an Officer's Certificate of the Transferor
that on the date of the proposed Transfer, taking into account the certificates
whose Transfer is proposed, more than 20% (by Invested Amount and by value) of
the outstanding certificates issued by the Trust with respect to which no
Opinion of Counsel was issued that the applicable class would be treated as debt
for federal income tax purposes (including the Transferor Certificate and each
Transferor Retained Class) shall be owned by the Transferor and (ii) an Opinion
of Counsel to the effect that such proposed Transfer will not adversely affect
the Federal, Minnesota or Delaware income tax characterization of any
outstanding Series of Investor Certificates or the taxability (or tax
characterization) of the Trust under Federal, Minnesota or Delaware income tax
laws. The Transferor shall provide to Moody's notice of any such Transfer and a
copy of the Opinion of Counsel described in clause (ii) above.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate (together, in the case of Bearer Certificates, with all
unmatured Coupons, if any, appertaining thereto) is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent and Registrar receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there is delivered to the Transfer Agent and Registrar and the Trustee such
security or indemnity as may be required by them to hold each of them and the
Trust harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
(unless the Transfer Agent and Registrar is different from the Trustee, in which
case the Transfer Agent and Registrar shall) authenticate and deliver (in
compliance with applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate Undivided Interest. In connection with the issuance of any
new Certificate under this Section 6.4, the Trustee or the Transfer Agent and
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Transfer Agent
and Registrar) connected therewith. Any duplicate Certificate issued pursuant
to this Section 6.4 shall constitute complete and indefeasible 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 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them 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 Article V (as described in
any Supplement) and Article XI; and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall
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be affected by any notice to the contrary; provided, however, that in
determining whether the holders of Investor Certificates evidencing the
requisite Undivided Interests have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Investor Certificates owned by
the Transferor, the Servicer or any Affiliate thereof 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 Investor Certificates which a
Responsible Officer in the Corporate Trust Office of the Trustee knows to be so
owned shall be so disregarded. Investor Certificates so owned that have been
pledged in good faith shall not be disregarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Investor Certificates and that the pledgee is not the
Transferor, the Servicer or an Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the holder
of a Bearer Certificate or Coupon as the owner of such Bearer Certificate or
Coupon for the purpose of receiving distributions pursuant to Article V (as
described in any Supplement) and Article XII and for all other purposes
whatsoever, and neither the Trustee, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to the
contrary. Certificates so owned that have been pledged in good faith shall not
be disregarded and 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 Investor Certificates and that the pledgee is not the Transferor, the
Servicer or an Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V hereof. Any Paying Agent
shall have the revocable power to withdraw funds from such appropriate account
or accounts for the purpose of making distributions referred to above. The
Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke such
power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is the Paying Agent) determines in its sole discretion that the Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect or for other good cause. The Paying Agent, unless the
Supplement with respect to any Series states otherwise, shall initially be
_____________. ___________ shall be permitted to resign as Paying Agent upon 30
days' written notice to the Servicer. Upon the resignation of the Paying Agent,
if the Paying Agent was not the Trustee, the Trustee shall be the successor
Paying Agent unless and until another successor has been appointed as Paying
Agent. In the event that the Trustee shall no longer be the Paying Agent, the
Transferor shall appoint a successor to act as Paying Agent (which shall be a
bank or
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trust company). Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding and the Paying Agent is not
located in New York City, the Transferor shall maintain a co-paying agent in New
York City (for Registered Certificates only) or any other city designated in
such Supplement.
(b) The Trustee shall cause each Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such 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 and waive all rights of set off the Paying
Agent may have against any sums held by it until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding by the Trustee of payments in respect of
federal income taxes due from Certificate Owners.
Section 6.7 Access to List of Certificateholders' Names and Addresses.
The Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent, within five Business Days after
receipt by the Trustee of a request therefor from the Servicer or the Paying
Agent, respectively, in writing, a list in such form as the Servicer or the
Paying Agent may reasonably require, of the names and addresses of the Investor
Certificateholders as of the most recent Record Date for payment of
distributions to Investor Certificateholders. Unless otherwise provided in the
related Supplement, holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 25% of the Invested Amount of the Investor
Certificates of any Series (the "Applicants") may apply in writing to the
Trustee, and if such application states that the Applicants desire to
communicate with other Investor Certificateholders of any Series with respect to
their rights under this Agreement or under the Investor Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford such Applicants access during normal business
hours to the most recent list of Certificateholders held by the Trustee and
shall give the Servicer notice that such request has been made, within five
Business Days after the receipt of such application. Such list shall be as of
a date no more than 45 days prior to the date of receipt of such Applicants'
request. Every Certificateholder, by receiving and holding a Certificate,
agrees with the Trustee that neither the Trustee, the Transfer Agent and
Registrar, nor any of their respective agents 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 obtained.
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Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents (each, an
"Authenticating Agent") with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. The Trustee will appoint any Transfer Agent and
Registrar to be an Authentication Agent. Whenever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such refer-ence shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Transferor. The Trustee hereby initially appoints _______________ as its
Authenticating Agent.
(b) Any institution succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such Authenticating Agent.
(c) An Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Transferor. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving notice of
termina-tion to such Authenticating Agent and to the Transferor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an Authen-ticating Agent shall cease to be acceptable to the Trustee or the
Transferor, the Trustee promptly may appoint a successor Authenticating Agent.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authen-ticating Agent shall be appointed unless acceptable to the
Trustee and the Transferor.
(d) The Servicer agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable to
any Authenticating Agent.
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(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
Trustee's Certificate of Authentication
This is one of the certificates described in the Pooling and Servicing
Agreement.
--------------------------------------
as Authenticating Agent for the
Trustee,
By:
-----------------------------------
Authorized Signatory
Dated:
Section 6.9 Tender of Exchangeable Transferor Certificate.
(a) Upon any Exchange, the Transferor shall deliver to the Trustee for
authentication under Section 6.2, one or more new Series of Investor
Certificates. Any such Series of Investor Certificates shall be substantially
in the form specified in the related Supplement and shall bear, upon its face,
the designation for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supple-ment for a related Series, all
Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Enhancement provided for any Series shall not be available for any other Series)
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the related Supplement.
(b) The Holder of the Exchangeable Transferor Certificate may (i) tender
the Exchangeable Transferor Certificate to the Trustee in exchange for (A) one
or more newly issued Series of Investor Certificates, or (B) a reissued
Exchangeable Transferor Certificate, (ii) request the Trustee to issue to it one
or more Classes of any newly issued Series of Investor Certificates which upon
payment by the pur-chaser thereof of the Initial Invested Amount of such
Certificates to a Defeasance Account, will represent an interest in the Trust
equal to such Initial Invested Amount (an "Unfunded Certificate") or (iii) take
a combination of the actions specified in clauses (i) and (ii) provided that the
sum of the amount of Transferor Interest which is tendered under clause (i) and
the amount to be paid to the Defeasance Account under clause (ii) equals the
Initial Invested Amount of the Investor Certificates delivered to the Holder of
the Exchangeable Transferor Certificate (any such event under clauses (i), (ii)
or (iii), a "Transferor Exchange"). In
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addition, to the extent permitted for any Series of Investor Certificates as
specified in the related Supplement, the Investor Certificateholders of such
Series may tender their Investor Certificates and the Holder of the Exchangeable
Transfer or Certificate may tender the Exchangeable Transferor Certificate to
the Trustee pursuant to the terms and conditions set forth in such Supplement in
exchange for (i) one or more newly issued Series of Investor Certificates and
(ii) a reissued Exchangeable Transferor Certificate (an "Investor Exchange").
Notwithstanding anything to the contrary herein, the Transferor shall not be
permitted to deposit money into any Defeasance Account. The Transferor Exchange
and Investor Exchange are referred to collectively herein as an "Exchange." The
Holder of the Exchangeable Transferor Certificate may perform an Exchange by
notifying the Trustee, in writing, at least five Business Days in advance (an
"Exchange Notice") of the date upon which the Exchange is to occur (an "Exchange
Date"). Any Exchange Notice shall state the designation of any Series to be
issued on the Exchange Date and, with respect to each such Class or Series: (a)
its Initial Invested Amount (or the method for calculating such Initial Invested
Amount), which at any time may not be greater than the current principal amount
of the Exchangeable Transferor Certificate at such time (or in the case of an
Investor Exchange, the sum of the Invested Amount of any Class or Series of
Investor Certificates to be exchanged plus the current principal amount of the
Exchangeable Transferor Certificate) taking into account any Receivables trans-
ferred to the Trust simultaneous with such Exchange, (b) its Certificate Rate
(or the method for allocating interest payments or other cash flows to such
Series), if any, and (c) the Enhancement Provider, if any, with respect to such
Series. On the Exchange Date, the Trustee shall authenticate and deliver any
such Class or Classes of Series of Investor Certificates only upon delivery to
it of the following: (a) a Supplement satisfying the criteria set forth in
subsection 6.9(c) and in form reason-ably satisfactory to the Trustee executed
by the Transferor and the Servicer and specifying the Principal Terms of such
Series, (b) the applicable Enhancement, if any, (c) the agreement, if any,
pursuant to which the Enhancement Provider agrees to provide the Enhancement, if
any, (d) an Opinion of Counsel to the effect that (i) any Class of the newly
issued Series of Investor Certificates sold to third parties will be
characterized as either indebtedness or partnership interests for Federal and
appli-cable state income tax purposes or (ii) that the issuance of the newly
issued Series of Investor Certificates will not adversely affect the Federal,
Minnesota or Delaware in-come tax characterization of any outstanding Series of
Investor Certificates or the taxability of the Trust under Federal, Minnesota or
Delaware income tax laws, (e) written confirmation from each Rating Agency that
the Exchange will not result in such Rating Agency's reducing or withdrawing its
rating on any then outstanding Series as to which it is a Rating Agency, (f) an
Officer's Certificate of the Transferor, that on the Exchange Date (i) after
giving effect to such Exchange, the Transferor Interest would be at least equal
to the Minimum Transferor Interest, (ii) the Retained Interest would be at least
equal to the Minimum Retained Interest, and (iii) taking into account the
certificates of the newly issued Series, more than 20% (by Invested Amount and
by value) of the outstanding certificates issued by the Trust with respect to
which no Opinion of Counsel was issued that the applicable class would be
treated as debt for federal income tax purposes (including the Transferor
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Certificate and each Transferor Retained Class) shall, by their terms, be
prohibited from being Transferred, (g) the existing Exchangeable Transferor
Certificate or applicable Investor Certificates, as the case may be and (h) such
other documents, certificates and Opinions of Counsel as may be required by the
applicable Supple-ment. Upon satisfaction of such conditions, the Trustee shall
cancel the existing Exchangeable Transferor Certificate or applicable Investor
Certificates, as the case may be, and issue, as provided above, such Series of
Investor Certificates and a new Exchangeable Transferor Certificate, dated the
Exchange Date. There is no limit to the number of Exchanges that may be
performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall execute a
Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include without limitation:
(i) its name or designation, (ii) the Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) the Certificate Rate (or formula
for the determination thereof), (iv) the Closing Date, (v) the rating agency or
agencies rating such Series, (vi) the name of the Clearing Agency, if any, (vii)
the rights of the Holder of the Exchangeable Transferor Certificate that have
been transferred to the Holders of such Series pursuant to such Exchange
(including any rights to allocations of Collections of Imputed Yield Receivables
and Principal Receivables), (viii) the interest payment date or dates and the
date or dates from which interest shall accrue, (ix) the method of allocating
Principal Collections for such Series and the method by which the principal
amount of Investor Certificates of such Series shall amortize or accrete and the
method for allocating Imputed Yield Collections and Defaulted Receivables, (x)
the names of any accounts to be used by such Series and the terms governing the
operation of any such account, (xi) the Series Servicing Fee Percen-tage, (xii)
the Minimum Transferor Interest, (xiii) the Series Termination Date, (xiv) the
terms of any Enhancement with respect to such Series, (xv) the Enhance-ment
Provider, if applicable, (xvi) the base rate applicable to such Series, (xvii)
the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xviii) any deposit into any account provided for
such Series, (xix) the number of Classes of such Series and, if more than one
Class, the rights and priorities of each such Class, (xx) whether any fees will
be included in the funds available to be paid for such Series, (xxi) the
subordination of such Series to any other Series, (xxii) the Pool Factor,
(xxiii) the Minimum Aggregate Principal Receivables, (xxiv) whether such Series
will be a part of a group or subject to being paired with any other Series,
(xxv) whether such Series will be pre-funded, and (xxvi) any other relevant
terms of such Series (including whether or not such Series will be pledged as
collateral for an issuance of any other securities, including commercial paper)
(all such terms, the"Principal Terms" of such Series). The terms of such
Supplement may modify or amend the terms of this Agreement, solely as applied to
such new Series. If on the date of the issuance of such Series there is issued
and outstanding one or more Series of Investor Certificates and no Series of
Investor Certificates is currently rated by a Rating Agency, then as a condition
to such Exchange a nationally recognized investment banking firm or commercial
bank shall also deliver to the Trustee an officer's certificate stating, in
substance, that
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the Exchange will not have an adverse effect on the timing or distribution of
payments to such other Series of Investor Certificates then issued and
outstanding.
(d) The Transferor may surrender the Exchangeable Transferor Certificate to
the Trustee in exchange for a newly issued Exchangeable Transferor Certificate
and a second certificate (a "Supplemental Certificate"), the terms of which
shall be defined in a supplement to this Agreement (which supplement shall be
subject to Section 13.01 hereof to the extent that it amends any of the terms of
this Agree-ment), to be delivered to or upon the order of the Transferor (or a
Person designated by the Transferor, in the case of the transfer or exchange
thereof, as provided below), upon satisfaction of the following conditions: (i)
following such exchange, the Transferor Interest (less any interest therein
represented by any Supplemental Certificates) in the Principal Receivables in
the Trust equals or exceeds the greater of the Minimum Transferor Interest and
the Minimum Retained Interest following such exchange, (ii) following such
exchange the sum of (a) the Transferor Interest (less any interest therein
represented by any Supplemental Certificates) in the Principal Receivables and
(b) the interest in Principal Receivables represented by the Transferor Retained
Certificates equals or exceeds, on the day following such exchange, 20% of the
sum of (x) the Transferor Interest (including any interest there-in represented
by any Supplemental Certificate) and (y) the interest in Principal Receivables
represented by the Transferor Retained Certificates on such date, and (iii) the
Trustee received prior to such exchange (A) a letter from the Rating Agency
stating that the then current ratings on the Investor Certificates of each rated
class of each Series then outstanding will not be reduced or withdrawn because
of the issuance of such Supplemental Certificate and (B) an Opinion of Counsel
to the effect that (i) such Supplemental Certificate will be characterized as
either indebted-ness or a partnership interest for Federal and applicable state
income tax purposes or (ii) that such Supplemental Certificate will not
adversely affect the Federal, Minnesota or Delaware income tax characterization
of any outstanding Series of Investor Certificates or the taxability of the
Trust under Federal, Minnesota or Delaware income tax laws, transferred or
exchanged only upon satisfaction of the conditions set forth in clause (iii)
above.
Section 6.10 Book-Entry Certificates. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depositary specified in such Supplement
(the "Depositary") which shall be the Clearing Agency or Foreign Clearing
Agency, by or on behalf of such Series. The Investor Certificates of each
Series shall, unless otherwise provided in the related Supplement, initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency or Foreign Clearing Agency. No Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
related Series of Investor Certificates, except as provided in Section 6.12.
Unless and until definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to Certificate Owners
pursuant to Section 6.12:
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(i) the provisions of this Section 6.10 shall be in full force and
effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10 conflict
with any other provisions of this Agreement, the provisions of this Section
6.10 shall control with respect to each such Series; and
(iv) the rights of Certificate Owners of Investor Certificates of each
such Series shall be exercised only through the Clearing Agency or Foreign
Clearing Agency and the applicable Clearing Agency Participants and shall
be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depositary
Agreement applicable to a Series, unless and until Definitive Certificates
of such Series are issued pursuant to Section 6.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Investor Certificates to such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency.
Section 6.12 Definitive Certificates. If (i) (A) the Transferor advises
the Trustee in writing that the Clearing Agency or Foreign Clearing Agency is no
longer willing or able to discharge properly its responsibilities under the
applicable Depositary Agreement, and (B) the Transferor is unable to locate a
qualified successor, (ii) the Transferor, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or Foreign Clearing Agency with respect to any Series of Certificates or
(iii) after the occurrence of a Servicer Default, Certificate Owners of a Series
representing beneficial interests aggregating not less than 50% of the Invested
Amount of such Series advise the Trustee and the applicable Clearing Agency or
Foreign Clearing Agency through the applicable Clearing Agency Participants in
writing that the continuation of a book-entry system through the applicable
Clearing Agency or Foreign Clearing Agency is no longer in the best interests of
the Certificate Owners, the Trustee shall notify all
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Certificate Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Series requesting the
same. Upon surrender to the Trustee of the Investor Certificates of such Series
by the applicable Clearing Agency or Foreign Clearing Agency for registration,
accompanied by registration instructions from the applicable Clearing Agency or
Foreign Clearing Agency, the Trustee shall issue the Definitive Certificates of
such Series. Neither the Transferor nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates of such Series, all references herein to obligations imposed upon
or to be performed by the applicable Clearing Agency or Foreign Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the Trustee shall
recognize the Holders of the Definitive Certificates of such Series as
Certificateholders of such Series hereunder.
Section 6.13 Global Certificate; Euro-Certificate Exchange Date. If
specified in the related Supplement for any Series, the Investor Certificates
may be initially issued in the form of a single temporary Global Certificate
(the "Global Certificate") in bearer form, without interest coupons, in the
denomination of the Initial Invested Amount of such Series and substantially in
the form attached to the related Supplement. Unless otherwise specified in the
related Supplement, the provisions of this Section 6.13 shall apply to such
Global Certificate. The Global Certificate will be authenticated by the Trustee
upon the same conditions, in substantially the same manner and with the same
effect as the Definitive Certificates. The Global Certificate may be exchanged
in the manner described in the related Supplement for Registered Certificates or
Bearer Certificates in definitive form.
Section 6.14 Meetings of Certificateholders.
To the extent provided by the Supplement for any Series issued in whole or
in part in Bearer Certificates, the Servicer or the Trustee may at any time call
a meeting of the Certificateholders of such Series, to be held at such time and
at such place as the Servicer or the Trustee, as the case may be, shall
determine, for the purpose of approving a modification of or amendment to, or
obtaining a waiver of, any covenant or condition set forth in this Agreement
with respect to such Series or in the Certificates of such Series, subject to
Section 13.1 of this Agreement.
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ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
----------------------------------------
Section 7.1 Liability of the Transferor. The Transferor shall be liable
in accordance herewith solely to the extent of the obligations specifically
undertaken by the Transferor.
Section 7.2 Merger or Consolidation of or Assumption of the Obligations of
the Transferor.
(a) The Transferor shall not consolidate with or merge into any other
business entity or convey or transfer its properties and assets substantially as
an entirety to any Person, unless:
(i) the business entity formed by such consolidation or into which the
Transferor is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Transferor substantially as an entirety
shall be, if the Transferor is not the surviving entity, organized and
existing under the laws of the United States of America or any State or the
District of Columbia and such Person shall assume, without the execution or
filing of any paper or any further act on the part of the parties hereto,
the performance of every covenant and obligation of the Transferor, as
applicable hereunder and shall benefit from all the rights granted to the
Transferor, as applicable hereunder. To the extent that any right,
covenant or obligation of the Transferor, as applicable hereunder, is
inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity. In
furtherance hereof, in applying this Section 7.2 to a successor entity,
Section 9.2 hereof shall be applied by reference to events of involuntary
liquidation, receivership or conservatorship applicable to such successor
entity as shall be set forth in the officer's certificate described in
subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered to the Trustee an Officer's
Certificate signed by a Vice President (or any more senior officer) of the
Transferor stating that such consolidation, merger, conveyance or transfer
and such supplemental agreement comply with this Section 7.2 and that all
conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding and that the entity surviving such
consolidation, conveyance or transfer is organized and existing under the
laws of the United States of America or any State or the District of
Columbia and, subject to customary limitations and qualifications, such
entity will not be substantively consolidated with Green Tree or the
Servicer;
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(iii) the Transferor shall have delivered notice to the Rating Agency
of such consolidation, merger, conveyance or transfer and the Rating Agency
shall have provided written confirmation that such consolidation, merger,
conveyance or transfer will not result in the Rating Agency reducing or
withdrawing its rating on any then outstanding Series as to which it is a
Rating Agency;
(iv) the successor entity shall be a special purpose bankruptcy remote
entity; and
(v) if the Transferor is not the surviving entity, the surviving
entity shall file new UCC-1 financing statements with respect to the
interest of the Trust in the Receivables.
(b) The obligations of the Transferor hereunder shall not be assignable nor
shall any Person succeed to the obligations of the Transferor hereunder except
for mergers, consolidations, assumptions or transfers in accordance with the
provisions of the foregoing paragraph.
Section 7.3 Limitation on Liability. The directors, officers, employees
or agents of the Transferor shall not be under any liability to the Trust, the
Trustee, the Certificateholders, any Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the officers, directors, employees, or agents of the
Transferor against any liability which would otherwise be imposed upon them by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of their obligations and duties
hereunder. Except as provided in Sections 7.1 and 7.4 with respect to the Trust
and the Trustee and its officers, directors, employees and agents, the
Transferor shall not be under any liability to the Trust, the Trustee, its
officers, directors, employees and agents, the Certificateholders, any
Enhancement Provider or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Transferor pursuant to this
Agreement or any Supplement whether arising from express or implied duties
under this Agreement or any Supplement or otherwise; provided, however, that
this provision shall not protect the Transferor against any liability which
would otherwise be imposed upon it by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of its obligations and duties hereunder. The Transferor and any
director, officer, employee or agent may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3, by entering into
this Agreement, the Transferor agrees to be liable, directly to the injured
party, for the
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entire amount of any losses, claims, damages, penalties or liabilities (other
than those incurred by a Certificateholder in the capacity of an investor in the
Investor Certificates as a result of the performance of the Receivables, market
fluctuations, a shortfall or failure by the Enhancement Provider to make payment
under any Enhancement or other similar market or investment risks associated
with ownership of the Investor Certificates) arising out of or based on the
arrangement created by this Agreement and the actions of the Servicer taken
pursuant hereto as though this Agreement created a partnership under the
Delaware Uniform Partnership Law, in which the Transferor is a general partner.
The Transferor agrees to pay, indemnify and hold harmless each Investor
Certificateholder against and from any and all such loses claims, damages and
liabilities (other than those incurred by a Certificateholder in the capacity of
an investor in the Investor Certificates as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure by an Enhancement
Provider to make payment under an Enhancement or other similar market or
investment risks) except to the extent that they arise from any action by such
Investor Certificateholder. Subject to Sections 8.3 and 8.4, in the event of a
Service Transfer, the Successor Servicer will indemnify and hold harmless the
Transferor for any losses claims damages and liabilities of the Transferor as
described in this Section 7.4 arising from the actions or omissions of such
Successor Servicer.
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ARTICLE VIII
OTHER MATTERS RELATING
----------------------
TO THE SERVICER
---------------
Section 8.1 Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of or Assumption of the Obligations of
the Servicer. Subject to subsection 3.1(a), the Servicer shall not consolidate
with or merge into any other corporation or convey or transfer its properties
and assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an entirety
shall be a corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia and, if the
Servicer is not the surviving entity, such Person shall assume, without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, the performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right, covenant or obligation of
the Servicer, as applicable hereunder, is inapplicable to the successor
entity, such successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to the extent
practicable, to such successor entity); and
(ii) the Servicer shall have delivered to the Trustee an Officer's
Certificate that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 8.2 and that all
conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding with respect to the Servicer and that
the entity surviving such consolidation, conveyance or transfer is
organized and existing under the laws of the United States of America or
any State or the District of Columbia; and
(iii) the Servicer shall have delivered notice to the Rating Agency of
such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation on Liability of the Servicer and Others. The
directors, officers, employees or agents of the Servicer shall not be under any
liability to the Trust, the Trustee, the Certificateholders, any Enhancement
Provider or any other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution
of this Agreement and any
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Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the directors, officers, employees and agents of the
Servicer against any liability which would otherwise be imposed upon them by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of their obligations and duties
hereunder. Except as provided in Sections 8.1 and 8.4 with respect to the
Trustee, its officers, directors, employees and agents, the Servicer shall not
be under any liability to the Trust, the Trustee, its officers, directors,
employees and agents, the Certificateholders, any Enhancement Provider or any
other Person for any action taken or for refraining from the taking of any
action in its capacity as Servicer pursuant to this Agreement or any Supplement;
provided, however, that this provision shall not protect the Servicer against
any liability which would otherwise be imposed upon it by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of its reckless disregard of its obligations and duties hereunder or
under any Supplement. The Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Receivables in accordance with this Agreement which in its
reasonable opinion may involve it in any expense or liability.
Section 8.4 Servicer Indemnification of the Transferor, the Trust and the
Trustee. Subject to the limitations on liability set forth in Section 8.3, the
Servicer shall indemnify and hold harmless the Transferor, the Trustee and the
Trust (each, an "Indemnified Party") from and against any loss, liability,
reasonable expense, damage or injury, including, but not limited to, any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim, suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee for which the Servicer is responsible
pursuant to this Agreement; provided, however, that the Servicer shall not
indemnify or hold harmless an Indemnified Party if such acts, omissions or
alleged acts or omissions constitute or are caused by fraud, gross negligence,
or willful misconduct by such Indemnified Party (or any of such Indemnified
Party's officers, directors, employees or agents) or the Investor
Certificateholders; provided, further, that the Servicer shall not indemnify or
hold harmless the Trust, the Investor Certificateholders or the Certificate
Owners for any losses, liabilities, expenses, damages or injuries suffered or
sustained by any of them with respect to any action taken by the Trustee at the
request of the Investor Certificateholders; provided, further, that the Servicer
shall not indemnify or hold harmless the Trust, the Investor Certificateholders
or the Certificate Owners as to any losses, liabilities, expenses, damages or
injuries suffered or sustained by any of them in their capacities as investors,
including without limitation losses incurred as a result of Defaulted
Receivables; provided, further, that the Servicer shall not indemnify or hold
harmless the Transferor, the Trust, the Investor Certificateholders or the
Certificate Owners for any losses, liabilities, expenses, damages or injuries
suffered
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or sustained by the Trust, the Investor Certificateholders or the Certificate
Owners arising under any tax law, including without limitation, any federal,
state, local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest, penalties or additions with respect thereto
or arising from a failure to comply therewith) required to be paid by the Trust,
the Investor Certificateholders or the Certificate Owners in connection
herewith to any taxing authority; and, provided, further, that in no event will
the Servicer be liable, directly or indirectly, for or in respect of any
indebtedness or obligation evidenced or created by any Certificate, recourse as
to which shall be limited solely to the assets of the Trust allocated for the
payment thereof as provided on this Agreement and any applicable Supplement. Any
such indemnification shall not be payable from the assets of the Trust, but the
Servicer shall be subrogated to the rights of the Trust with respect to the
foregoing matters if and to the extent that the Servicer shall have indemnified
the Trust with respect thereto. The Servicer shall indemnify and hold harmless
the Trustee and its officers, directors, employees or agents from and against
any loss, liability, reasonable expense, damage or injury suffered or sustained
by reason of the acceptance of this Trust by the Trustee, the issuance by the
Trust of the Certificates or any of the other matters contemplated herein or in
any Supplement; provided, however, that the Servicer shall not indemnify the
Trustee or its officers, directors, employees or agents for any loss, liability,
expense, damage or injury caused by the fraud, negligence or willful misconduct
of any of them. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof and shall
survive the resignation or removal of the Servicer, the resignation or removal
of the Trustee and/or the termination of the Trust and shall survive the
termination of the Agreement.
Section 8.5 The Servicer Not to Resign. Subject to subsection 3.1(a), the
Servicer shall not resign from the obligations and duties hereby imposed on it
except upon determination that (i) the performance of its duties hereunder is no
longer permissible under applicable law and (ii) there is no reasonable action
which the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel 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 10.2 hereof. If the Trustee is unable within 120 days of the date of
delivery to it of such Opinion of Counsel to appoint a Successor Servicer, the
Trustee shall serve as Successor Servicer hereunder (but shall have continued
authority to appoint another Person as Successor Servicer).
Section 8.6 Access to Certain Documentation and Information Regarding the
Receivables. The Servicer shall provide to the Trustee and its agents (who shall
be reasonably acceptable to the Servicer) access to the documentation regarding
the Receivables in such cases where the Trustee is required in connection with
the enforcement of the rights of the Investor Certificateholders, or by
applicable statutes or regulations, to review such documentation, such access
being afforded without
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charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to the Servicer's normal security and confidentiality procedures
and (iv) at offices designated by the Servicer. Nothing in this Section 8.6
shall derogate from the obligation of the Transferor, the Trustee or the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Dealers, and the failure of the Servicer to provide access as
provided in this Section 8.6 as a result of such obligations shall not
constitute a breach of this Section 8.6.
Section 8.7 Delegation of Duties. In the ordinary course of business, the
Servicer may at any time delegate any duties hereunder to any Person who agrees
to conduct such duties in accordance with the Servicer's usual and customary
collection procedures. Any such delegations shall not relieve the Servicer of
its liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.5 hereof and the
Servicer will remain jointly and severally liable with such Person for any
amounts which would otherwise be payable pursuant to this Article VIII as if the
Servicer had performed such duty; provided, however, that in the case of any
significant delegation to a Person other than an Affiliate of Green Tree (i)
written notice shall be given to the Trustee and to each Rating Agency of such
delegation, (ii) the Transferor should not have received written notice from
Moody's that such delegation would result in the lowering or withdrawal of its
then existing rating of any Series or Class of Investor Certificates and (iii)
the Transferor shall not have received written notice from Standard & Poor's
that such delegation would result in the lowering or withdrawal of its then
existing rating of any Series or Class of Investor Certificates.
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ARTICLE IX
PAY OUT EVENTS
--------------
Section 9.1 Pay Out Events. If any one of the following events (each, a
"Trust Pay Out Event") shall occur:
(a) a failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within five Business Days after the day on which it is
required to convey such Receivables pursuant to this Agreement;
(b) the Transferor or the Servicer (or Green Tree, if it is not the
Servicer) shall file a petition commencing a voluntary case under any chapter of
the Federal bankruptcy laws; or the Transferor or the Servicer (or Green Tree,
as aforesaid) shall file a petition or answer or consent seeking reorganization,
arrangement, adjustment, or composition under any other similar applicable
Federal law, or shall consent to the filing of any such petition, answer, or
consent; or the Transferor or the Servicer (or Green Tree, as aforesaid), shall
appoint, or consent to the appointment of, a custodian, receiver, liquidator,
trustee, assignee, sequestrator or other similar official in bankruptcy or
insolvency of it or of any substantial part of its property; or the Transferor
or the Servicer (or Green Tree, as aforesaid), shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due;
(c) any order for relief against the Transferor or the Servicer (or Green
Tree, if it is not the Servicer), shall have been entered by a court having
jurisdiction in the premises under any chapter of the Federal bankruptcy laws,
and such order shall have continued undischarged or unstayed for a period of 60
days; or a decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of the Transferor or the Servicer (or
Green Tree, as aforesaid), under any other similar applicable Federal law, and
such decree or order shall have continued undischarged or unstayed for a period
of 120 days; or a decree or order of a court having jurisdiction in the premises
for the appointment of a custodian, receiver, liquidator, trustee, assignee,
sequestrator, or other similar official in bankruptcy or insolvency of the
Transferor or the Servicer (or Green Tree, as aforesaid), or of any substantial
part of its property or for the winding up or liquidation of its affairs, shall
have been entered, and such decree or order shall have remained in force
undischarged or unstayed for a period of 120 days;
(d) failure on the part of the Transferor or the Servicer (or Green Tree,
as applicable), (i) to make any payment or deposit (including any Transfer
Deposit Amount or Adjustment Payment) required by the terms of this Agreement or
the Purchase Agreement on or before the date occurring five Business Days after
the date such payment or deposit is required to be made herein, or (ii) with
respect to any Series, to deliver a Distribution Date Statement within ten
Business Days after
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notice from the Trustee of such failure to deliver such Distribution Date
Statement, or (iii) duly to observe or perform in any material respect the
covenant of the Transferor set forth in Section 2.5(a) with respect to a
Receivable, which failure, in the case of this clause (iii), has a material
adverse effect on the interests of the Holders of the Investor Certificates and
continues unremedied for a period of 60 days after the date on which notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee or any Enhancement Provider; provided, however, that a
Pay Out Event shall not be deemed to have occurred if the Transferor shall have
repurchased the related Receivables or, if applicable, all of the Receivables
during such period in accordance with the provisions of this Agreement; or (iv)
duly to observe or perform in any material respect any other covenants or
agreements of the Transferor or the Servicer or Green Tree, as the case may be,
set forth in this Agreement or the Purchase Agreement, which failure in the case
of this clause (iv) has a material adverse effect on the interests of the
Holders of the Investor Certificates and continues unremedied for a period of 45
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Transferor by the Trustee or to the
Transferor and the Trustee by any Enhancement Provider;
(e) any representation or warranty made by Green Tree in the Purchase
Agreement or the Transferor in this Agreement or any information contained in a
computer file or microfiche or written list required to be delivered by the
Transferor pursuant to Section 2.1, 2.6, 2.7 or 2.8, (i) shall prove to have
been incorrect in any material respect when made or when delivered, and shall
continue to be incorrect in any material respect for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor by the Trustee and (ii) as a
result of such incorrectness the interests of the Holders of the Investor
Certificates are materially and adversely affected (excluding, however, the
representation and warranty made by the Transferor pursuant to Section 2.3(j) if
the Agreement constitutes the grant of a perfected security interest in the
Receivables and the Collateral Security and the proceeds thereof under the UCC
as then in effect in the State of Minnesota transferred to the Trust hereunder);
provided, however, that a Pay Out Event shall not be deemed to have occurred
under this paragraph if the Transferor has repurchased the related Receivable or
all such Receivables, if applicable, during such period in accordance with the
provisions of this Agreement; or
(f) the Trust or the Transferor shall become an "investment company"
within the meaning of the Investment Company Act;
then, subject to applicable law, and after the applicable grace period, if any,
an amortization event (a "Pay Out Event") shall occur without any notice or
other action on the part of the Trustee, any Agent, the Certificateholders or
any other Beneficiary, immediately upon the occurrence of such event.
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Section 9.2 Additional Rights Upon the Occurrence of Certain Events.
(a) If (x) the Transferor shall consent to the appointment of a bankruptcy
trustee or receiver or liquidator for the winding-up or liquidation of its
affairs, or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a bankruptcy trustee
or receiver or liquidator for the winding-up or liquidation of its affairs shall
have been entered against the Transferor (an "Insolvency Event"), on the day of
such Insolvency Event (the "Appointment Day") or (y) the Retained Percentage
shall at any time be equal to or lest than 2% (a "Trigger Event"), the following
actions shall be taken and processes begun:
(i) If an Insolvency Event shall have occurred, the Transferor shall
immediately cease to transfer Receivables to the Trust and shall promptly give
written notice to the Trustee of such Insolvency Event. Notwithstanding any
cessation of the transfer to the Trust of additional Receivables, Receivables
transferred to the Trust prior to the occurrence of such Insolvency Event and
Receivables transferred to the Trust prior to the occurrence of such Insolvency
Event and Collections with respect thereto shall continue to be a part of the
Trust and will be a part of the Trust and will be allocated and paid in
accordance with Article IV.
(ii) If an Insolvency Event or a Trigger Event shall have occurred this
Agreement and the Trust shall be deemed to have terminated, subject to the
liquidation, winding-up and dissolution procedures described below; provided,
however, that within 15 days of the date of written notice to the Trustee, the
Trustee shall (i) publish a notice in an Authorized Newspaper that an Insolvency
Event or a Trigger Event has occurred, that the Trust has terminated, and that
the Trustee intends to sell, dispose of or otherwise liquidate the Receivables
pursuant to this Agreement in a commercially reasonable manner and on
commercially reasonable terms, which shall include the solicitation of
competitive bids (a "Disposition"), and (ii) send written notice to the Investor
Certificateholders describing the provisions of this Section 9.2 and requesting
each Investor Certificateholder to advise the Trustee in writing that it elects
one of the following options: (A) the Investor Certificateholder wishes the
Trustee to instruct the Servicer not to effectuate a Disposition, or (B) the
Investor Certificateholder refuses to advise the Trustee as to the specific
action the Trustee shall instruct the Servicer to take, or (C) the Investor
Certificateholder wishes the Servicer to effect a Disposition. If after 90 days
from the day notice pursuant to clause (i) above is first published (the
"Publication Date"), the Trustee shall not have received the written instruction
described in clause (A) above from Holders of Investor Certificates representing
Undivided Interests aggregating in excess of 50% of the related Invested Amount
of each Series (or, in the case of a Series having more than one Class, each
Class of such Series) and the holders of any Supplemental Certificates or any
other interest in the Exchangeable Transferor Certificate other than the
Transferor as provided in Section 6.3(b) for each Series, (a "Holders'
Majority"), the Trustee shall instruct the Servicer to effectuate a
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Disposition, and the Servicer shall proceed to consummate a Disposition. If,
however, with respect to the portion of the Receivables allocable to any
outstanding Series, a Holders' Majority instruct the Trustee not to effectuate a
Disposition of the portion of the Receivables allocable to such Series, the
Trust shall be reconstituted and continue with respect to such Series pursuant
to the terms of this Agreement and the applicable Supplement (as amended in
connection with such reconstitution). The portion of the Receivables allocable
to any Series shall be equal to the sum of (1) the product of (A) the Transferor
Percentage, (B) the aggregate outstanding Principal Receivables and (C) a
fraction, the numerator of which is the related Investor Percentage of Imputed
Yield Collections and the denominator of which is the sum of all Investor
Percentages with respect to Imputed Yield Collections for all Series outstanding
and (2) the Invested Amount of such Series. The Transferor or any of its
Affiliates shall be permitted to bid for the Receivables. In addition, the
Transferor or any of its Affiliates shall have the right to match any bid by a
third person and be granted the right to purchase the Receivables at such
matched bid price. The Trustee may obtain a prior determination from any such
bankruptcy trustee, receiver or liquidator that the terms and manner of any
proposed Distribution are commercially reasonable. The provisions of Sections
9.1 and 9.2 shall not be deemed to be mutually exclusive.
(b) The proceeds from the Disposition pursuant to subsection (a) above
shall be treated as Collections on the Receivables and shall be allocated and
deposited in accordance with the provisions of Article IV; provided, however,
that the proceeds from a Disposition with respect to any Series shall be applied
solely to make payments to such Series; provided, further, that the Trustee
shall determine conclusively in its sole discretion the amount of such proceeds
that are allocable to Imputed Yield Collections and the amount of such proceeds
that are allocable to Collections of Principal Receivables. Unless the Trustee
receives written instructions from Investor Certificateholders of one or more
Series to continue the Trust with respect to such Series as provided in
subsection 9.2(a) above, on the day following the last Distribution Date in the
Monthly Period during which such proceeds are distributed to the Investor
Certificateholders of each Series, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive bids.
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ARTICLE X
SERVICER DEFAULTS
-----------------
Section 10.1 Servicer Defaults. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or deposit
or to give instructions or notice to the Trustee pursuant to Article IV or to
instruct the Trustee to make any required drawing, withdrawal, or payment under
any Enhancement on or before the date occurring five Business Days after the
date such payment, transfer, deposit, withdrawal or drawing or such instruction
or notice is required to be made or given, as the case may be, under the terms
of this Agreement; provided, however, that any such failure caused by a non-
willful act of the Servicer shall not constitute a Servicer Default if the
Servicer promptly remedies such failure within five Business Days after
receiving notice of such failure or otherwise becoming aware of such failure;
(b) failure on the part of the Servicer duly to observe or perform in any
respect any other covenants or agreements of the Servicer set forth in this
Agreement, which has a material adverse effect on the Investor
Certificateholders of any Series and which continues unremedied for a period of
60 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, or to
the Servicer and the Trustee by the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 50% of the Invested Amount of any
Series materially adversely affected thereby and continues to materially
adversely affect such Investor Certificateholders for such period;
(c) any representation, warranty or certification made by the Servicer in
this Agreement or in any certificate delivered pursuant to this Agreement shall
prove to have been incorrect when made, which has a material adverse effect on
the Investor Certificateholders of any Series and which continues to be
incorrect in any material respect for a period of 60 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, or to the Servicer and the
Trustee by the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 50% of the Invested Amount of any Series materially
adversely affected thereby and continues to materially adversely affect such
Investor Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a bankruptcy trustee
or receiver or liquidator in any bankruptcy proceeding or any other insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or
substantially all of its property; or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a bankruptcy trustee or receiver or liquidator in
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any bankruptcy proceeding or any other insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer, and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or the Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make any
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested Amount, by notice then given
in writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement. After receipt
by the Servicer of such Termination Notice, and on the date that a Successor
Servicer shall have been appointed by the Trustee pursuant to Section 10.2, all
authority and power of the Servicer under this Agreement shall pass to and be
vested in a Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the Servicer
to execute or deliver such documents or instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the purposes of
such transfer of servicing rights and obligations. The Servicer agrees to
cooperate with the Trustee and such Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, the Excess Funding Account, the Interest Funding Account or the
Principal Account, and any Series Account, or which shall thereafter be received
with respect to the Receivables. The Servicer shall promptly transfer its
electronic records or electronic copies thereof relating to the Receivables to
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.1 shall require the Servicer to disclose to the Successor Servicer
information of any kind which the Servicer deems to be confidential, the
Successor Servicer shall be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary to protect its
interests. The Servicer shall, on the date of any servicing transfer, transfer
all of its rights and obligations under the Enhancement with respect to any
Series to the Successor Servicer. In connection with any service transfer, all
reasonable costs and expenses (including
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attorneys' fees) incurred in connection with transferring the records,
correspondence and other documents with respect to the Receivables and the other
Trust Property to the Successor Servicer and amending this Agreement to reflect
such succession as Successor Servicer pursuant to this Section 10.1 and Section
10.2 shall be paid by the Servicer (unless the Trustee is acting as the Servicer
on a temporary basis, in which case the original Servicer shall be responsible
therefor) upon presentation of reasonable documentation of such costs and
expenses.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.1(a) for a period of five Business Days or under
subsection 10.1(b) or (c) for a period of 60 days, shall not constitute a
Servicer Default if such delay or failure could not be prevented by the exercise
of reasonable diligence by the Servicer and such delay or failure was caused by
an act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages, bank closings, communications outages, computer failure or
similar causes. The preceding sentence shall not relieve the Servicer from
using its best efforts to perform its obligations in a timely manner in
accordance with the terms of this Agreement and the Servicer shall provide the
Trustee, any Enhancement Provider, the Transferor and the Holders of Investor
Certificates with an Officer's Certificate giving prompt notice of such failure
or delay by it, together with a description of the cause of such failure or
delay and its efforts so to perform its obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or as otherwise specified by the Trustee in writing or, if no such date
is specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee
shall notify each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Termination Notice, appoint
a successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Trustee. If such Successor Servicer is unable to accept such appointment, the
Trustee may obtain bids from any potential successor servicer. If the Trustee
is unable to obtain any bids from any potential successor servicer and the
Servicer delivers an Officer's Certificate to the effect that it cannot in good
faith cure the Servicer Default which gave rise to a transfer of servicing, and
if the Trustee is legally unable to act as Successor Servicer, then the Trustee
shall offer the Transferor the right to accept reassignment of all of the
Receivables for an amount equal to the Aggregate Invested Amount on the date of
such purchase alas all interest accrued but unpaid on all of the outstanding
Investor Certificates at the applicable Certificate Rate through the date of
such purchase; provided, however, that no such purchase by the Transferor shall
occur unless the
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Transferor shall deliver an Opinion of Counsel reasonably acceptable to the
Trustee that such purchase would not constitute a fraudulent conveyance of the
Transferor. The proceeds of such sale shall be deposited in the Distribution
Account or any Series Account, as provided in the related Supplement, for
distribution to the Investor Certificateholders of each outstanding Series
pursuant to Section 12.3 of the Agreement. In the event that a Successor
Servicer has not been appointed and has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Trustee without further action
shall automatically be appointed the Successor Servicer (but shall have
continued authority to appoint another Person as Successor Servicer). The
Trustee may delegate any of its servicing obligations to an affiliate or agent
of the Trustee in accordance with Article III hereof. Any such delegations
shall not relieve the Trustee of its liability and responsibility with respect
to such duties. Notwithstanding the above, the Trustee shall, if it is legally
unable to act, petition a court of competent jurisdiction to appoint any
established financial institution having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of receivables similar to the
Receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer. Any Successor Servicer, by its acceptance of
its appointment, will automatically agree to be bound by the terms and
provisions of each Enhancement.
(c) In connection with such appointment and assumption, the Trustee shall
be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Servicing Fee permitted to the Servicer pursuant to
Section 3.2. The Transferor agrees that if the Servicer is terminated
hereunder, it will agree to deposit a portion of the Collections in respect of
Imputed Yield Receivables that it is entitled to receive pursuant to Article IV
to pay its ratable share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under this
Agreement shall automatically cease and terminate upon termination of the Trust
pursuant to Section 12.1 and shall pass to and be vested in the Transferor and,
without limitation, the Transferor is hereby authorized and empowered to execute
and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Transferor in effecting the
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termination of the responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. The Successor Servicer shall transfer its
electronic records relating to the Receivables to the Transferor in such
electronic form as the Transferor may reasonably request and shall transfer all
other records, correspondence and documents to the Transferor in the manner and
at such times as the Transferor shall reasonably request. To the extent that
compliance with this Section 10.2 shall require the Successor Servicer to
disclose to the Transferor information of any kind which the Successor Servicer
deems to be confidential, the Transferor shall be required to enter into such
customary licensing and confidentiality agreements as the Successor Servicer
shall deem necessary to protect its interests.
Section 10.3 Notification to Certificateholders. Upon the Servicer
becoming aware of any Servicer Default, the Servicer shall give prompt written
notice thereof to the Trustee and any Enhancement Provider and, upon receipt of
such written notice, the Trustee shall give notice to the Investor
Certificateholders at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor Servicer pursuant
to this Article X, the Trustee shall give prompt written notice thereof to
Investor Certificateholders at their respective addresses appearing in the
Certificate Register.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Invested Amount of each Series materially adversely affected by any default
by the Servicer or Transferor may, on behalf of all Certificateholders of such
Series, waive any default by the Servicer or Transferor in the performance of
its obligations hereunder and its consequences, except a default in the failure
to make any required deposits or payments of interest or principal relating to
such Series pursuant to Article IV, which default does not result from the
failure of the Paying Agent to perform its obligations to make any required
deposits or payments of interest and principal in accordance with Article IV.
Upon any such waiver of a past default, such default shall cease to exist, and
any default 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 except to the extent
expressly so waived.
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ARTICLE XI
THE TRUSTEE
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Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer Default of which a
Responsible Officer of the Trustee has actual knowledge and after the curing of
all Servicer Defaults which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement, and no
implied covenants or duties shall be read into this Agreement against the
Trustee. If a Responsible Officer has received written notice that a Servicer
Default has occurred (and such Servicer Default has not been cured or waived),
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 its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs; provided, however, that if the Trustee shall assume
the duties of the Servicer pursuant to Section 8.5 or 10.2, the Trustee in
performing such duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to comparable receivables that it services
for itself or others.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they substantially
conform to the requirements of this Agreement. The Trustee shall retain all
such items for at least one year after receipt and shall make such items
available for inspection by any Investor Certificateholder at the Corporate
Trust Office, such inspection to be made during regular business hours and upon
reasonable prior notice to the Trustee.
(c) Subject to subsection 11.1(a), 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 or its own misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) 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 Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested
Amount of any Series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to such
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Series, or exercising any trust or power conferred upon the Trustee with
respect to such Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any failure
by the Servicer referred to in clauses (a) and (b) of Section 10.1 or of
any breach by the Servicer contemplated by clause (c) of Section 10.1 or
any Pay Out Event unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure, breach or Pay Out Event or the Trustee
receives written notice of such failure, breach or Pay Out Event from the
Servicer or any Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 10% of the Invested Amount of any
Series adversely affected thereby.
(d) 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, and
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 if, any
of the obligations of 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.
(e) Except for actions expressly authorized by this Agreement, the Trustee
shall take no action reasonably likely to impair the interests of the Trust in
any Receivable now existing or hereafter created or to impair the value of any
Receivable now existing or hereafter created.
(f) Except as provided in this Agreement, the Trustee shall have no power
to vary the corpus of the Trust.
(g) If a Responsible Officer of the Trustee has received written notice
that the Paying Agent or the Transfer Agent and Registrar shall fail to perform
any obligation, duty or agreement in the manner or on the day required to be
performed by the Paying Agent or the Transfer Agent and Registrar, as the case
may be, under this Agreement, the Trustee shall be obligated promptly upon its
obtaining knowledge thereof by a Responsible Officer of the Trustee to perform
such obligation, duty or agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its wholesale
receivables (other than the Receivables) to another Person, upon the written
request of the Transferor, the Trustee on behalf of the Trust will enter into
such intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the Trust
and such other Person in the Transferor's wholesale receivables; provided,
however, that the Trust shall not be required to enter into any intercreditor
agreement that could adversely affect the
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interests of the Certificateholders or the Trustee and, upon the request of the
Trustee, the Transferor will deliver an Opinion of Counsel on any matters
relating to such intercreditor agreement, reasonably requested by the Trustee.
Section 11.2 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accordance with, the initial report, the Daily Report,
the Settlement Statement, the Annual Servicer's Certificate, the monthly payment
instructions and notification to the Trustee, the monthly Certificateholder's
statement, any resolution, Officer's Certificate, 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 to it pursuant to this Agreement by
the proper party or parties;
(b) the Trustee may consult with counsel, and the advice or any Opinion of
Counsel 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 advice or 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 any Enhancement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at the
request, order or direction of any of the Certificateholders or any Enhancement
Provider, pursuant to the provisions of this Agreement, unless such
Certificateholders or Enhancement Provider shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligations, upon the occurrence of any
Servicer Default (which has not been cured or waived) of which a Responsible
Officer of the Trustee has knowledge, to exercise such of the rights and powers
vested in it by this Agreement and any Enhancement, and to use the same degree
of care and skill in its exercise as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any investigation into the facts
of matters stated in the initial report, the Daily Report, the Settlement
Statement, the Annual Servicer's Certificate, the monthly payment instructions
and notification to the Trustee, the monthly Certificateholder's statement, 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
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Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Invested Amount of any Series which could be adversely affected
if the Trustee does not perform such acts;
(f) 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 the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed with due care by it hereunder;
(g) except as may be required by subsection 11.1(a), the Trustee shall not
be required to make any initial or periodic examination of any documents or
records related to the Receivables for the purpose of establishing the presence
or absence of defects, the compliance by the Transferor with its representations
and warranties or for any other purpose;
(h) whenever in the administration of this Agreement the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate; and
(i) the right of the Trustee to perform any discretionary act enumerated in
this Agreement or any Supplement shall not be construed as a duty, and the
Trustee shall not be answerable for performance of any such act.
Section 11.3 Trustee Not Liable for Recitals in Certificates. The Trustee
assumes no responsibility for the correctness of the recitals contained herein
and in the Certificates (other than the certificate of authentication on the
Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Receivable or related document. The Trustee shall not be accountable
for the use or application by the Transferor of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to the Transferor in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Excess Funding Account, the Principal
Account or the Interest Funding Account, or any Series Account or other accounts
now or hereafter established to effectuate the transactions contemplated herein
and in accordance with the terms hereof. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or Lien granted to it hereunder (unless the Trustee shall have
become the Successor Servicer) or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Supplement.
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Section 11.4 Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Investor Certificates
and may deal with the Transferor, the Servicer or any Enhancement Provider with
the same rights as it would have if it were not the Trustee. The Trustee in its
capacity as Trustee shall exercise its duties and responsibilities hereunder
independent of and without reference to its investment, if any, in Investor
Certificates.
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by the Trustee in the execution of
the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, subject to Section 8.4, the
Servicer will pay or reimburse the Trustee (without reimbursement from any
Investor Account, any Series Account or otherwise) upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable fees and expenses of its agents and counsel) except any such expense,
disbursement or advance as may arise from its own negligence or bad faith and
except as provided in the following sentence. If the Trustee is appointed
Successor Servicer pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made or incurred by the
Trustee in its capacity as Successor Servicer (which shall be covered out of the
Servicing Fee).
The obligations of the Servicer under this Section 11.5 shall survive the
termination of the Trust and the resignation or removal of the Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times (a) be a corporation organized and doing business under the
laws of the United States of America or any state thereof authorized under such
laws to exercise corporate trust powers, having a long-term unsecured debt
rating of at least Baa3 by Moody's, having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital adequacy requirements, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority and (b) not be a Related Person. If such corporation publishes
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 11.6, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 11.6, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 11.7.
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Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Servicer. Upon receiving
such notice of resignation, the Servicer shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted such
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.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.6 hereof and shall fail to resign after
written request therefor by the Transferor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and 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.
(c) If (i) the Trustee shall fail to perform any of its obligations
hereunder, (ii) a Certificateholder shall deliver written notice of such failure
to the Trustee, and (iii) the Trustee shall not have corrected such failure for
60 days thereafter, then the Holders of Investor Certificates representing more
than 50% of the Invested Amount shall have the right to remove the Trustee and
(with the consent of the Transferor, which shall not be unreasonably withheld)
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.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee. Notice of any
resignation or removal of the Trustee and appointment of a successor trustee
shall be provided to Moody's and Standard & Poor's by the Servicer in a prompt
manner.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Transferor 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
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vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor trustee all documents and
statements held by it hereunder, and the Transferor 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.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section 11.8, such successor trustee shall mail notice of such succession
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register.
Section 11.9 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 all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.6 hereof, 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.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) 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 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 Certificateholders, such title to the trust,
or any part thereof, and, subject to the other provisions of this Section 11.10,
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
11.6 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8 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:
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(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 laws 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 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 XI. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as 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 to 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 11.11 Tax Returns. Consistent with Section 3.7, the Trustee shall
not file any Federal tax returns on behalf of the Trust; provided, however, that
if a class of Certificates is issued that will be characterized as a partnership
for federal income tax purposes, partnership information returns shall be
prepared and signed by the Transferor, as general partner. In the event the
Trust shall be required to file tax returns, the Servicer shall at its expense
prepare or cause to be prepared any tax returns required to be filed by the
Trust and, to the extent possible, shall remit such
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returns to the Trustee for signature at least five days before such returns are
due to be filed. The Trustee is hereby authorized to sign any such return on
behalf of the Trust. The Servicer shall prepare or shall cause to be prepared
all tax information required by law to be distributed to Certificateholders and
shall deliver such information to the Trustee at least five days prior to the
date it is required by law to be distributed to Certificateholders. The Trustee,
upon request, will furnish the Servicer with all such information known to the
Trustee as may be reasonably required in connection with the preparation of all
tax returns of the Trust and shall, upon request, execute such return. In no
event shall the Trustee be liable for any liabilities, costs or expenses of the
Trust, the Investor Certificateholders or the Certificate Owners arising under
any tax law, including without limitation federal, state, local or foreign
income or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty or addition with respect thereto or arising from a failure
to comply therewith).
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificateholders in respect of which such
judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default of which a
Responsible Officer of the Trustee has knowledge shall occur and be continuing,
the Trustee, in its discretion may, subject to the provisions of Section 10.1,
proceed to protect and enforce its rights and the rights of any Series of
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or any
Series of Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee. Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Aggregate Invested Amount (or, with respect to any remedy, trust or power
that does not relate to all Series, 50% of the aggregate Invested Amount of the
Investor Certificates of all Series to which such remedy, trust or power
relates) 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 Holders of
Investor Certificates aggregating more than 50% of the aggregate Invested Amount
of any Class may direct the Trustee to exercise its rights under Section 8.6;
provided, further, that, subject to Section 11.1,
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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 Responsible 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 of such Holders of Investor Certificates.
Section 11.15 Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(i) the Trustee is a corporation organized, existing and authorized to
engage in the business of banking under the laws of the State of its
incorporation;
(ii) the Trustee is an entity that satisfies the eligibility
requirements of Section 11.6;
(iii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
and
(iv) this Agreement has been duly executed and delivered by the
Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will maintain
at its expense an office or offices, or agency or agencies, where notices and
demands to or upon the Trustee in respect of the Certificates and this Agreement
may be served. The Trustee initially appoints its Corporate Trust Office as its
office for such purposes. The Trustee will give prompt written notice to the
Servicer and to Certificateholders (or in the case of Holders of Bearer
Certificates, in the manner provided for in the related Supplement) of any
change in the location of the Certificate Register or any such office or agency.
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ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of the Transferor, the
Servicer and the Trustee created hereby (other than the obligation of the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate, except with respect to the duties described in Section 8.4 and 11.5
and subsection 12.3(b), on the Trust Termination Date; provided, however, that
the Trust shall not terminate on the date specified in clause (i) of the
definition of "Trust Termination Date" if each of the Servicer and the Holder of
the Exchangeable Transferor Certificate notify the Trustee in writing, not later
than five Business Days preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a "Trust Extension") shall
specify the date on which the Trust shall terminate (such date, the "Extended
Trust Termination Date"); provided, however, that the Extended Trust Termination
Date shall be no later than Closing Date, 2035. The Servicer and the Holder of
the Exchangeable Transferor Certificate may, on any date following the Trust
Extension, so long as no Series of Certificates is outstanding, deliver a notice
in writing to the Trustee changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated by the Distribution
Date occurring in the second month preceding the Trust Termination Date, and
(ii) the Invested Amount of any Series, exclusive of any Transferor Retained
Class (after giving effect to all transfers, withdrawals, deposits and drawings
to occur on such date and the payment of principal on any Series of Certificates
to be made on the related Distribution Date during such month pursuant to
Article IV), would be greater than zero, the Servicer shall sell within 30 days
after such Transfer Date an amount of Receivables up to the remaining Invested
Amount if it can do so in a commercially reasonable manner. The Servicer shall
notify each Enhancement Provider of the proposed sale of the Receivables and
shall provide each Enhance-ment Provider an opportunity to bid on the
Receivables. The Transferor shall have the right of first refusal to purchase
the Receivables on terms equivalent to the best purchase offer as determined by
the Trustee in its sole discretion. The proceeds of any such sale shall be
treated as Collections on the Receivables and shall be allocated and deposited
in accordance with Article IV; provided, however, that the Trustee shall
determine conclusively in its sole discretion the amount of such proceeds which
are allocable to Imputed Yield Collections and the amount of such proceeds which
are allocable to Principal Collections. During such thirty-day period, the
Servicer shall continue to collect payments on the Receivables and allocate and
deposit such payments in accordance with the provisions of Article IV.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series Termination Date
with
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<PAGE>
respect to such Series. Unless otherwise provided in a Supplement, in the
event that the Invested Amount of any Series of Certificates is greater than
zero, exclusive of any Class held by the Transferor, on its Series Termination
Date (the "Affected Series"), after giving effect to all transfers, withdrawals,
deposits and drawings to occur on such date and the payment of principal to be
made on such Series on such date, and the Trustee will sell or cause to be sold,
and the Trustee will pay the proceeds to all Certificateholders of such Series
pro rata in final payment of all principal of and accrued interest on such
Series of Certificates or, if any Class of such Series is subordinated, in order
of their respective seniorities, an amount of Principal Receivables and the
related Imputed Yield Receivables (or interests there-in) up to 110% of the
Invested Amount of such Series at the close of business on such date (but the
amount of such Principal Receivables not to be more than an amount of
Receivables equal to the sum of (1) the product of (A) the Transferor
Percentage, (B) the aggregate outstanding Principal Receivables and (C) a
fraction the numerator of which is the Invested Amount of such Series on such
date and the denominator of which is the sum of the Invested Amounts of all
Series on such Date and (2) the Invested Amount of such Series). Receivables on
which the Dealer has not made the full monthly payment for the prior months
shall be deemed to be in default for purposes of this Section 12.1(c) to the
extent that the cash allocated to any Class of Transferor Retained Certificates
of such Series pursuant to a sale under Section 12.1(c) is less than the amount
that would have been allocated to the Exchangeable Transferor Certificate and
the Transferor Retained Certificates had the proceeds from such sale been
allocated pursuant to Section 4.3. The Servicer shall notify each Enhancement
Provider of the proposed sale of such Receivables and shall provide each
Enhancement Provider an opportunity to bid on such Receiv-ables. The Transferor
shall be permitted to purchase such Receivables in such case and shall have a
right of first refusal with respect thereto to the extent of a bona fide offer
by an unrelated third party or to the extent the Receivables represent Defaulted
Receivables. Any proceeds of such sale in excess of such principal and interest
paid shall be paid to the Holder of the Exchangeable Transferor Certificate.
Upon such Series Termination Date with respect to the applicable Series of
Certificates, final payment of all amounts allocable to any Investor
Certificates of such Series shall be made in the manner provided in Section
12.3.
Section 12.2 Optional Termination. (a) If so provided in any Supplement,
the Transferor may, but shall not be obligated to, cause a final distribution to
be made in respect of the related Series of Certificates on a Distribution Date
specified in such Supplement by depositing into the Distribution Account or the
applicable Series Account, not later than the Transfer Date preceding such
Distribution Date, for application in accordance with Section 12.3, the amount
specified in such Supple-ment; provided, however, that if the short-term
deposits or long-term unsecured debt obligations of the Transferor are not rated
at the time of such purchase of Receivables at least P-3 or Baa3, respectively,
by Moody's, no such event shall occur unless the Transferor shall deliver to the
Trustee, with a copy to Moody's, an Opinion of Counsel that such deposit into
the Distribution Account or any Series
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Account as provided in the related Supplement would not constitute a fraudulent
conveyance of the Transferor.
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid to
the Investor Certificateholders of the related Series pursuant to Section 12.3
on the related Distribution Date following the date of such deposit. All
Certificates of a Series with respect to which a final distribution has been
made pursuant to sub-section 12.2(a) shall be delivered by the Holder to, and be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor. The Invested Amount of each
Series with respect to which a final distribution has been made pursuant to
subsection 12.2(a) shall, for the purposes of the definition of "Transferor
Interest," be deemed to be equal to zero on the Distri-bution Date following the
making of the deposit, and the Transferor Interest shall thereupon be deemed to
have been increased by the Invested Amount of such Series.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the Distribution Date
upon which the Investor Certificateholders of any Series may surrender their
Certificates for payment of the final distribution with respect to such Series
and cancellation, shall be given (subject to at least four Business Days' prior
notice from the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of such final distribution (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution Date (which shall be
the Distribution Date in the month (x) in which the deposit is made pursuant to
subsection 2.4(e), 9 2(a), 10.2(a), or 12.2(a) of the Agreement or such other
section as may be specified in the related Supplement, or (y) in which the
related Series Termination Date occurs) upon which final payment of such
Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribu-tion Date is not applicable, payments being made
only upon presentation and surrender of the Investor Certificates at the office
or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officer's
Certificate setting forth the information specified in Article V of this
Agreement covering the period during the then current calendar year through the
date of such notice and setting forth the date of such final distribu-tion. The
Trustee shall give such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to subsection
12.1(a) or the occurrence of the Series Termination Date with respect to any
Series, all funds then on deposit in the Excess Funding Account, the Interest
Funding Account, the Principal Account, the Distribution Account or any Series
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Account applicable to the related series shall continue to be held in trust for
the benefit of the Certificateholders of the related Series and the Paying Agent
or the Trustee shall pay such funds to the Certificateholders of the related
Series upon surrender of their Certificates (which surrenders and payments, in
the case of Bearer Certificates, shall be made only outside the United States).
In the event that all of the Investor Certificateholders of any Series shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written notice (or, in the case of Bearer Certificates, publication notice) to
the remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one and one half years after the second notice with respect
to a Series, all the Investor Certificates of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the remaining Investor
Certificateholders of such Series concerning surrender of their Certificates,
and the cost thereof shall be paid out of the funds in the Distribution Account
or any Series Account held for the benefit of such Investor Certificateholders.
The Trustee and the Paying Agent shall pay to the Transferor upon request any
monies held by them for the payment of principal or interest which remains
unclaimed for two years. After payment to the Transferor, Investor
Certificateholders entitled to the money must look to the Transferor for payment
as general creditors unless an applicable abandoned property law designates
another Person.
(c) All Certificates surrendered for payment of the final distribution with
respect to such Certificates and cancellation shall be canceled by the Transfer
Agent and Registrar and be disposed of in a manner satisfactory to the Trustee
and the Transferor.
Section 12.4 Termination Rights of Holder of Exchangeable Transferor
Certificate. Upon the termination of the Trust pursuant to Section 12.1, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Exchangeable Transferor Certificate, the Trustee shall
execute a written reconveyance substantially in the form of Exhibit J pursuant
to which it shall reconvey to the Holder of the Exchangeable Transferor
Certificate (without recourse, representation or warranty) all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all moneys due or to become due with respect thereto (including all
amounts theretofore posted as Imputed Yield Receivables) allocable to the Trust
pursuant to any Supplement, except for amounts held by the Trustee pursuant to
subsection 12.3(b). The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case prepared by the Transferor and without
recourse, representation or warranty (other than a warranty that such property
is conveyed free and clear of any Lien of any Person claiming by or through the
Trustee) as shall be reasonably requested by the Holder of the Exchangeable
Transferor Certificate to vest in such Holder all right, title and interest
which the Trust had in the Receivables and other Trust Property.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement (including any Supplement) may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the consent of any
of the Certificateholders, (i) to cure any ambiguity, to revise any exhibits or
Schedules, to correct or supplement any provisions herein or thereon which may
be inconsistent with any other provisions herein or thereon or (ii) to add any
other provisions with respect to matters or questions raised under this
Agreement which shall not be inconsistent with the provisions of 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 of the
Investor Certificateholders. Additionally, this Agreement may be amended from
time to time by the Servicer, the Transferor and the Trustee, without the
consent of any of the Certificateholders, to add to or change any of the
provisions of this Agreement to provide that Bearer Certificates may be
registrable as to principal, to change or eliminate any restrictions on the
payment of principal of (or premium, if any) or any interest on Bearer Certifi-
cates to comply with the Bearer Rules, to permit Bearer Certificates to be
issued in exchange for Registered Certificates (if then permitted by the Bearer
Rules), to permit Bearer Certificates to be issued in exchange for Bearer
Certificates of other authorized denominations or to permit the issuance of
Certificates in uncertificated form.
This Agreement (including any Supplement), and any schedule or exhibit
thereto may also be amended from time to time by the Servicer, the Transferor
and the Trustee, without the consent of any of the Certificateholders, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement, or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that (i) the Servicer shall have
provided an Officer's Certificate to the Trustee to the effect that such
amendment will not materially and adversely affect the interests of the
Certificateholders, (ii) such amendment shall not, as evidenced by an Opinion of
Counsel, cause the Trust to be characterized for Federal income tax purposes as
an association taxable as a corpora-tion or otherwise have any material adverse
impact on the Federal income taxation of any outstanding Series of Investor
Certificates or any Certificate Owner and (iii) the Servicer shall have provided
at least ten Business Days prior written notice to each Rating Agency of such
amendment and shall have received written confir-mation from each Rating Agency
to the effect that the rating of any Series or any class of any Series will not
be reduced or withdrawn as a result of such amendment; provided, further, that
such amendment shall not reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor Certificate of
such Series without the consent of the related Investor
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Certificateholder, change the definition of or the manner of calculating the
interest of any Investor Certificateholder of such Series without the consent of
the related Investor Certificateholder or reduce the percentage pursuant to
subsection 13.1(b) required to consent to any such amendment, in each case
without the consent of all such Investor Certificateholders.
(b) This Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Holders
of Investor Certificates evidencing Undivided Interests aggregating not less
than 66-2/3% of the Invested Amount of each and every Series adversely affected,
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 Investor Certificateholders of any Series then issued
and outstanding; provided, however, that no such amendment under this subsection
shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of all of the related Investor Certificateholders;
(ii) change the definition of or the manner of calculating the interest of any
Investor Certificateholder of such Series without the consent of the related
Investor Certificateholder or (iii) reduce the aforesaid percentage required to
consent to any such amendment, in each case without the consent of all such
Investor Certificateholders.
(c) Notwithstanding anything in this Section 13.1 to the contrary, the
Supplement with respect to any Series may be amended on the items and in
accordance with the procedures provided in such Supplement.
(d) Promptly after the execution of any such amendment (other than an
amendment pursuant to paragraph (a)), the Trustee shall furnish notification of
the substance of such amendment to each Investor Certificateholder of each
Series adversely affected and ten Business Days prior to the proposed effective
date for such amendment the Servicer shall furnish notification of the substance
of such amendment to each Rating Agency providing a rating for such Series.
(e) It shall not be necessary to obtain the consent of Investor
Certificateholders under this Section 13.1 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 Investor Certificateholders shall
be subject to such reasonable requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section 6.9, executed
in accordance with the provisions hereof, shall not be considered amendments to
this Agreement for the purpose of subsections 13.1(a) and (b).
(g) In connection with any amendment, the Trustee may request an Opinion of
Counsel from the Transferor or Servicer to the effect that the
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amendment complies with all requirements of this Agreement. The Trustee may, but
shall not be obligated to, enter into any amendment which affects the Trustee's
rights, duties or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, all amendments hereto and/or
all financing statements and continuation statements and any other necessary
documents covering the Certificateholders and the Trustee's right, title and
interest to the Trust to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title
and interest of the Certificateholders or the Trustee, as the case may be,
hereunder to all property comprising the Trust. The Servicer shall deliver to
the Trustee file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available following
such recording, registration or filing. The Transferor shall cooperate fully
with the Servicer in connection with the obligations set forth above and will
execute any and all documents reasonably required to fulfill the intent of this
subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above materially
misleading within the meaning of Section 9-402(7) of the UCC as in effect in the
Relevant UCC State, the Transferor shall give the Trustee written notice of any
such change and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof.
(c) Each of the Transferor and the Servicer will give the Trustee prompt
written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, 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 and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. Each of the Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee on or before March 31 of each
year, beginning with March 31, 1997, an Opinion of Counsel, substantially in the
form of Exhibit E.
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Section 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote (except with
respect to the Investor Certificateholders as provided in Section 13.1 hereof)
or in any manner otherwise control the operation and management of the Trust, or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as members of an association; nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Certificateholder shall have any right by virtue 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, unless such
Certificateholder previously shall have given written notice to the Trustee, and
unless the Holders of Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series which may be adversely
affected but for the institution of such suit, action or proceeding, shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notices request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the 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 Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 13.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
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Section 13.4 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.
Section 13.5 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at, sent by facsimile to, sent by courier at or mailed by registered
mail, return receipt requested, to (a) in the case of the Transferor to
_______________, Attention: Chief Financial Officer, with a copy to the
Servicer as provided below, (b) in the case of the Servicer, _______________,
Attention: Chief Financial Officer, (c) in the case of the Trustee, to the
Corporate Trust Office, (d) in the case of the Enhancement Provider for a
particular Series, the address, if any, specified in the Supplement relating to
such Series and (e) in the case of the Rating Agency for a particular Series,
the address, if any, specified in the Supplement relating to such Series; or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party. Unless otherwise provided with respect to
any Series in the related Supplement 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 Certificateholder as shown in the Certificate
Register, or with respect to any notice required or permitted to be made to the
Holders of Bearer Certificates, by publication in the manner provided in the
related Supplement. If and so long as any Series or Class is listed on the
Luxembourg Stock Exchange and such Exchange shall so require, any Notice to
Investor Certificateholders shall be published in an authorized newspaper of
general circulation in Luxembourg within the time period prescribed in this
Agreement. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be 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 rights of the Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Invested Amount of each Series on a Series by Series basis. Upon such
assignment, the Trustee shall provide notice to Moody's and Standard and Poor's
in a prompt manner.
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Section 13.8 Certificates Non-Assessable and Fully Paid. Except to the
extent otherwise expressly provided in Section 7.4 with respect to the
Transferor, it in the intention of the parties to this Agreement that the
Investor Certificateholders shall not be personally liable for obligations of
the Trust, that the Undivided Interests represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and that Certificates upon authentication thereof by the Trustee
pursuant to Sections 2.1 and 6.2 are and shall be deemed fully paid.
Section 13.9 Further Assurances. The Transferor and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements relating to the
Receivables and the other Trust Property for filing under the provisions of the
UCC of any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trustee, any Enhancement Provider or
the Investor Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 13.11 Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders and,
to the extent provided in the related Supplement, to the Enhancement Provider
named therein, and their respective successors and permitted assigns. Except as
otherwise provided in this Article XIII, no other Person will have any right or
obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand or instruction given by Investor Certificateholders,
such action, notice or instruction may be taken or given by any Investor
Certificate-holder, unless such provision requires a specific percentage of
Investor Certificateholders.
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(b) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind such Certificateholder and every
subsequent holder of such 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 or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement or any Supplement 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, when required, to the Transferor
or 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
or any Supplement and conclusive in favor of the Trustee, the Transferor and the
Servicer, if made in the manner provided in this Section.
(d) 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.
Section 13.14 Rule 144A Information. For so long as any of the Investor
Certificates of any Series or any Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of the Transferor, the
Servicer, the Trustee and the Enhancement Provider for such Series agree to
cooperate with each other to provide to any Investor Certificateholders of such
Series or Class and to any prospective purchaser of Certificates designated by
such an Investor Certificateholder upon the request of such Investor
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 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 13.16 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of
the day and year first above written.
GREEN TREE FLOORPLAN FUNDING
CORP., Transferor
By: ___________________________
Name:
Title:
GREEN TREE FINANCIAL
CORPORATION, Servicer
By: ___________________________
Name:
Title:
TRUSTEE
By: ___________________________
Name:
Title:
<PAGE>
EXHIBIT A
---------
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
-------------------------------------------
No. 1 One Unit
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOORPLAN RECEIVABLE TRUST CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY BE SOLD ONLY PURSUANT TO
A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT
WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an Undivided Interest in
the Green Tree Floorplan Receivables Master Trust
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of wholesale (i.e., dealer floorplan) receivables (the "Receivables")
generated from time to time in the ordinary course of business from a portfolio
of revolving financing arrangements (the "Accounts") of Green Tree Financial
Corporation ("Green Tree" or the "Servicer") meeting certain eligibility
criteria and other assets and interests constituting the Trust under the Pooling
and Servicing Agreement described below.
(Not an interest in or a recourse obligation of
Green Tree Financal Corporation, Green Tree Floorplan Funding Corp.
or any Affiliate of either of them.)
This certifies that __________________ ("_______", the "Holder" or the
"Transferor," as the context requires) is the registered owner of a fractional
undivided interest in the Green Tree Floorplan Receivables Master Trust (the
"Trust") issued pursuant to the Pooling and Servicing Agreement, dated as of
_________, 1995 (the "Pooling and Servicing Agreement"); such term to include
any amendment or Supplement thereto) by and among Green Tree Floorplan Funding
Corp., as Transferor, Green Tree, as Servicer, and ______________, as Trustee
(the "Trustee"), as supplemented by each supplement thereto existing from time
to time. The corpus of the Trust will include (i) all of the Transferor's
right, title and interest in, to and under the Receivables in each Account and
all Collateral Security with respect thereto owned by the Transferor at the
close of business on the Cut-off Date, in the case of the Initial Accounts, and
on the applicable Additional
A-1
<PAGE>
Cut-off Date, in the case of Additional Accounts, and all monies due or to
become due and all amounts received with respect thereto and all proceeds
(including "proceeds" as defined in Section 9-306 of the UCC as in effect in the
State of Minnesota and Recoveries) thereof, (ii) all of the Transferor's rights,
remedies, powers and privileges with respect to such Receivables under the
Receivables Purchase Agreement and any Floorplan Agreement, (iii) all of the
Transferor's right, title and interest in, to and under the Receivables in each
Account (other than any newly created Receivables in any Removed Account) and
all Collateral Security with respect thereto owned by the Transferor at the
close of business of each Transfer Date and not theretofore conveyed to the
Trust, all monies due or to become due and all amounts received with respect
thereto and all proceeds (including "proceeds" as defined in Section 9-306 of
the UCC as in effect in the State of Minnesota and Recoveries) thereof, (iv) the
benefit of funds on deposit in the Excess Funding Account, (v) any Enhancements,
(vi) all monies due or to become due with respect thereto, (vii) all monies on
deposit in the Collection Account, the Interest Funding Account, the Principal
Account, the Distribution Account and the Excess Funding Account (excluding any
investment earnings on such deposited amounts except for such amounts as are on
deposit in the Excess Funding Account), (viii) all other assets and interests
constituting the Trust and (ix) all proceeds of the foregoing.
Although a summary of certain provisions of the Agreement is set forth
below, 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 obligations of the Trustee. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Holder by virtue of the
acceptance hereof assents and by which the Holder is bound.
This Certificate has not been registered or qualified under the Securities
Act of 1933, as amended, or any state securities law. No sale, transfer or
other disposition of this Certificate shall be permitted other than in
accordance with the provisions of Section 6.3, 6.9 or 7.2 of the Pooling and
Servicing Agreement.
The Receivables consist of advances made directly or indirectly by Green
Tree to dealers in, and manufacturers of, commercial and consumer products.
This Certificate is the Exchangeable Transferor Certificate (the
"Certificate"), which represents an undivided interest in the Trust, including
the right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement to be paid to the
Holder of the Exchangeable
A-2
<PAGE>
Transferor Certificate. The aggregate interest represented by this Certificate
at any time in the Principal Receivables in the Trust shall not exceed the
Transferor Interest at such time. In addition to this Certificate, Series of
Investor Certificates will be issued to investors pursuant to the Pooling and
Servicing Agreement, each of which will represent an Undivided Interest in the
Trust. This Certificate shall not represent any interest in any Enhancement,
except to the extent provided in the Pooling and Servicing Agreement. The
Transferor Interest on any date of determination will be an amount equal to the
aggregate amount of Principal Receivables at the end of the day immediately
prior to such date of determination plus amounts on deposit in the Excess
Funding Account (but not including any investment earnings thereon) minus the
Aggregate Invested Amount at the end of such day.
The Servicer shall deposit all Collections in the Collection Account as
promptly as possible after the Date of Processing of such Collections. Unless
otherwise stated in any Supplement, throughout the existence of the Trust, the
Servicer shall allocate to the Holder of the Certificate an amount equal to the
product of (A) the Transferor Percentage and (B) the aggregate amount of such
Principal Collections, Interest Collections and and Imputed Yield Collections,
respectively, in respect of each Monthly Period. Notwithstanding the first
sentence of this paragraph, the Servicer need not deposit this amount or any
other amounts so allocated to the Certificate pursuant to the Pooling and
Servicing Agreement into the Collection Account and shall pay, or be deemed to
pay, such amounts as collected to the Holder of the Certificate.
Green Tree or any permitted successor or assignee, as Servicer, is entitled
to receive as servicing compensation a monthly servicing fee. The portion of
the servicing fee which will be allocable to the Holder of the Certificate
pursuant to the Pooling and Servicing Agreement will be payable by the Holder of
the Certificate and neither the Trust nor the Trustee or the Investor
Certificateholders will have any obligation to pay such portion of the servicing
fee.
This Certificate does not represent a recourse obligation of, or any
interest in, the Transferor or the Servicer. This Certificate is limited in
right of payment to certain Collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
Upon the termination of the Trust pursuant to Section 12.1 of the Pooling
and Servicing Agreement, the Trustee shall assign and convey to the Holder of
the Certificate (without recourse, representation or warranty) all right, title
and interest of the Trust in the Receivables, whether then existing or
thereafter created, and all proceeds relating thereto. The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably requested by the Holder of the
Certificate to vest in such Holder all right, title and interest which the
Trustee had in the Receivables.
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<PAGE>
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed.
GREEN TREE FLOORPLAN
RECEIVABLES MASTER TRUST
By:----------------------------------------
Name:
Title:
Date:
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred to in the within-
mentioned Pooling and Servicing Agreement.
-------------------------------------------
Authenticating Agent
By:----------------------------------------
Name:
Title:
A-5
<PAGE>
EXHIBIT B
---------
FORM OF DAILY REPORT
--------------------
GREEN TREE FLOORPLAN FUNDING CORP.
_________________________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
_________________________
The undersigned, a duly authorized representative of Green Tree Financial
Corporation (the "Servicer"), as Servicer pursuant to the Pooling and Servicing
Agreement dated as of __________, 1995 (the "Pooling and Servicing Agreement")
by and among Green Tree Floorplan Funding Corp. (the "Transferor"), the Servicer
and ____________, as Trustee, does hereby certify as follows:
B-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT C
---------
- ---------------------------------------------------------------------------------------------------------------------------
Green Tree Floorplan Receivables Green Tree
Master Trust Floorplan Receivables Master Trust Monthly Report
Certificateholder's Statement Series 1995-1 -95
- ---------------------------------------------------------------------------------------------------------------------------
Section 5.2 Class A Class B Class C Class D Total
<S> <C> <C> <C> <C> <C>
(i) Certificate Amount
(ii) Certificate Principal Distributed
(iii) Certificate Interest Distributed
Local Distribution per $1.000 Certificates
Certificate Principal Distributed per $1,000
Certificate Interest Distributed per $1,000
(iv) Principal Collections
(v) Imputed Yield Collections
Total Collections
(vi) Aggregate Amount of Principal Receivables
Invested Amount
Floating Allocation Percentage
(vii) Receivable Delinquencies
Current
30 Days to 99 Days
60 Days to 89 Days
90 Day and Over
Total Receivables
(viii) Aggregate Investor Default Amount
(ix) Charge-Offs
Class A
Class B
Class C
Class D
Total Charge-Offs
(x) Servicing Fee
Class A
Class B
Class C
Total Charge-Offs
(xi) Pool Factor
Class A
Class B
Class C
(xii) Reallocated Principal Collections
Class A
Class B
Class C
(xiii) Excess Funding Account Balance
(xiv) Class C Trigger Event Occurrence
Class C Reserve Amount
Average Portfolio Yield
</TABLE>
C-1
<PAGE>
EXHIBIT D
---------
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------------------------
GREEN TREE FLOORPLAN FUNDING CORP.
------------------------
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
------------------------
The undersigned, a duly authorized representative of Green Tree Financial
Corporation ("Green Tree"), as Servicer pursuant to the Pooling and Servicing
Agreement dated as of ________, 1995 (the "Pooling and Servicing Agreement") by
and among Green Tree Floorplan Funding Corp. (the "Transferor"), Green Tree, as
Servicer and _________________, as trustee (the "Trustee") does hereby certify
that:
1. Green Tree is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section 3.5 of the
Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during (the period
from the Closing Date until) (the twelve fiscal month period ended)
__________, 19__ was conducted under our supervision.
5. Based on such review, the Servicer has, to the best of our
knowledge, fully performed all its obligations under the Pooling and
Servicing Agreement throughout such period and no default in the
performance of such obligations has occurred or is continuing except as set
forth in paragraph 6 below.
6. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Pooling and
Servicing Agreement, including any Supplement, known to us to have been
made during such period which sets forth in detail (i) the nature of each
such default, (ii) the action taken by the Servicer, if any, to remedy each
such default and (iii) the current status of each such default:
If applicable, insert "None."
D-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this certificate this
___ day of __________, ____.
GREEN TREE FINANCIAL
CORPORATION, as Servicer
-------------------------------------
Name:
Title:
D-2
<PAGE>
EXHIBIT E
---------
FORM OF ANNUAL OPINION OF COUNSEL
---------------------------------
The opinion set forth below, which is to be delivered pursuant to
subsection 13.2(d)(ii) of the Pooling and Servicing Agreement, may be subject to
certain qualifications, assumptions, limitations and exceptions taken or made in
the opinion of counsel delivered on the Initial Closing Date with respect to
similar matters.
No filing or other action, other than such filing or action described in
such opinion, is necessary from the date of such opinion through __________ of
the following year to continue the perfected status of the interest of the Trust
in the collateral described in the financing statements referred to in such
opinion.
E-1
<PAGE>
EXHIBIT F
---------
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
-------------------------------------------------------
(As required by Section 2.6 of the Receivables
Purchase Agreement referred to below)
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as
of __________, ____, by and between GREEN TREE
FLOORPLAN FUNDING CORP., as buyer (the "Buyer"),
and GREEN TREE FINANCIAL CORPORATION, as seller
(the "Seller"), pursuant to the Receivables
Purchase Agreement referred to below.
WITNESSETH
WHEREAS the Seller and the Buyer are parties to the Receivables Purchase
Agreement dated as of _______________, 1995 (as amended or supplemented, the
"Receivable Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to remove all Receivables from certain Accounts, the Collateral Security thereof
and the related Floorplan Rights (the "Removed Accounts") and to cause the Buyer
to reconvey the Receivables of such Removed Accounts and such Collateral
Security and Floorplan Rights, whether now existing or hereafter created, and
all amounts currently held by the Buyer or thereafter received by the Trust in
respect of such Removed Accounts, from the Buyer to the Seller (as each such
term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such removal and to reconvey the
Receivables in the Removed Accounts, such Collateral Security and any related
amounts held or received by the Trust subject to the terms and conditions
hereof.
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"Removal Date" shall mean, with respect to the Removed Accounts designated
hereby, __________________.
2. Notice of Removed Accounts. The Seller shall deliver to the Buyer,
the Trustee, any Enhancement Providers and the Rating Agencies a computer file
or microfiche or written list containing a true and complete list of the Removed
F-1
<PAGE>
Accounts specifying for each such Account, as of the Removal Commencement Date,
its account number, the aggregate amount of Receivables outstanding in such
Accounts and the Designated Balance. Such list shall be marked as Schedule 1 to
this Reassignment and shall be incorporated into and made a part of this
Reassignment as of the Removal Date and shall amend Schedule 1 to the
Receivables Purchase Agreement.
3. Conveyance of Receivables and Accounts.
(a) The Buyer does hereby transfer, assign, set over and otherwise convey
to the Seller, without recourse, representation or warranty on and after the
Removal Date, all right, title and interest of the Trust in, to and under all
Receivables now existing at the close of business on the Removal Date and
thereafter created from time to time until the termination of the Trust in
Removed Accounts designated hereby, all Collateral Security thereof, the related
Floorplan Rights, all monies due or to become due and all amounts received with
respect thereto (Interest Receivables), all proceeds (as defined in Section
9-306 of the UCC as in effect in the State of Minnesota and Recoveries) thereof
relating thereto.
(b) If requested by the Seller, in connection with such transfer, the
Buyer agrees to execute and deliver to the Seller, on or prior to the date of
this Reassignment, a termination statement with respect to the Receivables
existing at the close of business on the Removal Date and thereafter created
from time to time and Collateral Security thereof in the Removed Accounts
reassigned hereby (which may be a single termination statement with respect to
all such Receivables and Collateral Security) evidencing the release by the
Trust of its lien on the Receivables in the Removed Accounts and the Collateral
Security, and meeting the requirements of applicable state law, in such manner
and such jurisdictions as are necessary to remove such lien.
4. Acceptance by Buyer. The Buyer hereby acknowledges that, prior to or
simultaneously with the execution and delivery of this Reassignment, the Seller
delivered to the Buyer the computer file or such microfiche or written list
described in section 2(b) of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer as of the date of this Reassignment and as
of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment 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 generally and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
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<PAGE>
(b) No Pay Out Event. The removal of the Accounts hereby removed shall
not, in the reasonable belief of the Seller, cause a Pay Out Event to occur or
cause the Pool Balance to be less than the Minimum Aggregate Principal
Receivables;
(c) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Accounts to be removed; and
(d) True and Complete List. The list of Removed Accounts described in
Section 2(b) of this Assignment is, as of the Removal Commencement Date, true
and complete in all material respects.
provided, however, that in the event that the removal on such Removal Date
relates solely to Ineligible Accounts, the Seller shall be deemed to make only
the representations and warranties contained in paragraph 5(a) above.
6. Condition Precedent. In addition to the conditions precedent set
forth in Section 2.6 of the Receivables Purchase Agreement, the obligation of
the Buyer to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Removal Date to the Trustee and the Buyer,
any Agent, and any Enhancement Providers an Officers' Certificate certifying
that (i) as of the Removal Date, all requirements set forth in Section 2.6 of
the Agreement for removing such Accounts and reconveying the Receivables of such
Removed Accounts, the Collateral Security and the related Floorplan Rights,
whether existing at the close of business on the Removal Date or thereafter
created from time to time until the termination of the Trust, have been
satisfied, and (ii) each of the representations and warranties made by the
Seller in Section 5 hereof is true and correct as of the date of this
Reassignment and as of the Removal Date. The Buyer may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Reassignment shall be
read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
G-3
<PAGE>
9. GOVERNING LAW. THIS REASSIGNMENT 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.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
GREEN TREE FLOORPLAN FUNDING
CORP., Buyer
By: _____________________________
Name: ___________________________
Title: __________________________
GREEN TREE FINANCIAL CORPORATION,
Seller
By: _____________________________
Name: ___________________________
Title: __________________________
G-4
<PAGE>
EXHIBIT G
---------
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
--------------------------------------------------------
(As required by Section 2.4
of the Receivables Purchase Agreement)
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
__________, ____, between Green Tree Floorplan Funding Corp., as buyer (the
"Buyer"), and Green Tree Financial Corporation, as seller (the "Seller"),
pursuant to the Receivables Purchase Agreement referred to below.
W I T N E S S E T H:
-------------------
WHEREAS the Seller and the Buyer are parties to a Receivables Purchase
Agreement dated as of _____________, 1995 (as amended or supplemented, the
"Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to designate Additional Accounts to be included as Accounts and to convey the
Receivables and related Collateral Security of such Additional Accounts, whether
now existing or hereafter created, to the Buyer as part of the corpus of the
Trust (as each such term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, 19__.
2. Designation of Additional Accounts. The Seller hereby delivers
herewith a computer file or microfiche or written list containing a true and
complete list of all such Additional Accounts specifying for each such Account,
as of the Additional Cut-off Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the aggregate amount of Principal
Receivables in such Account. Such file or list shall, as of the date of this
Assignment, supplement Schedule 1 to the Receivables Purchase Agreement.
G-1
<PAGE>
3. Conveyance of Receivables.
(a) The Seller does hereby sell, transfer, assign, set over and otherwise
convey, without recourse (other than the Limited Guaranty of the Seller for the
benefit of the Class C Certificateholders and except as expressly provided in
the Receivables Purchase Agreement), to the Buyer, on the Addition Date all of
its right, title and interest in, to and under the Receivables in such
Additional Accounts, all Collateral Security and the related Floorplan Rights
with respect thereto, owned by the Seller and existing at the close of business
on the Additional Cut-off Date and thereafter created from time to time, all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof. The foregoing sale,
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in the creation or an assumption by the Buyer of any
obligation of the Servicer, the Seller or any other Person in connection with
the Accounts, the Receivables or under any agreement or instrument relating
thereto, including any obligation under any Financing Agreement or Floorplan
Agreement, including any other obligation to any Dealer or Manufacturer.
(b) In connection with such sale, the Seller agrees to record and file, at
its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) with respect to the Receivables now existing and
hereafter created for the sale of chattel paper, accounts and general
intangibles (as defined in Section 9-105 or 9-106 of the UCC as in effect in any
state where the Seller's or the Servicer's chief executive offices or books and
records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the Collateral
Security to the Buyer, and to deliver a file-stamped copy of such financing
statements or other evidence of such filing to the Buyer on or prior to the
Addition Date to the extent, if any, that the UCC-1 financing statements filed
pursuant to Section 2.1 of the Receivables Purchase Agreement are not sufficient
for such purpose. In addition, the Seller shall cause to be timely filed in the
appropriate filing office any UCC-1 financing statement and continuation
statement necessary to perfect any sale of Receivables to the Seller. The Buyer
shall be under no obligation whatsoever to file such financing statement, or a
continuation statement to such financing statement, or to make any other filing
under the UCC in connection with such sale. The parties hereto intend that the
sales of Receivables effected by this Agreement be sales.
(c) In connection with such sale, the Seller further agrees, at its own
expense, on or prior to the Addition Date, to indicate in its books and records,
which may include its computer files, that the Receivables created in connection
with the Additional Accounts designated hereby have been sold and the Collateral
Security assigned to the Buyer pursuant to this Assignment and sold to the Trust
pursuant to
G-2
<PAGE>
the Pooling and Servicing Agreement for the benefit of the Certificateholders
and the other Beneficiaries.
4. Acceptance by Buyer. Subject to the satisfaction of the conditions
set forth in Section 6 of this Assignment, the Buyer hereby acknowledges its
acceptance of all right, title and interest to the property, now existing and
hereafter created, conveyed to the Buyer pursuant to Section 3(a) of this
Assignment. The Buyer further acknowledges that, prior to or simultaneously
with the execution and delivery of this Assignment, the Seller delivered to the
Buyer the computer file or microfiche or written list relating to the Additional
Accounts described in Section 2 of this Assignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer, on behalf of the Trust, as of the date of
this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment 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 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 in equity);
(b) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the law of the State
of Delaware and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Assignment;
(c) Due Qualification. The Seller is duly qualified to do business and,
where necessary, is in good standing as a foreign corporation (or is exempt from
such requirement) and has obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires such qualification
except where the failure to so qualify or obtain licenses or approvals would not
have a material adverse effect on its ability to perform its obligations
hereunder;
(d) Eligible Accounts. Each Additional Account designated hereby is an
Eligible Account;
(e) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Additional Accounts designated hereby;
G-3
<PAGE>
(f) Insolvency. As of the Notice Date and the Addition Date, the Seller is
not insolvent nor, after giving effect to the conveyance set forth in Section 3
of this Assignment, will it have been made insolvent, nor is it aware of any
pending insolvency;
(g) Valid Transfer. This Assignment constitutes a valid sale, transfer and
assignment to the Buyer of all right, title and interest of the Seller in the
Receivables and the Collateral Security and the proceeds thereof and upon the
filing of the financing statements described in Section 3 of this Assignment
with the Secretary of State of the State of Minnesota and other applicable
states and counties and, in the case of the Receivables and the Collateral
Security hereafter created and the proceeds thereof, upon the creation thereof,
the Buyer shall have a first priority perfected ownership interest in such
property, except for Liens permitted under Section 2.6(a) of the Receivables
Purchase Agreement;
(h) Due Authorization. The execution and delivery of this Assignment and
the consummation of the transactions provided for or contemplated by this
Assignment have been duly authorized by the Seller by all necessary corporation
action on the part of the Seller;
(i) No Conflict. The execution and delivery of this Assignment, the
performance of the transactions contemplated by this Assignment and the
fulfillment of the terms hereof, will not conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or its properties are bound;
(j) No Violation. The execution and delivery of this Assignment by the
Seller, the performance of the transactions contemplated by this Assignment and
the fulfillment of the terms hereof will not conflict with or violate any
material Requirements of Law applicable to the Seller;
(k) No Proceedings. There are no proceedings or, to the best knowledge of
the Seller, investigations pending or threatened against the Seller before any
Governmental Authority (i) asserting the invalidity of this Assignment, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Assignment, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Assignment, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Assignment or (v) seeking to affect adversely
the income tax attributes of the Trust under the United States federal or any
State income, single business or franchise tax systems;
G-4
<PAGE>
(l) Record of Accounts. As of the Addition Date, Schedule 1 to this
Assignment is an accurate and complete listing in all material respects of all
the Additional Accounts as of the Additional Cut-off Date and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all material respects as
of the Additional Cut-off Date;
(m) No Liens. Each Receivable and all Collateral Security existing on the
Addition Date has been conveyed to the Buyer free and clear of any Lien;
(n) All Consents Required. With respect to each Receivable and all
Collateral Security existing on the Addition Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the conveyance of such Receivable or Collateral Security to
the Buyer, the execution and delivery of this Assignment and the performance of
the transactions contemplated hereby have been duly obtained, effected or given
and are in full force and effect; and
(o) Eligible Receivables. On the Additional Cut-off Date each Receivable
conveyed to the Buyer as of such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to the
Buyer in accordance with Section 2.8 of the Receivables Purchase Agreement.
6. Conditions Precedent. The acceptance of the Trustee set forth in
Section 4 of this Assignment is subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 5 of this Assignment shall be true and
correct as of the date of this Assignment and as of the Addition Date;
(b) Agreement. Each of the conditions set forth in Section 2.4(b) of the
Receivables Purchase Agreement applicable to the designation of the Additional
Accounts to be designated hereby shall have been satisfied; and
(c) Addition Information. The Seller shall have delivered to the Buyer
such information as was reasonably requested by the Buyer to satisfy itself as
to the accuracy of the representation and warranty set forth in Section 5(d) of
this Assignment.
7. Ratification of Agreement. As supplemented by this Assignment, the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Assignment shall be
read, taken and construed as one and the same instrument.
G-5
<PAGE>
8. Counterparts. This Assignment 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.
9. GOVERNING LAW. THIS ASSIGNMENT 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.
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Assignment to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Buyer
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
GREEN TREE FINANCIAL
CORPORATION, Seller
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
G-6
<PAGE>
EXHIBIT H
---------
FORM OF AGREED UPON PROCEDURES
------------------------------
The Servicer and Trustee will engage a first of nationally recognized
independent public accountants (who may also render other services to the
Servicer or any of its subsidiaries) to perform certain agreed-upon procedures
substantially similar to the following:
1) The accountants will obtain the Master Trust schedules showing the daily
amount of eligible accounts receivable activity (hereinafter referred to as
the "Daily Report") for five days within the period and compare amounts set
forth on the Daily Report representing sales, returns, cash collections,
exchanges, allowances and bad debt charge offs with the corresponding
amounts set forth in the Servicer's accounts receivable reports and verify
the mathematical accuracy of the Daily Report.
2) For five days within the period, the accountants will compare the cash
collections appearing on the Servicer's accounts receivable reports to an
entry on the relevant Daily Report. The accountants will compare the cash
transfers indicated on the Daily Reports to entries on the relevant Master
Trust bank statements.
3) The accountants will compare the aggregate customer balances in the
"current" and "90 days and over" categories as reflected on the monthly
Settlement Statement to the corresponding amounts set ford in the
Servicer's accounts receivable aging reports as of three month-ends within
the period.
4) For five weekly periods, the accountants will compare beginning and ending
total receivables balances on the Servicer's accounts receivable reports
with the corresponding balances on the corresponding Daily Report and will
verify the mathematical accuracy of the calculation of beginning and ending
principal receivable balances and beginning and ending imputed yield
receivable balances.
5) For five days within the period, the accountants will recompute the daily
allocation of Principal, Interest and Imputed Yield collections to each
series based upon information appearing on the Daily Reports.
6) For monthly Settlement Statement during the period, the accountants will
compare the information appearing therein to the information appearing in
the corresponding Daily Reports.
7) The public accountants will inquire as to changes in the Transferor's
Discount Factor.
H-1
<PAGE>
EXHIBIT I
---------
FORM OF RECONVEYANCE OF RECEIVABLES
-----------------------------------
RECONVEYANCE OF RECEIVABLES, dated as of __________, 19__ by and
between GREEN TREE FLOORPLAN FUNDING CORP., a corporation organized and existing
under the laws of the State of Delaware (the "Transferor"), and
___________________, a banking corporation organized and existing under the laws
of the State of ______ (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the Pooling and
Servicing Agreement dated as of _________, 1995 (hereinafter as such agreement
may have been, or may from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement") by and among the Transferor,
Green Tree Financial Corporation as Servicer, and the Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor
wishes to cause the Trustee to reconvey all of the Receivables and proceeds
thereof, whether now existing or hereafter created, from the Trust to the
Transferor pursuant to the terms of Section 12.4 of the Pooling and Servicing
Agreement upon termination of the Trust pursuant to subsection 12.1(a) of the
Pooling and Servicing Agreement (as each such term is defined in the Pooling and
Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey the Receivables subject to the
terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Reconveyance Date" shall mean __________, 19__.
2. Return of Lists of Receivables. The Trustee shall deliver to the
Transferor or the bailee of the Transferor, not later than three Business Days
after the Reconveyance Date, each and every computer file or microfiche list of
Receivables delivered to the Trustee pursuant to the terms of the Pooling and
Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby reconvey to
the Transferor, without recourse, representation or warranty, on and after the
I-1
<PAGE>
Reconveyance Date, all right, title and interest of the Trust in and to each and
every Receivable now existing and hereafter created, all monies due or to become
due with respect thereto (including all Imputed Yield Receivables), all proceeds
(as defined in Section 9-306 of the UCC as in effect in the Relevant UCC State)
of such Receivables, except for amounts, if any, held by the Trustee pursuant to
subsection 12.3(b) of the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor on or prior to the date of this Reconveyance, such UCC
termination statements as the Transferor may reasonably request, evidencing the
release by the Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
5. Governing Law. THIS RECONVEYANCE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
GREEN TREE FLOORPLAN FUNDING
CORP.
By: ___________________________
Name: _________________________
Title: ________________________
TRUSTEE
By: ___________________________
Name: _________________________
Title: ________________________
I-2
<PAGE>
SCHEDULE 1
----------
LIST OF ACCOUNTS
----------------
<PAGE>
SCHEDULE 2
----------
DESIGNATION OF COLLECTION ACCOUNT
---------------------------------
<PAGE>
Exhibit 4.2
- -------------------------------------------------------------------------------
GREEN TREE FLOORPLAN FUNDING CORP.
Transferor
GREEN TREE FINANCIAL CORPORATION
Servicer
and
_________________________
Trustee
on behalf of the Series 1995-1 Certificateholders
_________________________
SERIES 1995-1 SUPPLEMENT
Dated as of ________________, 1995
to
POOLING AND SERVICING AGREEMENT
Dated as of ________________, 1995
_________________________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
$__________ Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class A
$__________ Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class B
$__________ Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class C
$__________ 0% Floorplan Receivable Trust
Certificates, Series 1995-1, Class D
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Designation.......................................... 1
SECTION 2. Definitions.......................................... 1
SECTION 3. Optional Repurchase.................................. 17
SECTION 4. Delivery and Payment for the Series 1995-1
Certificates......................................... 17
SECTION 5. Form of Delivery of Series 1995-1 Certificates....... 17
SECTION 6. Article IV of Agreement.............................. 17
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.4 Rights of Certificateholders......................... 18
Section 4.5 Collections and Allocation; Payments on
Exchangeable Transferor Certificate.................. 18
Section 4.6 Determination of Monthly Interest for the Series
1995-1 Certificates.................................. 19
Section 4.7 Determination of Principal Amounts................... 21
Section 4.8 Shared Principal Collections......................... 23
Section 4.9 Application of Funds on Deposit in the
Collection Account for the Certificates.............. 23
Section 4.10 Coverage of Required Amount for the Series
1995-1 Certificates.................................. 31
Section 4.11 Payment of Certificate Interest...................... 32
Section 4.12 Payment of Certificate Principal..................... 32
Section 4.13 Investor Charge-Offs................................. 33
Section 4.14 Reallocated Principal Collections for the
Series 35 1995-1 Certificates........................ 34
Section 4.15 Determination of LIBOR............................... 35
Section 4.16 Class C Limited Guaranty............................. 36
Section 4.17 Expense Reserve...................................... 36
Section 4.18 Establishment of Expense Reserve Account............. 37
SECTION 7. Article V of the Agreement................................... 38
</TABLE>
-i-
<PAGE>
ARTICLE V
Distributions and Reports to Investor Certificateholders
--------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Section 5.1 Distributions...................................... 38
Section 5.2 Certificateholders' Statement...................... 39
SECTION 8. Series 1995-1 Pay Out Events............................ 41
SECTION 9. Series 1995-1 Termination............................... 42
SECTION 10. Legends; Transfer and Exchange; Restrictions on
Transfer of Series 1995-1 Certificates; Tax Treatment... 42
SECTION 11. Ratification of Agreement............................... 45
SECTION 12. Registration of the Class A Certificates under the
Securities Exchange Act of 1934......................... 45
SECTION 13. Counterparts............................................ 45
SECTION 14. Governing Law........................................... 46
SECTION 15. Instructions in Writing................................. 46
</TABLE>
EXHIBITS
- --------
EXHIBIT A Form of Class A Investor Certificate
EXHIBIT B Form of Class B Investor Certificate
EXHIBIT C Form of Class C Investor Certificate
EXHIBIT D Form of Class D Investor Certificate
EXHIBIT E Form of Monthly Certificateholder's Statement
EXHIBIT F Form of 144A Exchange Notice and Certification
-ii-
<PAGE>
SERIES 1995-1 SUPPLEMENT, dated as of _________________, 1995 (the "Series
Supplement") by and among GREEN TREE FLOORPLAN FUNDING CORP., a corporation
organized and existing under the laws of the State of Delaware, as Transferor
(the "Transferor"), GREEN TREE FINANCIAL CORPORATION, a corporation organized
and existing under the laws of Delaware, as Servicer (the "Servicer"), and
________________, a _________________ organized and existing under the laws of
____________, as trustee (together with its successors in trust thereunder as
provided in the Agreement referred to below, the "Trustee") under the Pooling
and Servicing Agreement dated as of ________________, 1995 (as supplemented, the
"Agreement") among the Transferor, the Servicer and the Trustee.
Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the issuance by the
Trustee to the Transferor, for execution and redelivery to the Trustee for
authentication, of one or more Series of Certificates.
Pursuant to this Series Supplement, the Transferor and the Trustee shall
create a new Series of Investor Certificates and shall specify the Principal
Terms thereof.
SECTION 1. Designation. There is hereby created a Series of Investor
Certificates to be issued pursuant to the Agreement and this Series Supplement
to be known generally as the "Series 1995-1 Certificates." The Series 1995-1
Certificates shall be issued in four Classes, which shall be designated
generally as the Floating Rate Floorplan Receivable Trust Certificates, Series
1995-1, Class A (the "Class A Certificates"), the Floating Rate Floorplan
Receivable Trust Certificates, Series 1995-1, Class B (the "Class B
Certificates"), the Floating Rate Floorplan Receivable Trust Certificates,
Series 1995-1, Class C (the "Class C Certificates") and the Floating Rate
Floorplan Receivable Trust Certificates, Series 1995-1, Class D (the "Class D
Certificates").
SECTION 2. Definitions. In the event that any term or provision contained
herein shall conflict with or be inconsistent with any provision contained in
the Agreement, the terms and provisions of this Series Supplement shall govern
with respect to the Series 1995-1 Certificates. All Article, Section or
subsection references herein shall mean Article, Section or subsections of the
Agreement, as amended or supplemented by this Series Supplement, except as
otherwise provided herein. All capitalized terms not otherwise defined herein
are defined in the Agreement. Each capitalized term defined herein shall relate
only to the Series 1995-1 Certificates and no other Series of Certificates
issued by the Trust.
"Accumulation Shortfall shall mean, with respect to any Monthly Period, the
difference, if any, between (i) the amount deposited in the Principal Account
for the
<PAGE>
preceding Monthly Period and (ii) the Controlled Deposit Amount for the
preceding Monthly Period.
"ABC Fixed/Floating Allocation Percentage" shall mean for any Business Day
the percentage equivalent of a fraction, the numerator of which is the sum of
the Class A Invested Amount, the Class B Invested Amount and the Class C
Invested Amount at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the sum of the aggregate amount of
Principal Receivables and the amount on deposit in the Excess Funding Account at
the end of the preceding Business Day and (b) the sum of the numerators used to
calculate the allocation percentages with respect to Principal Receivables for
all Series.
"ABC Investor Default Amount" shall mean an amount equal to the product of
(a) the sum of the Class A Floating Allocation Percentage, the Class B Floating
Allocation Percentage and the Class C Floating Allocation Percentage applicable
on such Business Day and (b) the aggregate Default Amount identified since the
prior reporting date.
"Additional Interest" shall mean, at any time of determination, the sum of
Class A Additional Interest, Class B Additional Interest and Class C Additional
Interest.
"Available Series 1995-1 Interest Collections" shall have the meaning
specified in subsection 4.9(a) of the Agreement.
"Base Rate" shall mean the sum of (i) the average of the Class A
Certificate Rate, the Class B Certificate Rate and the Class C Certificate Rate
weighted by the unpaid principal amount of each respective class of Certificates
plus (ii) 2% per annum.
"Carryover Class A Interest" shall mean (a) any Class A Interest due but
not paid on any previous Distribution Date plus (b) any Class A Additional
Interest.
"Carryover Class B Interest" shall mean (a) any Class B Interest due but
not paid on any previous Distribution Date plus (b) any Class B Additional
Interest.
"Carryover Class C Interest" shall mean (a) any Class C Interest due but
not paid on any previous Distribution Date plus (b) any Class C Additional
Interest.
"Class A Additional Interest" shall have the meaning specified in
subsection 4.6(a).
"Class A Certificateholder" shall mean the Person in whose name a Class A
Certificate is registered in the Certificate Register.
-2-
<PAGE>
Class A Certificateholders' Interest" shall mean the portion of the Series
1995-1 Certificateholder's Interest evidenced by the Class A Certificates.
"Class A Certificate Rate" shall mean __% per annum above LIBOR determined
on November __, 1995 for the period from November __, 1995 through December 14,
1995, and from December 15, 1995, through January 14, 1996 and with respect to
each Interest Period thereafter, a per annum rate __% in excess of LIBOR as
determined on the related LIBOR Determination Date, but in no event in excess of
__% per annum.
"Class A Certificates" shall mean any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A hereto.
"Class A Controlled Accumulation Amount" shall mean $__________.
"Class A Controlled Distribution Amount" shall mean, with respect to any
Distribution Date, an amount equal to the Class A Controlled Accumulation Amount
plus the Class A Deficit Controlled Accumulation Amount determined on the
preceding Distribution Date, if any.
"Class A Deficit Controlled Accumulation Amount" shall mean zero on the
initial Distribution Date and, on any subsequent Distribution Date, the excess,
if any, of (i) the Class A Controlled Distribution Amount over (ii)(a) any
amount on deposit in the Excess Funding Account allocated to the Class A
Certificates on such day pursuant to subsection 4.9(d), (b) any amounts in
respect of ABC Investor Default Amounts and Class A Investor Charge-Offs, Class
B Investor Charge-Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs paid on such day and (c) Shared Principal Collections allocable to
the Class A Certificates, if any, and (d) the product of the ABC Fixed/Floating
Allocation Percentage and the aggregate amount of Principal Collections
collected during the preceding Monthly Period.
"Class A Floating Allocation Percentage" shall mean, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class A Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the total amount of Principal
Receivables in the Trust and the amounts on deposit in the Excess Funding
Account as of the end of the preceding Business Day and (b) when used with
respect to Principal Collections only, the sum of the numerators with respect to
all Classes of all Series then outstanding used to calculate the applicable
allocation percentage.
"Class A Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class A Certificates, which is $__________.
"Class A Interest" shall mean the interest distributable in respect of the
Class A Certificates as calculated in accordance with subsection 4.6(a).
-3-
<PAGE>
"Class A Interest Shortfall" shall have the meaning specified in subsection
4.6(a).
"Class A Invested Amount" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class A Initial Invested Amount (i)
during the Revolving Period in connection with the addition of Receivables to
the Trust or (ii) at the end of the Revolving Period for deposit into the Excess
Funding Account, minus (b) the aggregate amount of principal payments made to
Class A Certificateholders prior to such Business Day, minus (c) the aggregate
amount of Class A Investor Charge-Offs for all prior Distribution Dates, plus
(d) the sum of the aggregate amount allocated with respect to Class A Investor
Charge-Offs and available on all prior Distribution Dates pursuant to subsection
4.9(a)(vii), and, with respect to such subsection and pursuant to subsections
4.10(a) and (b) of the Agreement, for the purpose of reinstating amounts reduced
pursuant to the foregoing clause (c).
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.13(d).
"Class A Investor Percentage" shall mean, for any Business Day, (a) with
respect to Interest Receivables and Defaulted Receivables at any time or
Principal Receivables during the Revolving Period, the Class A Floating
Allocation Percentage and (b) with respect to Principal Receivables during the
Controlled Accumulation Period, the ABC Fixed/Floating Allocation Percentage.
"Class A Percentage" shall mean a fraction the numerator of which is the
Class A Invested Amount and the denominator of which is the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Class A Principal" shall mean the principal distributable in respect of
the Class A Certificates as calculated in accordance with subsection 4.7(a).
"Class A Required Amount" shall mean the amount determined by the Servicer
on each Business Day equal to the excess, if any, of (x) the sum of (i) Class A
Interest for the then current Monthly Period, (ii) any Carryover Class A
Interest previously due but not paid to the Class A Certificateholders on a
prior Distribution Date, (iii) if Green Tree or an Affiliate of Green Tree is no
longer the Servicer, the Class A Floating Allocation Percentage of the Servicing
Fee for the then current Monthly Period and (iv) the Class A Floating Allocation
Percentage of the Default Amount, if any, for such Business Day and, to the
extent not previously paid, for any previous Business Day in such Monthly Period
over (y) the Available Series 1995-1 Interest Collections plus any Excess
Interest Collections from other Series and any Transferor Interest Collections
allocated with respect to the amounts described in clauses (x)(i) through (iv).
-4-
<PAGE>
"Class A Scheduled Payment Date" shall mean the ________, 199__
Distribution Date.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.6(b).
"Class B Certificateholder" shall mean the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean the portion of the Series
1995-1 Certificateholders' Interest evidenced by the Class B Certificates.
"Class B Certificate Rate" shall mean ___% per annum above LIBOR determined
on November __, 1995 for the period from November __, 1995 through December 14,
1995, and from December 15, 1995, through January 14, 1996 and with respect to
each Interest Period thereafter, a per annum rate ___% in excess of LIBOR, as
determined on the related LIBOR Determination Date, but not in excess of ___%
per annum.
"Class B Certificates" shall mean any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit B hereto.
"Class B Controlled Accumulation Amount" shall mean $__________.
"Class B Controlled Distribution Amount" shall mean, with respect to any
Distribution Date, an amount equal to the Class B Controlled Accumulation Amount
plus the Class B Deficit Controlled Accumulation Amount determined on the
preceding Distribution Date, if any.
"Class B Daily Principal Amount" shall have the meaning specified in
subsection 4.9(c)(ii).
"Class B Deficit Controlled Accumulation Amount" shall mean zero on the
initial Distribution Date and, on any subsequent Distribution Date, the excess,
if any, of (i) the Class B Controlled Distribution Amount over (ii) (a) any
amount on deposit in the Excess Funding Account allocated to the Class B
Certificates on such day pursuant to subsection 4.9(d), (b) any amounts in
respect of ABC Investor Default Amounts or Class B Investor Charge-Offs, Class C
Investor Charge-Offs and Class D Investor Charge-Offs paid on such day and (c)
Shared Principal Collections allocable to the Class B Certificates, if any, and
(d) the product of the ABC Fixed/Floating Allocation Percentage and the
aggregate amount of Principal Collections collected during the preceding Monthly
Period.
"Class B Fixed/Floating Allocation Percentage" shall mean, with respect to
any Business Day, the percentage equivalent of a fraction, the numerator of
which is
-5-
<PAGE>
the Class B Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the
aggregate amount of Principal Receivables and the amount on deposit in the
Excess Funding Account at the end of the preceding Business Day and (b) the sum
of the numerators used to calculate the allocation percentages with respect to
Principal Collections for all Series.
"Class B Floating Allocation Percentage" shall mean, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class B Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the total amount of Principal
Receivables in the Trust and the amount on deposit in the Excess Funding Account
as of the end of the preceding Business Day and (b) when used with respect to
Principal Collections only, the sum of the numerators with respect to all
Classes of all Series then outstanding used to calculate the applicable
allocation percentage.
"Class B Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class B Certificates, which is $_________.
"Class B Interest" shall mean the interest distributable in respect of the
Class B Certificates as calculated in accordance with subsection 4.6(b).
"Class B Interest Shortfall" shall have the meaning specified in subsection
4.6(b).
"Class B Invested Amount" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class B Initial Invested Amount (i)
during the Revolving Period in connection with the addition of Receivables to
the Trust or (ii) at the end of the Revolving Period for deposit into the Excess
Funding Account, minus (b) the aggregate amount of principal payments made to
Class B Certificateholders prior to such Business Day, minus (c) the aggregate
amount of Class B Investor Charge-Offs for all prior Distribution Dates, minus
(d) the aggregate amount of Reallocated Class B Principal Collections for which
neither the Class D Invested Amount nor the Class C Invested Amount has been
reduced for all prior Business Days, plus (e) the sum of the aggregate amount
allocated and available on all prior Business Days pursuant to subsection
4.9(a)(x), and, with respect to such subsection and pursuant to subsections
4.10(a) and (b) of the Agreement, for the purpose of reinstating amounts
reduced pursuant to the foregoing clauses (c) and (d).
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.13(c).
"Class B Investor Percentage" shall mean, for any Distribution Date, (a)
with respect to Interest Receivables and Defaulted Receivables at any time or
Principal Receivables during the Revolving Period, the Class B Floating
Allocation Percentage
-6-
<PAGE>
and (b) with respect to Principal Receivables during the Controlled Accumulation
Period, the ABC Fixed/Floating Allocation Percentage.
"Class B Percentage" shall mean a fraction the numerator of which is the
Class B Invested Amount and the denominator of which is the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Class B Principal" shall mean the principal distributable in respect of
the Class B Certificates as calculated in accordance with subsection 4.7(b).
"Class B Principal Commencement Date" shall mean the earlier of (a) the
Distribution Date in the Controlled Accumulation Period on which the Class A
Invested Amount is paid in full or, if there are no Principal Collections
allocable to the Series 1995-1 Investor Certificates remaining after payments
have been made to the Class A Certificates on such Distribution Date, the
Distribution Date following the Distribution Date on which the Class A Invested
Amount is paid in full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in Sections 2.4(e), 9.2, 10.2, 12.1
or 12.2 of the Agreement and Section 3 of this Series Supplement.
"Class B Required Amount" shall mean the amount determined by the Servicer
on each Business Day equal to the excess, if any, of (x) the sum of (i) Class B
Interest for the then current Monthly Period, (ii) any Carryover Class B
Interest previously due but not paid to the Class B Certificateholders on a
prior Distribution Date, (iii) if Green Tree or an Affiliate of Green Tree is no
longer the Servicer, the Class B Floating Allocation Percentage of the Servicing
Fee for the then current Monthly Period and (iv) the Class B Floating Allocation
Percentage of the Default Amount, if any, for such Business Day and, to the
extent not previously paid, for any previous Business Day in such Monthly Period
over (y) the Available Series 1995-1 Interest Collections plus any Excess
Interest Collections from other Series and any Transferor Interest Collections
allocated with respect to the amounts described in clauses (x)(i) through (iv).
"Class B Scheduled Payment Date" shall mean the ________, 199__
Distribution Date.
"Class C Additional Interest" shall have the meaning specified in
subsection 4.6(c).
"Class C Certificateholder" shall mean the Person in whose name a Class C
Certificate is registered in the Certificate Register.
"Class C Certificateholders' Interest" shall mean the portion of the Series
1995-1 Certificateholders' Interest evidenced by the Class C Certificates.
-7-
<PAGE>
"Class C Certificate Rate" shall mean ___% per annum from November __, 1995
through December 14, 1995, and from December 15, 1995 through January 14, 1996
and with respect to each Interest Period thereafter, a per annum rate ___% in
excess of LIBOR as determined on the related LIBOR Determination Date, but in no
event in excess of ___% per annum.
"Class C Certificates" shall mean any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit C hereto.
"Class C Daily Principal Amount" shall have the meaning specified in
subsection 4.9(c)(iii).
"Class C Expected Final Payment Date" shall mean the __________, 199___
Distribution Date.
"Class C Fixed/Floating Allocation Percentage" shall mean, with respect to
any Business Day, the percentage equivalent of a fraction, the numerator of
which is the Class C Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the
aggregate amount of Principal Receivables and the amount on deposit in the
Excess Funding Account at the end of the preceding Business Day and (b) the sum
of the numerators used to calculate the allocation percentages with respect to
Principal Collections for all Series.
"Class C Floating Allocation Percentage" shall mean, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class C Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the total amount of Principal
Receivables in the Trust and the amount on deposit in the Excess Funding Account
as of the end of the preceding Business Day and (b) when used with respect to
Principal Collections only, the sum of the numerators with respect to all
Classes of all Series then outstanding used to calculate the applicable
allocation percentage.
"Class C Guaranty Payment" shall mean (i) with respect to any Distribution
Date prior to the Distribution Date on which the Class B Invested Amount is paid
in full, the amount, if any, by which the Class C Interest allocable to the
Class C Certificates with respect to any Interest Accrual Period exceeds the
amount available on such Distribution Date for payment to the Class C
Certificateholders; or (ii) with respect to any Distribution Date on or after
the Distribution Date on which the Class B Invested Amount has been paid in
full, the amount, if any, by which the sum of (a) the Class C Interest allocable
to the Class C Certificates with respect to any Interest Accrual Period and (b)
the Class C Principal allocable to the Class C Certificates on such
Distribution Date exceeds the amount available on such Distribution Date for
payment to the Class C Certificateholders.
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"Class C Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class C Certificates, which is $__________.
"Class C Interest" shall mean the interest distributable in respect of the
Class C Certificates as calculated in accordance with subsection 4.6(c).
"Class C Interest Shortfall" shall have the meaning specified in subsection
4.6(c).
"Class C Invested Amount" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class C Initial Invested Amount (i)
during the Revolving Period in connection with the addition of Receivables to
the Trust or (ii) at the end of the Revolving Period for deposit into the Excess
Funding Account, minus (b) the aggregate amount of principal payments made to
Class C Certificateholders prior to such Business Day, minus (c) the aggregate
amount of Class C Investor Charge-Offs for all prior Distribution Dates, minus
(d) the aggregate amount of Reallocated Class C Principal Collections for which
the Class D Invested Amount has not been reduced for all prior Business Days
plus (e) the sum of the aggregate amount allocated and available on all prior
Business Days pursuant to subsection 4.9(a)(xi) and, with respect to such
subsection, pursuant to subsections 4.10(a) and (b), for the purpose of
reinstating amounts reduced pursuant to the foregoing clauses (c) and (d).
"Class C Investor Charge-Offs" shall have the meaning specified in
subsection 4.13(b).
"Class C Investor Percentage" shall mean, for any Distribution Date, (a)
with respect to Interest Receivables and Defaulted Receivables at any time or
Principal Receivables during the Revolving Period, the Class C Floating
Allocation Percentage and (b) with respect to Principal Receivables during the
Controlled Accumulation Period, the ABC Fixed/Floating Allocation Percentage.
"Class C Limited Guaranty" shall mean the obligation of Green Tree to make
Class C Guarantee Payments pursuant to Section 4.16.
"Class C Percentage" shall mean a fraction the numerator of which is the
Class C Invested Amount and the denominator of which is the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Class C Principal" shall mean the principal distributable in respect of
the Class C Certificates as calculated in accordance with subsection 4.7(c).
"Class C Principal Commencement Date" shall mean the earlier of (a) the
Distribution Date in the Controlled Accumulation Period on which the Class B
Invested Amount is paid in full or, if there are no Principal Collections
allocable to the Series 1995-1 Investor Certificates remaining after payments
have been made to
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the Class B Certificates on such Distribution Date, the Distribution Date
following the Distribution Date on which the Class B Invested Amount is paid in
full and (b) the Distribution Date following a sale or repurchase of the
Receivables as set forth in Sections 2.4(e), 9.2, 10.2, 12.1 or 12.2 of the
Agreement and Section 3 of this Series Supplement.
"Class C Required Amount" shall mean the amount determined by the Servicer
on each Business Day equal to the excess, if any, of (x) the sum of (i) Class C
Interest for the then current Monthly Period, (ii) any Carryover Class C
Interest previously due but not paid to the Class C Certificateholders on a
prior Distribution Date, (iii) if Green Tree or an Affiliate of Green Tree is no
longer the Servicer, the Class C Floating Allocation Percentage of the Servicing
Fee for the then current Monthly Period and (iv) the Class C Floating Allocation
Percentage of the Default Amount, if any, for such Business Day and, to the
extent not previously paid, for any previous Business Day in such Monthly Period
over (y) the Available Series 1995-1 Interest Collections plus any Excess
Interest Collections from other Series and any Transferor Interest Collections
allocated with respect to the amounts described in clauses (x)(i) through (iv).
"Class D Certificateholder" shall mean the Person in whose name a Class D
Certificate is registered in the Certificate Register.
"Class D Certificateholders' Interest" shall mean the portion of the Series
1995-1 Certificateholders' Interest evidenced by the Class D Certificates.
"Class D Certificates" shall mean any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit D hereto.
"Class D Fixed/Floating Allocation Percentage" shall mean, with respect to
any Business Day, the percentage equivalent of a fraction, the numerator of
which is the Class D Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the
aggregate amount of Principal Receivables and the amount on deposit in the
Excess Funding Account as of the end of the preceding Business Day and (b) the
sum of the numerators used to calculate the allocation percentages with respect
to Principal Collections for all Series.
"Class D Floating Allocation Percentage" shall mean, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class D Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the total amount of Principal
Receivables and the amount on deposit in the Excess Funding Account at the end
of the preceding Business Day and (b) when used with respect to Principal
Collections only, the sum of the numerators with respect to all Classes of all
Series then outstanding used to calculate the applicable allocation percentage.
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"Class D Initial Invested Amount" shall mean the aggregate initial
principal amount of the Class D Certificates, which is $__________.
"Class D Invested Amount" shall mean, when used with respect to any
Business Day, an amount equal to (a) the Class D Initial Invested Amount, minus
(b) the aggregate amount of principal payments made to Class D
Certificateholders prior to such Business Day, minus (c) the aggregate amount of
Class D Investor Charge-Offs for all prior Distribution Dates, minus (d) the
aggregate amount of Reallocated Principal Collections for all prior Business
Days, plus (e) the sum of the aggregate amount allocated and available on all
prior Business Days pursuant to subsection 4.9(a)(xii) and, with respect to such
subsection, pursuant to subsections 4.10(a) and (b) for the purpose of
reinstating amounts reduced pursuant to the foregoing clauses (c) and (d).
"Class D Investor Charge-Offs" shall have the meaning specified in
subsection 4.13(a).
"Class D Investor Default Amount" shall mean an amount equal to the product
of (a) the Class D Floating Allocation Percentage applicable on such Business
Day and (b) the aggregate Default Amount identified since the prior reporting
date.
"Class D Investor Percentage" shall mean, for any Business Day, (a) with
respect to Interest Receivables and Defaulted Receivables at any time or
Principal Receivables during the Revolving Period, the Class D Floating
Allocation Percentage and (b) with respect to Principal Receivables during the
Controlled Accumulation Period, the Class D Fixed/Floating Allocation
Percentage.
"Class D Principal" shall mean the principal distributable in respect of
the Class D Certificates as calculated in accordance with subsection 4.7(d).
"Class D Principal Commencement Date" shall mean the earlier of (a) the
Distribution Date on which the Class C Invested Amount is paid in full or, if
there are no Principal Collections allocable to the Series 1995-1 Investor
Certificates remaining after payments have been made to the Class C Certificates
on such Distribution Date, the Distribution Date following the Distribution Date
on which the Class C Invested Amount is paid in full and (b) the Distribution
Date following a sale or repurchase of the Receivables as set forth in Sections
2.4(e), 9.2, 10.2, 12.1 and 12.2 of the Agreement and Section 3 of this Series
Supplement.
"Closing Date" shall mean November __, 1995.
"Controlled Accumulation Period" shall mean, with respect to the Series
1995-1 Certificates, unless a Pay Out Event shall have occurred with respect to
such Series prior thereto, the period commencing on the Controlled Accumulation
Period Commencement Date and ending upon the earliest to occur of (x) the
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payment in full to the Investor Certificateholders of the Invested Amount, and
(y) the Series 1995-1 Termination Date.
"Controlled Accumulation Period Commencement Date" shall mean, if the
Controlled Accumulation Period has not been postponed pursuant to Section __,
the ________, 199__ Distribution Date.
"Controlled Deposit Amount" shall mean, with respect to any Business Day,
an amount equal to the sum of (i) the Controlled Accumulation Amount for the
related Monthly Period plus (ii) the Accumulation Shortfall, if any, for the
related Monthly Period.
"Distribution Date" shall mean December 15, 1995 and the fifteenth day of
each month thereafter, or if such day is not a Business Day, the next succeeding
Business Day.
"Early Amortization Period" shall mean the period beginning on the earlier
of (a) the day on which a Pay Out Event occurs or is deemed to have occurred and
(b) the Class A Scheduled Payment Date if the Class A Invested Amount has not
been paid in full on such date, or the Class B Scheduled Payment Date if the
Class B Invested Amount has not been paid in full on such date, the Class C
Expected Final Payment Date if the Class C Invested Amount has not been paid in
full on such date, and ending on the earlier of (i) the date on which the Class
A Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount have been paid in full and (ii) the Termination
Date.
"Early Amortization Period Commencement Date" shall mean the earlier of (a)
the Class A Scheduled Payment Date if the Class A Invested Amount has not been
paid in full on such date or the Class B Scheduled Payment Date if the Class B
Invested Amount has not been paid in full on such date or (b) the Pay Out
Commencement Date.
"Enhancement" shall mean, with respect to the Class A Certificates, the
subordination of the Class B Invested Amount, the Class C Invested Amount, and
the Class D Invested Amount, with respect to the Class B Certificates, the
subordination of the Class C Invested Amount and the Class D Invested Amount,
and with respect to the Class C Certificates, the Limited Guaranty of Green Tree
and the subordination of the Class D Invested Amount.
"Excess Interest Collections" shall mean, with respect to any Business Day,
as the context requires, either (x) the amount described in subsection
4.9(a)(xiv) allocated to the Series 1995-1 Certificates but available to cover
shortfalls in amounts paid from Interest Collections for other Series, if any or
(y) the aggregate amount of Interest Collections allocable to other Series in
excess of the amounts necessary to make required payments with respect to such
Series, if any, and available to cover shortfalls with respect to the Series
1995-1 Certificates.
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"Expense Reserve Account" shall have the meaning specified in subsection
4.18(a).
"Expense Reserve Trigger" shall have the meaning specified in Section 4.17.
"Fixed/Floating Allocation Percentage" shall mean, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Invested Amount at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the sum of the aggregate amount of
Principal Receivables and the amount on deposit in the Excess Funding Account as
of the end of the preceding Business Day and (b) the sum of the numerators used
to calculate allocation percentages with respect to Principal Receivables for
all Series.
"Floating Allocation Percentage" shall mean, with respect to any Business
Day, the sum of the applicable Class A Floating Allocation Percentage, Class B
Floating Allocation Percentage, Class C Floating Allocation Percentage, and
Class D Floating Allocation Percentage for such Business Day.
"Initial Invested Amount" shall mean the aggregate initial principal amount
of the Investor Certificates of Series 1995-1, which is $__________.
"Interest Accrual Period" shall mean, with respect to a Distribution Date,
the period from and including the preceding Distribution Date to and excluding
such Distribution Date; provided, however, that the initial Interest Accrual
Period shall be the period from the Closing Date to and excluding the first
Distribution Date.
"Invested Amount" shall mean, when used with respect to any Business Day,
an amount equal to the sum of (a) the Class A Invested Amount as of such
Business Day, (b) the Class B Invested Amount as of such Business Day, (c) the
Class C Invested Amount as of such Business Day and (d) the Class D Invested
Amount as of such Business Day.
"Investor Certificateholder" shall mean the Holder of record of an Investor
Certificate of Series 1995-1.
"Investor Certificates" shall mean the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates.
"Investor Charge-Offs" shall mean the sum of Class A Investor Charge-Offs,
Class B Investor Charge-Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs.
"Investor Default Amount" shall mean, with respect to each Business Day, an
amount equal to the product of the Default Amount identified since the prior
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reporting date and the Floating Allocation Percentage applicable for such
Business Day.
"Investor Percentage" shall mean for any Business Day, (a) with respect to
Interest Receivables and Defaulted Receivables at any time or Principal
Receivables during the Revolving Period, the Floating Allocation Percentage and
(b) with respect to Principal Receivables during the Controlled Accumulation
Period, the Fixed/Floating Allocation Percentage.
"Issuance Date" shall mean the Closing Date.
"LIBOR" shall mean, for any Interest Period, the London interbank offered
quotations for one-month Dollar deposits determined by the Trustee for each
Interest Accrual Period in accordance with the provisions of Section 4.15.
"LIBOR Determination Date" shall mean the second Business Day prior to the
commencement of the second and each subsequent Interest Accrual Period. For
purposes of this definition, a Business Day is any day on which banks in London
and New York are open for the transaction of international business.
"Minimum Retained Percentage" shall mean 2%.
"Minimum Transferor Percentage" shall mean 0%; provided, however, that in
certain circumstances such percentage may be increased.
"Monthly Period" shall have the meaning specified in the Agreement, except
that the first Monthly Period with respect to the Series 1995-1 Certificates
shall begin on and include the Closing Date and shall end on and include
__________, 1995.
"Negative Carry Amount" shall have the meaning specified in subsection
4.10(a).
"Paying Agent" shall mean, for the Series 1995-1 Certificates, __________
and Banque de Luxembourg.
"Pay Out Commencement Date" shall mean the date on which a Trust Pay Out
Event is deemed to occur pursuant to Section 9.1 of the Agreement or a Series
1995-1 Pay Out Event is deemed to occur pursuant to Section 8 of this Series
Supplement.
"Portfolio Yield" shall mean for the Series 1995-1 Certificates, with
respect to any Monthly Period, the annualized percentage equivalent of a
fraction, the numerator of which is an amount equal to the sum of the aggregate
amount of Available Series 1995-1 Interest Collections for such Monthly Period
(minus the Floating Allocation Percentage of the portion of Interest Collections
for such period described in clause (D) of the definition thereof), calculated
on a cash basis, minus
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the aggregate Investor Default Amount for such Monthly Period, and the
denominator of which is the average daily Invested Amount during the preceding
Monthly Period.
"Principal Shortfalls" shall mean on any Business Day (x) for Series 1995-
1, (i) during the Controlled Accumulation Period on or prior to the Class C
Principal Commencement Date, the excess of the Class A Controlled Distribution
Amount or the Class B Controlled Distribution Amount, as applicable, over the
aggregate amount applied with respect thereto for such Business Day and for each
prior Business Day in such Monthly Period, and (ii) at all other times, the
Invested Amount of the class then receiving principal payments after the
application of Principal Collections on such Business Day or (y) for any other
Series the amounts specified as such in the Supplement for such other Series.
"Rating Agency" shall mean Standard & Poor's Ratings Services, a Division
of the McGraw-Hill Companies, Inc., and Moody's Investors Service, Inc.
"Reallocated Class B Principal Collections" shall have the meaning
specified in subsection 4.14(c).
"Reallocated Class C Principal Collections" shall have the meaning
specified in subsection 4.14(b).
"Reallocated Class D Principal Collections" shall have the meaning
specified in subsection 4.14(a).
"Reallocated Principal Collections" shall mean the sum of Reallocated Class
B Principal Collections, Reallocated Class C Principal Collections and
Reallocated Class D Principal Collections.
"Reassignment Amount" shall mean, with respect to any Distribution Date,
after giving effect to any deposits and distributions otherwise to be made on
such Distribution Date, the sum of (i) the Invested Amount on such Distribution
Date, (ii) accrued and unpaid interest on the unpaid principal balance of the
Series 1995-1 Certificates (calculated on the basis of the outstanding principal
balance of the Series 1995-1 Certificates and the Certificate Rate through the
day preceding such Distribution Date) and (iii) the amount of Additional
Interest, if any, for such Distribution Date and any Additional Interest
previously due but not distributed to the Series 1995-1 Certificateholders on a
prior Distribution Date.
"Required Amount" shall have the meaning specified in Section 4.10.
"Revolving Period" shall mean the period from and including the Closing
Date to, but excluding, the earlier of (a) the Controlled Accumulation Period
Commencement Date and the Early Amortization Period Commencement Date.
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"Scheduled Series 1995-1 Termination Date" shall mean the _________ 200__
Distribution Date.
"Series 1995-1" shall mean the Series of the Green Tree Floorplan
Receivables Master Trust represented by the Series 1995-1 Certificates.
"Series 1995-1 Certificateholder" shall mean the holder of record of any
Series 1995-1 Investor Certificate.
"Series 1995-1 Certificateholders' Interest" shall have the meaning
specified in Section 4.4.
"Series 1995-1 Pay Out Event" shall have the meaning specified in Section 8
of this Series Supplement.
"Series 1995-1 Termination Date" shall mean the earlier to occur of (i) the
day after the Distribution Date on which the Series 1995-1 Certificates are paid
in full, or (ii) the Scheduled Series 1995-1 Termination Date.
"Series Servicing Fee Percentage" shall mean 2.00% per annum.
"Servicing Fee" shall mean for any Monthly Period, an amount equal to the
product of (i) one-twelfth, (ii) the applicable Series Servicing Fee Percentage
and (iii) the Invested Amount as of the preceding Record Date, or, in the case
of the first Distribution Date, the Initial Invested Amount.
"Shared Principal Collections" shall mean, as the context requires, either
(i) the amount allocated to the Series 1995-1 Investor Certificates which, in
accordance with subsections 4.9(b) and 4.9(c)(v), may be applied in accordance
with Section 4.3(e) or (ii) the amounts allocated to the investor certificates
(other than Transferor Retained Certificates) of other Series which the
applicable Supplements for such Series specify are to be treated as "Shared
Principal Collections" and which may be applied to cover Principal Shortfalls
with respect to the Series 1995-1 Investor Certificates.
"Termination Payment Date" shall mean the earlier of the first Distribution
Date following the liquidation or sale of the Receivables as a result of an
Insolvency Event and the occurrence of the Scheduled Series 1995-1 Termination
Date.
"Transferor Interest Collections" shall mean on any Business Day the
product of (a) the Interest Collections for such Business Day, (b) the
Transferor Percentage and (c) the Series Allocation Percentage.
"Transferor Retained Certificates" shall mean investor certificates of any
Series, including the Class D Certificates, which the Transferor retains, but
only to the extent that and for so long as the Transferor is the Holder of such
Certificates.
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SECTION 3. Optional Repurchase.
(a) On any Distribution Date occurring after the date on which the Invested
Amount is reduced to 10% of the principal amount of the Certificates on the
Closing Date or less, the Transferor shall have the option, subject to the
condition set forth in paragraph (c), to purchase the entire, but not less than
the entire, Series 1995-1 Certificateholders' Interest, at a purchase price
equal to the Reassignment Amount for such Distribution Date.
(b) The Transferor shall give the Servicer and the Trustee at least 10
days' prior written notice of the Distribution Date on which the Transferor
intends to exercise such purchase option. Not later than 12:00 noon, New York
City time, on such Distribution Date the Transferor shall deposit the
Reassignment Amount into the Collection Account in immediately available funds.
Such purchase option is subject to payment in full of the Reassignment Amount.
The Reassignment Amount shall be distributed as set forth in Section 12.3 of the
Agreement.
(c) If at the time the Transferor exercises its purchase option hereunder
the Transferor's long-term unsecured debt has a rating lower than the lowest
investment grade rating of the Rating Agency, the Transferor shall deliver to
the Trustee on such Distribution Date an Opinion of Counsel (which must be an
independent outside counsel) to the effect that, in reliance on certain
certificates to the effect that the Series 1995-1 Certificateholders' Interest
purchased by the Transferor constitutes fair value for the consideration paid
therefor and as to the solvency of the Transferor, the purchase of the Series
1995-1 Certificateholders' Interest would not be considered a fraudulent
conveyance under applicable law.
SECTION 4. Delivery and Payment for the Series 1995-1 Certificates. The
Transferor shall execute and deliver the Series 1995-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1995-1 Certificates to or upon the order of the
Transferor when authenticated in accordance with Section 6.2 of the Agreement.
SECTION 5. Form of Delivery of Series 1995-1 Certificates. The Class A
Certificates, the Class B Certificates, the Class C Certificates and the Class D
Certificates, shall be delivered as Registered Certificates as provided in
Section 6.1 of the Agreement.
SECTION 6. Article IV of Agreement. Sections 4.1 and 4.3 of the Agreement
shall read in their entirety as provided in the Agreement. Section 4.2 of the
Agreement shall read in its entirety as provided in the Agreement except that
the following additional sentence shall be added at the end of subsection
4.2(b): "On the Initial Closing Date the Transferor shall make an initial
deposit to the Interest Funding Account in the amount of $__________." Article
IV of the Agreement
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(except for Sections 4.1, 4.2 and 4.3 thereof) shall read in its entirety as
follows and shall be applicable only to the Series 1995-1 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
--------------------------------
ALLOCATION AND APPLICATION OF COLLECTIONS
-----------------------------------------
Section 4.4 Rights of Certificateholders. The Series 1995-1 Certificates
shall represent undivided interests in the Trust, consisting of the right to
receive, to the extent necessary to make the required payments with respect to
such Series 1995-1 Certificates at the times and in the amounts specified in
this Agreement, (a) the Floating Allocation Percentage and the Fixed/Floating
Allocation Percentage (as applicable from time to time) of Collections available
in the Collection Account, (b) funds allocable to the Series 1995-1 Certificates
on deposit in the Excess Funding Account and (c) funds on deposit in the
Interest Funding Account, the Principal Account and the Distribution Account
(for such Series, the "Series 1995-1 Certificateholders' Interest"). The Class
B Invested Amount, the Class C Invested Amount and the Class D Invested Amount
shall be subordinated to the Class A Certificates, the Class C Invested Amount
and the Class D Invested Amount shall be subordinated to the Class B
Certificates, and the Class D Invested Amount shall be subordinated to the Class
C Certificates, in each case to the extent provided in this Article IV. The
Class B Certificates will not have the right to receive payments of principal
until the Class A Invested Amount has been paid in full. The Class C
Certificates will not have the right to receive payments of principal until the
Class A Invested Amount and the Class B Invested Amount have been paid in full.
The Class D Certificates will not have the right to receive payments of
principal until the Class A Invested Amount, the Class B Invested Amount and the
Class C Invested Amount have been paid in full.
Section 4.5 Collections and Allocation; Payments on Exchangeable
Transferor Certificate.
(a) Collections. The Servicer will apply or will instruct the Trustee to
apply all funds on deposit in the Collection Account and the Excess Funding
Account allocable to the Series 1995-1 Certificates, and all funds on deposit in
the Interest Funding Account, the Principal Account and the Distribution Account
maintained for this Series, as described in this Article IV.
(b) Payments to the Holder of the Exchangeable Transferor Certificate. On
each Business Day, the Servicer shall determine whether a Pay Out Event is
deemed to have occurred with respect to the Series 1995-1 Certificates, and the
Servicer shall allocate and pay Collections in accordance with the Daily Report
with respect to such Business Day to the Holder of the Exchangeable Transferor
Certificate as follows:
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(i) For each Business Day with respect to the Revolving Period, in
addition to amounts allocated and paid to the Holder of the Exchangeable
Transferor Certificate or pursuant to subsection 4.3(b) of the Agreement,
an amount equal (x) to the product of the Class D Floating Allocation
Percentage and the amount of Principal Collections on such Business Day,
minus (y) the Reallocated Class D Principal Collections;
(ii) For each Business Day with respect to the Controlled
Accumulation Period prior to the Business Day on which an amount equal to
the Class C Invested Amount has been deposited in the Principal Account to
be applied to the payment of Class C Principal, in addition to amounts
allocated and paid to the Holder of the Exchangeable Transferor Certificate
pursuant to subsection 4.3(b) of the Agreement, an amount equal to (x) the
product of the Class D Fixed/Floating Allocation Percentage and the amount
of Principal Collections on such Business Day minus (y) the Reallocated
Class D Principal Collections; and
(iii) For each Business Day on and after the day on which
Principal Collections are being deposited in the Principal Account pursuant
to Section 4.9(c)(iv), the amount of payments of Principal Collections made
to the Holder of the Exchangeable Transferor Certificate shall be
determined only as provided in subsection 4.3(b) of the Agreement.
Notwithstanding the foregoing, amounts payable to the Transferor pursuant
to subsection 4.5(b)(i) or (ii) shall instead be deposited in the Excess Funding
Account to the extent necessary to prevent the Transferor Interest from being
less than the Minimum Transferor Interest.
The allocations to be made pursuant to this subsection 4.5(b) also apply to
deposits into the Collection Account that are treated as Collections, including
payment of the reassignment price pursuant to Section 2.4(d) of the Agreement
and proceeds from the sale, disposition or liquidation of the Receivables
pursuant to Section 9.2, 10.2, 12.1 or 12.2 of the Agreement and Section 3 of
this Series Supplement. Such deposits to be treated as Collections will be
allocated as Interest Receivables or Principal Receivables as provided in the
Agreement.
Section 4.6 Determination of Monthly Interest for the Series 1995-1
Certificates.
(a) The amount of monthly interest (the "Class A Interest") allocable to
the Class A Certificates with respect to any Interest Accrual Period shall be an
amount equal to the product of (i) the Class A Certificate Rate and (ii) a
fraction, the numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 360 and (iii) the
principal balance of the Class A Certificates as of the close of business on the
first day of such Interest Accrual Period.
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On the Determination Date preceding each Distribution Date, the Servicer
shall determine an amount (the "Class A Interest Shortfall") equal to the
excess, if any, of (x) the Class A Interest for the Interest Accrual Period
applicable to the Distribution Date over (y) the amount available to be paid to
the Class A Certificateholders in respect of interest on such Distribution
Date. If there is a Class A Interest Shortfall with respect to any Distribution
Date, an additional amount ("Class A Additional Interest") shall be payable as
provided herein with respect to the Class A Certificates on each Distribution
Date following such Distribution Date, to and including the Distribution Date on
which such Class A Interest Shortfall is paid to Class A Certificateholders,
equal to the product of (i) the Class A Certificate Rate and (ii) such Class A
Interest Shortfall remaining unpaid calculated on the basis of a fraction, the
numerator of which is the actual number of days in the related Interest Accrual
Period and the denominator of which is 360. Notwithstanding anything to the
contrary herein, Class A Additional Interest shall be payable or distributed to
Class A Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest (the "Class B Interest") allocable to
the Class B Certificates with respect to any Interest Accrual Period shall be an
amount equal to the product of (i) the Class B Certificate Rate and (ii) a
fraction, the numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 360 and (iii) the Class
B Invested Amount as of the close of business on the first day of such Interest
Accrual Period; provided, however, that with respect to any Distribution Date
related to the Revolving Period the amount described in clause (iii) shall be
the outstanding principal balance of the Class B Certificates on the first day
of such Interest Accrual Period.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine an amount (the "Class B Interest Shortfall") equal to the
excess, if any, of (x) the aggregate Class B Interest for the Interest Accrual
Period applicable to the Distribution Date over (y) the amount available to be
paid to the Class B Certificateholders in respect of interest on such
Distribution Date. If there is a Class B Interest Shortfall with respect to any
Distribution Date, an additional amount ("Class B Additional Interest") shall be
payable as provided herein with respect to the Class B Certificates on each
Distribution Date following such Distribution Date, to and including the
Distribution Date on which such Class B Interest Shortfall is paid to Class B
Certificateholders, equal to the product of (i) the Class B Certificate Rate and
(ii) such Class B Interest Shortfall remaining unpaid calculated on the basis of
a fraction, the numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 360. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable or
distributed to Class B Certificateholders only to the extent permitted by
applicable law.
(c) The amount of monthly interest (for the Series 1995-1 Certificates, the
"Class C Interest") allocable to the Class C Certificates of the Series 1995-1
Certificates
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with respect to any Interest Accrual Period shall be an amount
equal to the product of (i) the Class C Certificate Rate and (ii) a fraction,
the numerator of which is the actual number of days in the related Interest
Accrual Period and the denominator of which is 360 and (iii) the Class C
Invested Amount as of the close of business on the first day of such Interest
Accrual Period; provided, however, that with respect to any Distribution Date
related to the Revolving Period the amount described in clause (iii) shall be
the outstanding principal balance of the Class C Certificates on the first day
of such Interest Accrual Period.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine an amount (the "Class C Interest Shortfall") equal to the
excess, if any, of (x) the aggregate Class C Interest for the Interest Accrual
Period applicable to the Distribution Date over (y) the amount available to be
paid to the Class C Certificateholders in respect of interest on such
Distribution Date. If there is a Class C Interest Shortfall with respect to any
Distribution Date, an additional amount ("Class C Additional Interest") shall be
payable as provided herein with respect to the Class C Certificates on each
Distribution Date following such Distribution Date, to and including the
Distribution Date on which such Class C Interest Shortfall is paid to Class C
Certificateholders, equal to the product of (i) the Class C Certificate Rate and
(ii) such Class C Interest Shortfall remaining unpaid (which amount shall be
reduced by any Class C Guaranty Payment made on such Distribution Date)
calculated on the basis of a fraction, the numerator of which is the actual
number of days in the related Interest Accrual Period and the denominator of
which is 360. Notwithstanding anything to the contrary herein, Class C
Additional Interest shall be payable or distributed to Class C
Certificateholders only to the extent permitted by applicable law.
Section 4.7 Determination of Principal Amounts.
(a) The amount of principal (the "Class A Principal") distributable from
the Distribution Account with respect to the Class A Certificates on each
Distribution Date during the Controlled Accumulation Period shall be equal to an
amount calculated as follows: the sum of (i) an amount equal to the product of
the ABC Fixed/Floating Allocation Percentage and the aggregate amount of
Principal Collections (less the amount of Reallocated Class B Principal
Collections and Reallocated Class C Principal Collections) with respect to the
preceding Monthly Period, (ii) any amount on deposit in the Excess Funding
Account allocated to the Class A Certificates pursuant to subsection 4.9(d) of
the Agreement, with respect to the preceding Monthly Period, (iii) the amount,
if any, allocated to the Class A Certificates pursuant to subsections 4.9(a)(v),
(vii), (x), (xi) and (xii) of the Agreement and, with respect to such
subsections, pursuant to subsections 4.10(a) and (b) and 4.14(a), (b) and (c) of
the Agreement, and (iv) the amount of Shared Principal Collections allocated to
the Class A Certificates with respect to the preceding Monthly Period pursuant
to Section 4.3(e) of the Agreement; provided, however, that with respect to any
Distribution Date during the Controlled Accumulation Period, Class A Principal
may not exceed the Class A Controlled Distribution
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Amount for such Distribution Date; provided, further, that with respect to any
Distribution Date, Class A Principal may not exceed the Class A Invested Amount;
provided, further, that with respect to the Scheduled Series 1995-1 Termination
Date, the Class A Principal shall be an amount equal to the Class A Invested
Amount.
(b) The amount of principal (the "Class B Principal") distributable from
the Distribution Account with respect to the Class B Certificates on each
Distribution Date on or after the Class A Scheduled Payment Date shall equal an
amount calculated as follows: the sum of (i) an amount equal to the product of
the ABC Fixed/ Floating Allocation Percentage and the aggregate amount of
Principal Collections (less the amount of Reallocated Class B Principal
Collections and Reallocated Class C Principal Collections) with respect to the
preceding Monthly Period (or, in the case of the first Distribution Date
following the date on which an amount equal to the Class A Invested Amount is
deposited in the Principal Account to be applied to the payment of Class A
Principal, the ABC Fixed/Floating Allocation Percentage of Principal Collections
from the date on which such deposit is made), (ii) any amount on deposit in the
Excess Funding Account allocated to the Class B Certificates pursuant to
subsection 4.9(d) of the Agreement with respect to the preceding Monthly Period,
(iii) the amount, if any, allocated to the Class B Certificates pursuant to
subsections 4.9(a)(v), (x), (xi) and (xii) of the Agreement and, with respect to
such subsections, pursuant to subsections 4.10(a) and (b) and 4.14(a) and (b) of
the Agreement with respect to such Distribution Date and (iv) the amount of
Shared Principal Collections allocated to the Class B Certificates with respect
to the preceding Monthly Period pursuant to Section 4.3(e) of the Agreement on
or after the Class A Scheduled Payment Date; provided, however, that, with
respect to any Distribution Date during the Controlled Accumulation Period,
Class B Principal may not exceed the Class B Controlled Distribution Amount for
such Distribution Date; provided, further, that with respect to any Distribution
Date, Class B Principal may not exceed the Class B Invested Amount; provided,
further, that with respect to the Scheduled Series 1995-1 Termination Date, the
Class B Principal shall be an amount equal to the Class B Invested Amount.
(c) The amount of principal (the "Class C Principal") distributable from
the Distribution Account with respect to the Class C Certificates on each
Distribution Date, beginning on or after the Class C Principal Commencement
Date, shall be an amount equal to and calculated as follows: the sum of (i) an
amount equal to the product of the ABC Fixed/ Floating Allocation Percentage and
the aggregate amount of Principal Collections (less the amount of Reallocated
Class C Principal Collections) with respect to the preceding Monthly Period (or,
in the case of the first Distribution Date following the date on which an amount
equal to the Class B Invested Amount is deposited in the Principal Account to be
applied to the payment of Class B Principal, the ABC Fixed/Floating Allocation
Percentage of Principal Collections from the date on which such deposit is
made), (ii) any amounts on deposit in the Excess Funding Account allocated to
the Class C Certificates pursuant to subsection 4.9(d) of the Agreement, with
respect to the preceding Monthly Period,
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(iii) the amount, if any, allocated to the Class C Certificates pursuant to
subsections 4.9(a)(v), (xi) and (xii) of the Agreement with respect to such
Distribution Date and (iv) the amount of Shared Principal Collections allocated
to the Class C Certificates with respect to the preceding Monthly Period
pursuant to Section 4.3(e) of the Agreement on and after the Class C Principal
Commencement Date; provided that with respect to any Distribution Date, Class C
Principal may not exceed the Class C Invested Amount; provided, further, that
with respect to the Scheduled Series 1995-1 Termination Date, the Class C
Principal shall be an amount equal to the Class C Invested Amount.
(d) The amount of principal (the "Class D Principal") distributable from
the Distribution Account with respect to the Class D Certificates on each
Distribution Date, beginning with the Class D Principal Commencement Date, shall
be an amount equal to and calculated as follows: the sum of (i) an amount equal
to the product of the Class D Fixed/Floating Allocation Percentage of Principal
Collections (less the amount of Reallocated Class D Principal Collections) with
respect to the preceding Monthly Period (or, in the case of the first
Distribution Date following the date on which an amount equal to the Class C
Invested Amount is deposited in the Principal Account to be applied to the
payment of Class C Principal, the Class D Fixed/Floating Allocation Percentage
of Principal Collections from the date on which such deposit is made), (ii) any
amount on deposit in the Excess Funding Account allocated to the Class D
Certificates pursuant to subsection 4.9(d) of the Agreement with respect to the
preceding Monthly Period, and (iii) the amount, if any, allocated to the Class D
Certificates pursuant to subsections 4.9(a)(vi) and (xii) of the Agreement and,
with respect to such subsections, pursuant to subsection 4.10(a) and (b) of the
Agreement with respect to such Distribution Date; provided, however, that with
respect to the Scheduled Series 1995-1 Termination Date, the Class D Principal
shall be an amount equal to the Class D Invested Amount.
Section 4.8 Shared Principal Collections. Shared Principal Collections
allocated to the Series 1995-1 Certificates and to be applied pursuant to
subsections 4.9(c)(i)(y), 4.9(c)(ii)(y), 4.9(c)(iii)(y) and 4.9(c)(iv)(z) for
any Business Day with respect to the Controlled Accumulation Period shall mean
an amount equal to the product of (x) Shared Principal Collections for all
Series for such Business Day and (y) a fraction, the numerator of which is the
Principal Shortfall for the Series 1995-1 Certificates for such Business Day and
the denominator of which is the aggregate amount of Principal Shortfalls for all
Series for such Business Day. For any Business Day with respect to the
Revolving Period, Shared Principal Collections allocated to the Series 1995-1
Certificates shall be zero.
Section 4.9 Application of Funds on Deposit in the Collection Account for
the Certificates.
(a) On each Business Day, the Servicer shall deliver to the Trustee a Daily
Report in which it shall instruct the Trustee to withdraw, and the Trustee,
acting in accordance with such instructions, shall withdraw the extent of the
amount of the
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Floating Allocation Percentage of Interest Collections available in the
Collection Account (the "Available Series 1995-1 Interest Collections") required
to be withdrawn from the Collection Account pursuant to subsections 4.9(a)(i)
through 4.9(a) (xiv).
(i) Class A Interest. On each Business Day during a Monthly Period,
the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account and deposit into the Interest
Funding Account for distribution on the next Distribution Date to the Class
A Certificateholders, to the extent of the Available Series 1995-1 Interest
Collections for such Business Day, an amount equal to the lesser of (x) the
Available Series 1995-1 Interest Collections and (y) the excess of (1) the
sum of Class A Interest and Carryover Class A Interest over (2) any amounts
with respect thereto previously deposited into the Interest Funding Account
on any prior Business Day during such Monthly Period. Notwithstanding
anything to the contrary herein, the portion of Carryover Class A Interest
that constitutes Class A Additional Interest shall be payable or
distributable to Class A Certificateholders only to the extent permitted by
applicable law.
(ii) Class B Interest. On each Business Day during a Monthly Period,
the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account and deposit into the Interest
Funding Account for distribution on the next Distribution Date to the Class
B Certificateholders, to the extent of any Available Series 1995-1 Interest
Collections remaining after giving effect to the withdrawal pursuant to
subsection 4.9(a)(i), an amount equal to the lesser of (x) any such
remaining Available Series 1995-1 Interest Collections and (y) the excess
of (1) the sum of Class B Interest and Carryover Class B Interest over (2)
any amounts with respect thereto previously deposited into the Interest
Funding Account on any prior Business Day during such Monthly Period.
Notwithstanding anything to the contrary herein, the portion of Carryover
Class B Interest that constitutes Class B Additional Interest shall be
payable or distributable to Class B Certificateholder only to the extent
permitted by applicable law.
(iii) Class C Interest. On each Business Day during a Monthly
Period, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account and deposit into the
Interest Funding Account for distribution on the next Distribution Date to
the Class C Certificateholders, to the extent of any Available Series
1995-1 Interest Collections remaining after giving effect to the withdrawal
pursuant to subsections 4.9(a)(i) and (ii), an amount equal to the lesser
of (x) any such remaining Available Series 1995-1 Interest Collections and
(y) the excess of (1) the sum of Class C Interest and Carryover Class C
Interest over (2) any amounts with respect thereto previously deposited
into the Interest Funding Account on any prior Business Day during such
Monthly Period. Notwithstanding anything to the contrary herein, the
portion of Carryover
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Class C Monthly Interest that constitutes Class C Additional Interest shall
be payable or distributable to Class C Certificateholders only to the
extent permitted by applicable law.
(iv) Investor Servicing Fee. On each Business Day on which Green Tree
or an Affiliate of Green Tree is not the Servicer, the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer, to the extent of any
Available Series 1995-1 Interest Collections remaining after giving effect
to the withdrawals pursuant to subsections 4.9(a)(i) through (iii), an
amount equal to the lesser of (x) any such remaining Available Series
1995-1 Interest Collections and (y) the excess of (i) the Servicing Fee for
such Monthly Period plus any unpaid Servicing Fees from prior Monthly
Periods over (ii) any amounts with respect thereto previously distributed
to the Servicer during such Monthly Period.
(v) ABC Investor Default Amount. On each Business Day, the Trustee,
acting in accordance with instructions from the Servicer, shall withdraw
from the Collection Account, to the extent of any Available Series 1995-1
Interest Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (iv), an amount equal to the
lesser of (x) any such remaining Available Series 1995-1 Interest
Collections and (y) the sum of (1) the aggregate ABC Investor Default
Amount for such Business Day plus (2) the unpaid ABC Investor Default
Amount for each previous Business Day during such Monthly Period, such
amount to be (A) treated as Shared Principal Collections during the
Revolving Period, and (B) to the extent allocated to Class A Principal,
Class B Principal or Class C Principal pursuant to Section 4.7 during the
Controlled Accumulation Period, deposited in the Principal Account for
distribution to the applicable Class or Classes of Certificateholders on
the next Distribution Date.
(vi) Class D Investor Default Amount. On each Business Day, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account, to the extent of any Available Series
1995-1 Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (v), an amount equal
to the lesser of (x) any such remaining Available Series 1995-1 Interest
Collections and (y) the sum of (1) the aggregate Class D Investor Default
Amount for such Business Day plus (2) the unpaid Class D Investor Default
Amount for each previous Business Day during such Monthly Period, such
amount to be (A) paid to the Transferor during the Revolving Period and the
Controlled Accumulation Period prior to the payment in full of the Class C
Invested Amounts and (B) to the extent allocated to Class D Principal
pursuant to Section 4.7 during the Controlled Accumulation Period following
the payment in full of the Class C Invested Amount, deposited in the
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Principal Account for distribution to the Class D Certificateholders on the
next Distribution Date.
(vii) Reimbursement of Class A Investor Charge-Offs. On each
Business Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account, to the extent of any
Available Series 1995-1 Interest Collections remaining after giving effect
to the withdrawals pursuant to subsections 4.9(a)(i) through (vi), an
amount equal to the lesser of (x) any such remaining Available Series
1995-1 Interest Collections and (y) the unreimbursed Class A Investor
Charge-Offs, if any, will be applied to reimburse Class A Investor
Charge-Offs, such amount during the Revolving Period to be treated as
Shared Principal Collections, and during the Controlled Accumulation Period
on and prior to the day on which an amount equal to the Class A Invested
Amount is deposited in the Principal Account, to be deposited in the
Principal Account for distribution to the Class A Certificateholders on the
next Distribution Date.
(viii) Unpaid Class B Interest. On each Business Day, the Trustee,
acting in accordance with the instructions from the Servicer, shall
withdraw from the Collection Account and deposit in the Interest Funding
Account for distribution to the Class B Certificateholders on the next
Distribution Date, to the extent of any Available Series 1995-1 Interest
Collections remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (vii), an amount equal to the lesser of (x)
any such remaining Available Series 1995-1 Interest Collections and (y) the
sum of (1) the amount of interest which has accrued with respect to the
outstanding aggregate principal amount of the Class B Certificates at the
Class B Certificate Rate but which has not been deposited into the Interest
Funding Account or paid to the Class B Certificateholders and (2) any
additional interest (to the extent permitted by applicable law) at the
Class B Certificate Rate accrued on interest that was due during a prior
Monthly Period pursuant to this subsection but was not deposited in the
Interest Funding Account or paid to the Class B Certificateholders.
(ix) Unpaid Class C Interest. On each Business Day, the Trustee,
acting in accordance with the instructions from the Servicer, shall
withdraw from the Collection Account and deposit in the Interest Funding
Account for distribution to the Class C Certificateholders on the next
Distribution Date, to the extent of any Available Series 1995-1 Interest
Collections remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (viii), an amount equal to the lesser of (x)
any such remaining Available Series 1995-1 Interest Collections and (y) the
sum of (1) the amount of interest which has accrued with respect to the
outstanding aggregate principal amount of the Class C Certificates at the
Class C Certificate Rate but which has not been deposited into the Interest
Funding Account or paid to the Class C Certificateholders and (2) any
additional interest (to the extent permitted by
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applicable law) at the Class C Certificate Rate accrued on interest that
was due during a prior Monthly Period pursuant to this subsection but was
not deposited in the Interest Funding Account or paid to the Class C
Certificateholders.
(x) Reimbursement of Class B Investor Charge-Offs. On each Business
Day, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the extent of any Available
Series 1995-1 Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (ix), an amount equal
to the lesser of (x) any such remaining Available Series 1995-1 Interest
Collections and (y) the unreimbursed amount by which the Class B Invested
Amount has been reduced on prior Business Days pursuant to clauses (c) and
(d) of the definition of Class B Invested Amount, if any, such amount, (i)
during the Revolving Period, to be treated as Shared Principal Collections,
(ii) during the Controlled Accumulation Period, on and prior to the day on
which an amount equal to the Class A Invested Amount is deposited in the
Principal Account, to be deposited in the Principal Account for
distribution to the Class A Certificateholders on the next Distribution
Date, and (iii) during the Controlled Accumulation Period, on and after the
day on which such deposit has been made and on and prior to the day on
which the Class B Invested Amount has been deposited in the Principal
Account, to be deposited in the Principal Account for payment to the Class
B Certificateholders on the next Distribution Date.
(xi) Reimbursement of Class C Investor Charge-Offs. On each Business
Day, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the extent of any Available
Series 1995-1 Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (x), an amount equal
to the lesser of (x) any such remaining Available Series 1995-1 Interest
Collections and (y) the unreimbursed amount by which the Class C Invested
Amount has been reduced on prior Business Days pursuant to clauses (c) and
(d) of the definition of Class C Invested Amount, if any, such amount, (i)
during the Revolving Period, to be treated as Shared Principal Collections,
(ii) during the Controlled Accumulation Period, on and prior to the day on
which an amount equal to the Class A Invested Amount is deposited in the
Principal Account, to be deposited in the Principal Account for
distribution to the Class A Certificateholders on the next Distribution
Date, (iii) during the Controlled Accumulation Period, on and prior to the
day on which an amount equal to the Class B Invested Amount is deposited in
the Principal Account, to be deposited in the Principal Account for
distribution to the Class B Certificateholders on the next Distribution
Date and (iv) during the Controlled Accumulation Period, on and after the
day on which such deposit has been made and on and prior to the day on
which an amount equal to the Class B Invested Amount is deposited in the
Principal Account, to be
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deposited in the Principal Account for payment to the Class C
Certificateholders on the next Distribution Date.
(xii) Reimbursement of Class D Investor Charge-Offs. On each
Business Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account, to the extent of any
Available Series 1995-1 Interest Collections remaining after giving effect
to the withdrawals pursuant to subsections 4.9(a)(i) through (xi), an
amount equal to the lesser of (x) any such remaining Available Series
1995-1 Interest Collections and (y) the unreimbursed amount by which the
Class D Invested Amount has been reduced on prior Business Days pursuant to
clauses (c) and (d) of the definition of Class D Invested Amount, if any,
such amount, (i) during the Revolving Period, and during the Controlled
Accumulation Period on and prior to the day on which an amount equal to the
Class C Invested Amount is deposited in the Principal Account, paid to the
Transferor and (ii) on and after the day such deposit to the Principal
Account with respect to Class C Invested Amount has been made, deposited in
the Principal Account for payment to the Class D Certificateholders.
(xiii) Investor Servicing Fee. On each Business Day, if Green Tree
or an Affiliate of Green Tree is the Servicer, the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer, to the extent of
Available Series 1995-1 Interest Collections for such Business Day (after
giving effect to the withdrawals pursuant to subsections 4.9(a)(i) through
(xii) of the Agreement), the Investor Servicing Fee accrued since the
preceding Business Day plus any Investor Servicing Fee due with respect to
any prior Business Day but not distributed to the Servicer.
(xiv) Excess Interest Collections. Any amounts remaining in the
Collection Account to the extent of any Available Series 1995-1 Interest
Collections remaining after giving effect to the withdrawals pursuant to
subsection 4.9(a)(i) through (xiii), first, shall, following the occurrence
of an Expense Reserve Trigger, be deposited in the Expense Reserve Account
in the amount specified in subsection 4.18(b) of the Agreement and second,
shall be treated as Excess Interest Collections, and the Servicer shall
direct the Trustee in writing on each Business Day to withdraw such amounts
from the Collection Account and to first make such amounts available to pay
to Certificateholders of other Series to the extent of shortfalls, if any,
in amounts payable to such certificateholders from Interest Collections
allocated to such other Series, then to pay any unpaid commercially
reasonable costs and expenses of a Successor Servicer, if any, and then pay
any remaining Excess Interest Collections to the Transferor.
(b) For each Business Day with respect to the Revolving Period, the funds
on deposit in the Collection Account to the extent of the product of (i) the sum
of
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the Class A Floating Allocation Percentage, the Class B Floating Allocation
Percentage and the Class C Floating Allocation Percentage and (ii) Principal
Collections with respect to such Business Day (less the amount of Reallocated
Class C Principal Collections and Reallocated Class B Principal Collections on
such Business Day) will be treated as Shared Principal Collections and applied,
pursuant to the written direction of the Servicer in the Daily Report for such
Business Day, as provided in Section 4.3(e) of the Agreement.
(c) For each Business Day on and after the Controlled Accumulation Period
Commencement Date, the amount of funds on deposit in the Collection Account as
described below will be distributed, pursuant to the written direction of the
Servicer in the Daily Report for such Business Day, in the following priority:
(i) on and prior to the day on which an amount equal to the Class A
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class A Principal, an amount (not in excess of the Class
A Invested Amount) equal to the sum of (v) the product of the ABC Fixed/
Floating Allocation Percentage and Principal Collections in the Collection
Account at the end of the preceding Business Day (less the amount thereof
to be applied as Reallocated Class B Principal Collections or Reallocated
Class C Principal Collections on such Business Day), (w) any amount on
deposit in the Excess Funding Account allocated to the Class A Certificates
on such Business Day pursuant to subsection 4.9(d), (x) amounts to be paid
pursuant to subsections 4.9(a)(v), (vii), (x), (xi) and (xii) of the
Agreement from Available Series Interest Collections and from amounts
available pursuant to subsections 4.10(a) and (b) and 4.14(a), (b) and (c)
of the Agreement on such Business Day and (y) the amount of Shared
Principal Collections allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day, will be deposited into
the Principal Account;
(ii) on and after the day on which an amount equal to the Class A
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class A Principal, an amount (not in excess of the Class
B Invested Amount) equal to the sum of (v) an amount equal to the product
of the ABC Fixed/Floating Allocation Percentage and Principal Collections
in the Collection Account at the end of the preceding Business Day (less
the amount thereof to be applied as Reallocated Class B Principal
Collections or Reallocated Class C Principal Collections on such Business
Day), (w) any amount on deposit in the Excess Funding Account allocated to
the Class B Certificates on such Business Day pursuant to subsection
4.9(d), (x) the amount, if any, allocated to be paid to the Class B
Certificates pursuant to subsections 4.9(a)(v), (x), (xi) and (xii) of the
Agreement from Available Series Interest Collections and from amounts
available pursuant to subsections 4.10(a) and (b) and 4.14(a) and (b) of
the Agreement with respect to such Business Day and (y) the amount of
Shared Principal Collections allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business
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Day (such sum, the "Class B Daily Principal Amount") will be deposited into
the Principal Account;
(iii) on and after the day on which an amount equal to the Class B
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class B Principal, an amount (not in excess of the Class
C Invested Amount) equal to the sum of (v) an amount equal to the product
of the ABC Fixed/Floating Allocation Percentage and Principal Collections
in the Collection Account at the end of the preceding Business Day (less
the amount thereof to be applied as Reallocated Class C Principal
Collections on such Business Day), (w) any amount on deposit in the Excess
Funding Account allocated to the Class C Certificates on such Business Day
pursuant to subsection 4.9(d), (x) the amount, if any, allocated to be paid
to the Class C Certificates pursuant to subsections 4.9(a)(v), (xi) and
(xii) of the Agreement from Available Series Interest Collections and from
amounts available pursuant to subsections 4.10(a) and (b) and 4.14(a) of
the Agreement with respect to such Business Day and (y) the amount of
Shared Principal Collections allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day (such sum, the "Class C
Daily Principal Amount") will be deposited into the Principal Account;
(iv) on and after the day on which an amount equal to the Class C
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class C Principal, an amount equal to the sum of (w) an
amount equal to the product of the Class D Fixed/Floating Allocation
Percentage and Principal Collections in the Collection Account at the end
of the preceding Business Day (less the amount thereof to be applied as
Reallocated Class D Principal Collections on such Business Day), (x) any
amount on deposit in the Excess Funding Account allocated to the Class D
Certificates on such Business Day pursuant to subsection 4.9(d), (y) the
amount, if any, allocated to be paid to the Class D Certificates pursuant
to subsections 4.9(a)(vi) and (xii) of the Agreement from Available Series
Interest Collections and from amounts available pursuant to subsections
4.10(a) and (b) of the Agreement with respect to such Business Day and (z)
the amount of Shared Principal Collections allocated to the Series 1995-1
Certificates in accordance with Section 4.8 on such Business Day (such sum,
the "Class D Daily Principal Amount") will be distributed to the Class D
Certificateholders; and
(v) an amount equal to the excess, if any, of (A) the sum of the
amounts described in clauses (i)(v) and (x), (ii)(v) and (x) and (iii)(v)
and (x) above over (B) the sum of Class A Principal, Class B Principal and
Class C Principal will be treated as Shared Principal Collections and
applied as provided in subsection 4.3(e) of the Agreement.
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(d) On the first Business Day of the Controlled Accumulation Period, funds
on deposit in the Excess Funding Account will be deposited in the Principal
Account. Such amounts will be allocated in the following order of priority (i)
to the Class A Certificates in an amount not to exceed the Class A Principal
after subtracting therefrom any amounts to be deposited in the Principal
Account with respect thereto pursuant to subsections 4.9(c)(i)(v), (x) and (y),
(ii) to the Class B Certificates in an amount not to exceed the Class B
Principal after subtracting therefrom any amounts to be deposited in the
Principal Account with respect thereto pursuant to subsections 4.9(c)(ii)(v),
(x) and (y), and (iii) to the Class C Certificates in an amount not to exceed
the Class C Principal after subtracting therefrom any amounts to be deposited in
the Principal Account with respect thereto pursuant to subsections
4.9(c)(iii)(v), (x) and (y). On and after the Class D Principal Commencement
Date any amounts remaining on deposit in the Excess Funding Account and
allocated to the Series 1995-1 Certificates will be deposited in the Principal
Account in an amount not to exceed the Class D Invested Amount after subtracting
therefrom any amounts to be deposited in the Principal Account with respect
thereto pursuant to subsections 4.9(c)(iv)(v), (x), (y) and (z).
Section 4.10 Coverage of Required Amount for the Series 1995-1
Certificates.
(a) To the extent that any amounts are on deposit in the Excess Funding
Account on any Business Day, the Servicer shall apply Transferor Interest
Collections in an amount equal to the excess of (x) the product of (a) the Base
Rate, (b) the amount on deposit in the Excess Funding Account and (c) the number
of days elapsed since the previous Business Day divided by the actual number of
days in such year over (y) the aggregate amount of all earnings since the
previous Business Day available from the Cash Equivalents in which funds on
deposit in the Excess Funding Account are invested (the Negative Carry Amount")
in the manner specified for application of Available Series 1995-1 Interest
Collections in subsections 4.9(a) (i) through (xiii).
(b) To the extent that on the first Business Day following a Monthly Period
payments are being made pursuant to any of subsections 4.9(a) (i) through
(xiii), respectively, and the full amount to be paid pursuant to any such
subsection receiving payments on such Business Day for such prior Monthly Period
is not paid in full on such Business Day, the Servicer shall apply all or a
portion of the Excess Interest Collections from other Series with respect to
such Business Day for such prior Monthly Period allocable to the Series 1995-1
Certificates in an amount equal to the excess of the full amount to be allocated
or paid pursuant to the applicable subsection over the amount applied with
respect thereto from Available Series 1995-1 Interest Collections and Transferor
Interest Collections on such Business Day (the "Required Amount"). Excess
Interest Collections allocated to the Series 1995-1 Certificates for any
Business Day shall mean an amount equal to the product of (x) Excess Interest
Collections available from all other Series for such Business Day for the prior
Monthly Period and (y) a fraction, the numerator of which is the Required Amount
for such Business Day for the prior Monthly Period
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and the denominator of which is the aggregate amount of shortfalls in required
amounts or other amounts to be paid from Interest Collections for all Series for
such Business Day.
Section 4.11 Payment of Certificate Interest. On each Transfer Date, the
Trustee, acting in accordance with instructions from the Servicer set forth in
the Daily Report for such day, shall withdraw the amount on deposit in the
Interest Funding Account with respect to the prior Monthly Period allocable to
the Series 1995-1 Certificates and deposit such amount in the Distribution
Account. On each Distribution Date, the Paying Agent shall pay in accordance
with Section 5.1 of the Agreement to (x) the Class A Certificateholders from the
Distribution Account such amount deposited into the Distribution Account on the
related Transfer Date allocable thereto pursuant to subsection 4.9(a)(i), (y)
the Class B Certificateholders from the Distribution Account the amount
deposited into the Distribution Account allocable thereto pursuant to
subsections 4.9(a)(ii) and (viii) and (z) the Class C Certificateholders from
the Distribution Account the amount deposited into the Distribution Account
allocable thereto pursuant to subsections 4.9(a)(iii) and (ix).
Section 4.12 Payment of Certificate Principal.
(a) On the Transfer Date preceding each Distribution Date with respect to
the Controlled Accumulation Period, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
withdraw from the Principal Account and deposit in the Distribution Account, to
the extent of funds available, an amount equal to the Class A Principal for such
Distribution Date. On each Distribution Date with respect to the Controlled
Accumulation Period, the Paying Agent shall pay in accordance with Section 5.1
to the Class A Certificateholders from the Distribution Account such amount
deposited into the Distribution Account on the related Transfer Date.
(b) On the Transfer Date preceding the Class A Scheduled Payment
Commencement Date and each Distribution Date thereafter, the Trustee, acting in
accordance with instructions from the Servicer set forth in the Daily Report for
such day, shall withdraw from the Principal Account and deposit in the
Distribution Account, to the extent of funds available, an amount equal to the
Class B Principal for such Distribution Date. On the Class A Scheduled Payment
Date, after the payment of any principal amounts to the Class A Certificates on
such day, and on each Distribution Date thereafter until the Class B Invested
Amount is paid in full, the Paying Agent shall pay in accordance with Section
5.1 to the Class B Certificateholders from the Distribution Account such amount
deposited into the Distribution Account on the related Transfer Date.
(c) On the Transfer Date preceding the Class C Principal Commencement Date
and each Distribution Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
withdraw from the Principal Account and deposit in the Distribution Account an
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amount equal to the lesser of the Class C Invested Amount and the amount on
deposit in the Principal Account allocable to the Series 1995-1 Certificates
(after giving effect to transfers pursuant to subsection 4.12(a) and (b)). On
the Class C Principal Commencement Date, after the payment of any principal
amounts to the Class B Certificates on such day, and on each Distribution Date
thereafter until the Class C Invested Amount is paid in full, the Paying Agent
shall pay in accordance with Section 5.1 to the Class C Certificateholders from
the Distribution Account such amount deposited into the Distribution Account on
the related Transfer Date.
(d) On the Transfer Date preceding the Class D Principal Commencement Date
and each Business Day thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
make payments of principal to the Class D Certificateholders in accordance with
subsection 4.9(c)(iv) of the Agreement.
Any amounts remaining in the Principal Account and allocable to the Series
1995-1 Certificates, after the Class D Invested Amount has been paid in full,
will be treated as Shared Principal Collections and applied in accordance with
Section 4.3(e) of the Agreement.
Section 4.13 Investor Charge-Offs.
(a) If, on any Determination Date, the aggregate Investor Default Amount,
if any, for each Business Day in the preceding Monthly Period exceeded the
Available Series 1995-1 Interest Collections applied to the payment thereof
pursuant to subsections 4.9(a)(v) and (vi) of the Agreement and the amount of
Transferor Interest Collections and Excess Interest Collections allocated
thereto pursuant to Section 4.10 of the Agreement, and the amount of Reallocated
Principal Collections applied with respect thereto pursuant to Section 4.14 of
the Agreement, the Class D Invested Amount will be reduced by the amount by
which the remaining aggregate Investor Default Amount exceeds the amount applied
with respect thereto during such preceding Monthly Period (a "Class D Investor
Charge-Off").
(b) In the event that any such reduction of the Class D Invested Amount
would cause the Class D Invested Amount to be a negative number, the Class D
Invested Amount will be reduced to zero, and, the Class C Invested Amount will
be reduced by the amount by which the Class D Invested Amount would have been
reduced below zero, but not more than the aggregate Investor Default Amount for
such Monthly Period (a "Class C Investor Charge-Off").
(c) In the event that any such reduction of the Class C Invested Amount
would cause the Class C Invested Amount to be a negative number, the Class C
Invested Amount will be reduced to zero, and, the Class B Invested Amount will
be reduced by the amount by which the Class C Invested Amount would have been
reduced below zero, but not more than the remaining aggregate Investor Default
Amount for such Monthly Period (a "Class B Investor Charge-Off").
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(d) In the event that any such reduction of the Class B Invested Amount
would cause the Class B Invested Amount to be a negative number, the Class B
Invested Amount will be reduced to zero, and the Class A Invested Amount will be
reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not more than the remaining aggregate Investor Default
Amount for such Monthly Period (a "Class A Investor Charge-Off").
Section 4.14 Reallocated Principal Collections for the Series 1995-1
Certificates.
(a) On each Business Day, the Servicer will determine an amount equal to
the lesser of (i) the Class D Invested Amount, (ii) the product of (x)(I) during
the Revolving Period, the Class D Floating Allocation Percentage or (II) during
the Controlled Accumulation Period, the Class D Fixed/Floating Allocation
Percentage and (y) the amount of Principal Collections with respect to such
Business Day and (iii) an amount equal to the sum of (a) the remaining Class A
Required Amount, if any, with respect to the prior Monthly Period, (b) the
remaining Class B Required Amount, if any, with respect to the prior Monthly
Period and (c) the remaining Class C Required Amount, if any, with respect to
the prior Monthly Period (such amount called "Reallocated Class D Principal
Collections") and shall apply Principal Collections in an amount equal to such
amount first to the components of the Class A Required Amount, then to the
components of the Class B Required Amount and then to the components of the
Class C Required Amount in the same priority as amounts are applied to such
components from Available Series 1995-1 Interest Collections pursuant to
subsection 4.9(a).
(b) On each Business Day, the Servicer will apply or cause the Trustee to
apply an amount equal to the lesser of (i) the Class C Invested Amount, (ii) the
product of (x) (I) during the Revolving Period, the Class C Floating Allocation
Percentage or (II) during the Controlled Accumulation Period, the Class C Fixed/
Floating Allocation Percentage and (y) the amount of Principal Collections for
such Business Day and (iii) an amount equal to the sum of (a) the remaining
Class A Required Amount, if any, with respect to the prior Monthly Period over
the amount of Reallocated Class D Principal Collections applied with respect
thereto for such prior Monthly Period and (b) the remaining Class B Required
Amount, if any, with respect to the prior Monthly Period over the amount of
Reallocated Class D Principal Collections applied with respect thereto for such
prior Monthly Period (such amount called Reallocated Class C Principal
Collections") and shall apply Principal Collections in an amount equal to such
amount first to the remaining components of the Class A Required Amount and then
to the remaining components of the Class B Required Amount in the same priority
as amounts are applied to such components from Available Series 1995-1 Interest
Collections pursuant to subsection 4.9(a).
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(c) On each Business Day, the Servicer will apply or cause the Trustee to
apply an amount equal to the lesser of (i) the Class B Invested Amount, (ii) the
product of (x)(I) during the Revolving Period, the Class B Floating Allocation
Percentage or (II) during the Controlled Accumulation Period, the Class B Fixed/
Floating Allocation Percentage and (y) the amount of Principal Collections for
such Business Day and (iii) an amount equal to the excess, if any, of the
remaining Class A Required Amount, if any, with respect to the prior Monthly
Period over the sum of the amount of Reallocated Class D Principal Collections
and Reallocated Class C Principal Collections applied with respect thereto for
the prior Monthly Period (such amount called "Reallocated Class B Principal
Collections") shall apply Principal Collections equal to such amount to the
remaining components of the Class A Required Amount in the same priority as
amounts are applied to such components from Available Series 1995-1 Interest
Collections pursuant to subsection 4.9(a).
Section 4.15 Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee will determine LIBOR on
the basis of quotations of the offered rates for one-month United States Dollar
deposits provided by four major banks in the London interbank market selected by
the Servicer (the "Reference Banks") as of 11:00 A.M. (London time) on such
LIBOR Determination Date as such quotations appear on Telerate Page 3875 of the
Dow Jones Telerate Service (or such other page as may replace Telerate Page 3875
on that service for the purpose of displaying London interbank offered rates of
major banks). LIBOR as determined by the Trustee is the arithmetic mean of such
quotations (rounded, if necessary, to the nearest whole multiple of 0.0625% per
annum).
(b) If, on any LIBOR Determination Date, at least two but fewer than all of
the Reference Banks provide quotations, LIBOR will be determined in accordance
with (a) above on the basis of the offered quotations of those Reference Banks
providing such quotations.
(c) If, on the LIBOR Determination Date, only one or none of the Reference
Banks provides such offered quotations, LIBOR shall be:
(i) the rate per annum (rounded, as aforesaid) that the Trustee
determines to be either (x) the arithmetic mean of the offered quotations
that leading banks in The City of New York selected by the Servicer are
quoting at or about 11:00 A.M. London time on the relevant LIBOR
Determination Date for one month United States Dollar deposits to the
principal London office of each of the Reference Banks or those of them
(being at least two in number) to which such offered quotations are, in the
opinion of the Servicer, being so quoted or (y) in the event that the
Trustee can determine no such arithmetic mean, the arithmetic mean of the
offered quotations that leading banks in The City of New York selected by
the Servicer are quoting at or about 11:00
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A.M. London time on such LIBOR Determination Date to leading European banks
for one-month Dollar deposits; or
(ii) if the banks selected as aforesaid by the Servicer are not
quoting as described in clause (i) above, LIBOR for such Interest Accrual
Period will be LIBOR as determined on the previous LIBOR Determination
Date.
(d) The Class A Certificate Rate, the Class B Certificate Rate and the
Class C Certificate Rate applicable to the then current and the immediately
preceding Interest Accrual Periods may be obtained by any Series 1995-1
Certificateholder by telephoning the Trustee at its Corporate Trust Office at
(___) _______.
(e) On each LIBOR Determination Date, the Trustee shall send to the
Servicer by facsimile notification of LIBOR for the following Interest Accrual
Period. Following the listing of the Class A Certificates and the Class B
Certificates on the Luxembourg Stock Exchange and for so long as such
Certificates are so listed, the Trustee shall cause the Class A Certificate Rate
and the Class B Certificate Rate as well as the amount of Class A Monthly
Interest and Class B Monthly Interest applicable to an Interest Period to be
provided to the Luxembourg Stock Exchange as soon as possible after its
determination but in no event later than the first day of such Interest Accrual
Period.
Section 4.16 Class C Limited Guaranty.
(a) No later than the third Business Day prior to each Distribution Date,
the Servicer (if other than Green Tree) shall notify Green Tree of the amount of
the Class C Guaranty Payment (if any) for such Distribution Date. No later than
the Business Day preceding each Distribution Date, Green Tree shall deposit the
Class C Guaranty Payment, if any, for such Distribution Date into the
Distribution Account.
(b) The obligations of Green Tree to provide the Class C Limited Guaranty
under the Agreement shall terminate on the Distribution Date on which the Class
C Invested Amount has been paid in full.
(c) The obligation of Green Tree to make the Class C Guaranty Payments in
subsection (a) above shall be unconditional and irrevocable. Green Tree
acknowledges that its obligation to make the Class C Guaranty Payments described
in subsection (a) above shall be deemed a guarantee by Green Tree of
indebtedness of the Trust for money borrowed from the Class C
Certificateholders.
(d) If Green Tree fails to make a Class C Guaranty Payment in whole or in
part, Green Tree or the Transferor shall promptly notify the Trustee, and the
Trustee shall promptly notify the Rating Agency.
Section 4.17 Expense Reserve. If with respect to any Monthly Period the
amount by which the Portfolio Yield exceeds the Base Rate is less than 2% (the
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"Expense Reserve Trigger") the Trustee shall deposit on each Business Day and
after the Determination Date related to such Monthly Period in the Expense
Reserve Account from amounts available therefor pursuant to subsection
4.9(a)(xiv) of the Agreement, an aggregate amount equal to $50,000.
Section 4.18 Establishment of Expense Reserve Account.
(a) The Servicer shall, upon the occurrence of an Expense Reserve Trigger,
establish and maintain or cause to be established and maintained with a
Qualified Institution, which may be the Trustee, in the name of the Trustee, on
behalf of the Certificateholders, the "Expense Reserve Account," which shall be
a segregated trust account with the corporate trust department of such Qualified
Institution, bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders. The Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Expense Reserve Account and in all proceeds thereof. The Expense Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Certificateholders. If, at any time, the institution holding the
Expense Reserve Account ceases to be a Qualified Institution, the Trustee shall
within 20 Business Days establish a new Expense Reserve Account meeting the
conditions specified above with a Qualified Institution, and shall transfer any
cash or any investments to such new Expense Reserve Account. From the date such
new Expense Reserve Account is established, it shall be the "Expense Reserve
Account."
(b) Administration of Expense Reserve Account. The Servicer shall on each
Business Day following the occurrence of an Expense Reserve Trigger, deposit in
the Expense Reserve Account an amount equal to the excess of $50,000 over the
amount on deposit in the Expense Reserve Account to the extent of funds
available therefor pursuant to subsection 4.9(a) (xiv). Funds on deposit in the
Expense Reserve Account shall be withdrawn by the Servicer or the Trustee and
applied solely to the payment of expenses incurred by the Transferor. Amounts
on deposit in the Expense Reserve Account may be subsequently released therefrom
and paid to the Transferor to the extent that such amounts exceed $50,000. The
amount on deposit in the Reserve Account may also be released therefrom and paid
to the Transferor on the Series 1995-1 Termination Date.
(c) Investment on Funds in Expense Reserve Account. Funds on deposit in
the Expense Reserve Account shall be invested in Cash Equivalents by the Trustee
(or, at the direction of the Trustee, by the Servicer on behalf of the Trustee)
at the direction of the Servicer. Funds on deposit in the Expense Reserve
Account on any Distribution Date, after giving effect to any withdrawals from
the Expense Reserve Account, shall be invested in Cash Equivalents that will
mature so that such funds will be available for withdrawal on or prior to the
following Transfer Date. The proceeds of any such investments shall be invested
in Cash Equivalents that will mature so that such funds will be available for
withdrawal on or prior to the following Transfer Date.
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SECTION 7. Article V of the Agreement. Article V of the Agreement shall
read in its entirety as follows and shall be applicable only to the Series 1995-
1 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
-------------------------------------
CERTIFICATEHOLDERS
------------------
Section 5.1 Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c)) to each Class A
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(e) or in Section 12.3 respecting a final distribution) such
Certificateholder's Pro Rata share (based on the aggregate Undivided Interests
represented by Class A Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to the Class A
Certificateholders pursuant to Sections 4.11 and 4.12 of the Agreement by check
mailed to each Class A Certificateholder at such Certificateholder's address as
it appears on the Certificate Register or, in the case of Class A
Certificateholders holding Class A Certificates evidencing Undivided Interests
aggregating not less than 80% of the Invested Amount, by wire transfer, at the
expense of such Class A Certificateholder, to an account or accounts designated
by such Class A Certificateholder by written notice given to the Paying Agent
not less than five days prior to the related Distribution Date; provided,
however, that the final payment in retirement of the Class A Certificates will
be made only upon presentation and surrender of the Class A Certificates at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.3.
(b) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c)) to each Class B
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(e) or in Section 12.3 respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by Class B Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to the Class B
Certificateholders pursuant to Section 4.11 and 4.12 of the Agreement by check
mailed to each Class B Certificateholder at such Certificateholder's address as
it appears on the Certificate Register or, in the case of Class B
Certificateholders holding Class B Certificates evidencing Undivided Interest
aggregating not less than 80% of the Invested Amount, by wire transfer, at the
expense of such Class B Certificateholder, to an account or accounts designated
by such Class B Certificateholder by written notice given to the Paying Agent
not less
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than five days prior to the related Distributed Date; provided, however, that
the final payment in retirement of the Class B Certificates will be made only
upon presentation and surrender of the Class B Certificates at the office or
offices specified in the notice of such final distribution delivered by the
Trustee pursuant to Section 12.3.
(c) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c)) to each Class C
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(e) or in Section 12.3 respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by Class C Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to the Class C
Certificateholders pursuant to Section 4.11 and 4.12 of the Agreement by wire
transfer to each Class C Certificateholder to an account or accounts designated
by such Class C Certificateholder by written notice given to the Paying Agent
not less than five days prior to the related Distribution Date; provided,
however, that the final payment in retirement of the Class C Certificates will
be made only upon presentation and surrender of the Class C Certificates at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.3.
Section 5.2 Certificateholders' Statement.
(a) On the 15th day of each calendar month (or if such day is not a
Business Day the next succeeding Business Day), the Paying Agent shall forward
to each Certificateholder and the Rating Agencies a statement substantially in
the form of Exhibit C prepared by the Servicer and delivered to the Trustee and
the Paying Agent on the preceding Determination Date setting forth the following
information (which, in the case of (i), (ii) and (iii) below, shall be stated on
the basis of an original principal amount of $1,000 per Certificate and, in the
case of (ix) and (x), shall be stated on an aggregate basis and on the basis of
an original principal amount of $1,000 per Certificate):
(i) the total amount distributed;
(ii) the amount of such distribution allocable to Certificate
Principal;
(iii) the amount of such distribution allocable to Certificate
Interest;
(iv) the amount of Principal Collections received in the Collection
Account during the preceding Monthly Period and allocated in respect of the
Class A Certificates, the Class B Certificates, the Class C Certificates
and the Class D Certificates, respectively;
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(v) the amount of Interest Collections processed during the preceding
Monthly Period and allocated in respect of the Class A Certificates, the
Class B Certificates, the Class C Certificates and the Class D
Certificates, respectively;
(vi) the aggregate amount of Principal Receivables, the Invested
Amount, the Class A Invested Amount, the Class B Invested Amount, the Class
C Invested Amount, the Class D Invested Amount, the Floating Allocation
Percentage and, during the Controlled Accumulation Period, the ABC
Fixed/Floating Allocation Percentage, Class B Fixed/Floating Allocation
Percentage, or Class C Fixed/Floating Allocation Percentage as applicable,
with respect to the Principal Receivables in the Trust as of the end of the
day on the last day of the preceding Monthly Period;
(vii) the aggregate outstanding balance of Receivables which are
current, and those between (i) 30 and 59 days (ii) 60 and 89 days and (iii)
90 days or more delinquent in each case as of the end of the day on last
day of the preceding Monthly Period;
(viii) the aggregate Investor Default Amount for the preceding
Monthly Period;
(ix) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs for the preceding Monthly Period;
(x) the amount of the Servicing Fee for the preceding Monthly Period;
(xi) the amount of Reallocated Class B Principal Collections,
Reallocated Class C Principal Collections and Reallocated Class D Principal
Collections as of the last day of the preceding Monthly Period;
(xii) the amount of funds in the Excess Funding Account as of the
last day of the Monthly Period immediately preceding the Distribution Date;
and
(xiii) the amount of the Class C Guaranty Fee for the preceding
Monthly Period, if any.
(b) Annual Certificateholders' Tax Statement. On or before January 20 of
each calendar year, beginning with calendar year 1996, the Paying Agent shall
distribute to each Person who at any time during the preceding calendar year was
a Series 1995-1 Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular report to
Series 1995-1 Certificateholders, as set forth in subclauses (i), (ii) and (iii)
above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a
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Series 1995-1 Certificateholder, together with, on or before January 31 of each
year, beginning in 1996, such other customary information (consistent with the
treatment of the Certificates as debt) as the Trustee or the Servicer deems
necessary or desirable to enable the Series 1995-1 Certificateholders to prepare
their tax returns. Such obligations of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Internal Revenue
Code as from time to time in effect.
SECTION 8. Series 1995-1 Pay Out Events. The occurrence of any of the
following events shall, immediately upon the occurrence thereof without notice
or other action on the part of the Trustee or the Series 1995-1
Certificateholders, be deemed to be a Pay Out Event solely with respect to
Series 1995-1:
(a) on any Determination Date, the Transferor Interest for the next
Distribution Date will be reduced to an amount less than the Minimum
Transferor Interest on such Determination Date, after giving effect to the
distributions to be made on the next Distribution Date;
(b) any Servicer Default occurs;
(c) on any Determination Date, the average of the Monthly Payment
Rates for the three preceding Monthly Periods where the Monthly Payment
Rate for a Monthly Period is the percentage obtained by dividing the
aggregate of the Receivables balances (without deducting therefrom any
discount portion) collected during such Monthly Period by the average daily
aggregate Receivables balance (without deducting therefrom any discount
portion) for such Monthly Period, is less than 15%;
(d) the failure to pay the outstanding principal amount of the Class
A, Class B and Class C Certificates by the Class A Scheduled Payment Date,
Class B Scheduled Payment Date or the Class C Expected Final Payment Date,
as applicable;
(e) the ratio (expressed as a percentage) of (i) the average for each
month of the net losses on the Receivables (exclusive of the Ineligible
Receivables) owned by the Trust (i.e., gross losses less recoveries on any
Receivables (including, without limitation, recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds)) during any three consecutive
calendar months to (ii) the average of the month-end aggregate balances of
such Receivables (without deducting therefrom the discount portion) for
such three-month period, exceeds 5% on an annualized basis; provided, that
this clause (e) may be amended or waived with the consent of the Transferor
and each Rating Agency and without the consent of any Certificateholder
(including the Series 1995-1 Certificateholders); or
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(f) the sum of all Eligible Investments and amounts on deposit in the
Excess Funding Account represents more than 50% of the total assets of the
Trust on each of six or more consecutive Determination Dates, after giving
effect to all payments made or to be made on the Distribution Date next
succeeding each such respective Determination Date.
SECTION 9. Series 1995-1 Termination. The right of the Series 1995-1
Certificateholders to receive payments from the Trust will terminate on the
first Business Day following the Series 1995-1 Termination Date unless such
Series is an Affected Series as specified in subsection 12.1(c) of the Agreement
and the sale contemplated therein has not occurred by such date, in which event
the Series 1995-1 Certificateholders shall remain entitled to receive proceeds
of such sale when such sale occurs.
SECTION 10. Legends; Transfer and Exchange; Restrictions on Transfer of
Series 1995-1 Certificates; Tax Treatment.
(a) Each Class B Certificate, Class C Certificate and Class D Certificate
will bear a legend substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT, UNLESS SUCH PURCHASER, AT ITS EXPENSE,
DELIVERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF
COUNSEL SATISFACTORY TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
A CLASS B CERTIFICATE, CLASS C CERTIFICATE OR CLASS D CERTIFICATE BY SUCH
PURCHASER WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE
"ASSETS OF THE BENEFIT PLAN" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
TRANSFEROR OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT, SUCH PURCHASER IS NOT
(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 I OF ERISA, (II) A PLAN DESCRIBED IN
SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
(III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY.
(b) Each Class C Certificate will bear a legend substantially in the
following form:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE
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<PAGE>
"SECURITIES ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE HOLDER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A ("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE
REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, OR TO THE TRANSFEROR. EACH CERTIFICATE OWNER BY ACCEPTING A
BENEFICIAL INTEREST IN THIS CERTIFICATE IS DEEMED TO REPRESENT THAT IT IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF
ANOTHER QIB.
(c) Each Class D Certificate will bear a legend substantially in the
following form:
THIS CERTIFICATE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OF ANY
STATE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
REGISTERED PURSUANT TO OR EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT
AND ANY OTHER APPLICABLE SECURITIES LAW. GREEN TREE FLOORPLAN FUNDING
CORP. SHALL BE PROHIBITED FROM TRANSFERRING ANY INTEREST IN OR PORTION OF
THIS CERTIFICATE UNLESS, PRIOR TO SUCH TRANSFER, IT SHALL HAVE DELIVERED TO
THE TRUSTEE AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH PROPOSED TRANSFER
WILL NOT ADVERSELY AFFECT THE FEDERAL, MINNESOTA OR DELAWARE INCOME TAX
CHARACTERIZATION OF ANY OUTSTANDING SERIES OF INVESTOR CERTIFICATES OR THE
TAXABILITY (OR TAX CHARACTERIZATION) OF THE TRUST UNDER FEDERAL, MINNESOTA
OR DELAWARE INCOME TAX LAWS. IN NO EVENT SHALL THE TRANSFEROR BE PERMITTED
TO TRANSFER ANY INTEREST IN OR PORTION OF THIS CERTIFICATE IF, AFTER GIVING
EFFECT TO SUCH PROPOSED TRANSFER, TAKING INTO ACCOUNT THE CERTIFICATES
WHOSE TRANSFER IS PROPOSED, MORE THAN 20% (BY INVESTED AMOUNT AND BY VALUE)
OF THE OUTSTANDING CERTIFICATES ISSUED BY THE TRUST WITH RESPECT TO WHICH
NO OPINION OF COUNSEL WAS ISSUED THAT THE APPLICABLE CLASS WOULD BE TREATED
AS DEBT FOR FEDERAL INCOME TAX PURPOSES
-43-
<PAGE>
(INCLUDING THE EXCHANGEABLE TRANSFEROR CERTIFICATE AND EACH TRANSFEROR
RETAINED CLASS) WOULD NOT BE BENEFICIALLY OWNED BY GREEN TREE FLOORPLAN
FUNDING CORP.
(d) Upon surrender for registration of transfer of a Class C Certificate at
the office of the Transfer Agent and Registrar, accompanied by a certification
by the Class C Certificateholder substantially in the form attached as Exhibit D
(if the new purchaser is a "qualified institutional buyer" as defined in Rule
144A under the Securities Act of 1933) and by a written instrument of transfer
in the form approved by the Transferor and the Trustee (it being understood
that, until notice to the contrary is given to Class C Certificateholders, the
Transferor and the Trustee shall each be deemed to have approved the form of
instrument of transfer, if any printed on any definitive Class C Certificate),
executed by the registered owner, in person or by such Class C
Certificateholder's attorney thereunto duly authorized in writing, such Class C
Certificate shall be transferred upon the register, and the Transferor shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee one or more new registered Class C Certificates of any
authorized denominations and of a like aggregate principal amount and tenor.
Transfers and exchanges of Class C Certificates shall be subject to such
restrictions as shall be set forth in the text of the Class C Certificates and
such reasonable regulations as may be prescribed by the Transferor. Successive
registrations and registrations of transfers as aforesaid may be made from time
to time as desired, and each such registration shall be noted on the register.
(e) Green Tree Floorplan Funding Corp. shall be prohibited from
transferring any interest in or portion of the Class D Certificates unless,
prior to such transfer, it shall have delivered to the Trustee an Opinion of
Counsel to the effect that such proposed transfer will not adversely affect the
Federal, Minnesota or Delaware income tax characterization of any outstanding
Series of Investor Certificates or the taxability (or tax characterization) of
the Trust under Federal, Minnesota or Delaware income tax laws. In no event
shall the Transferor be permitted to transfer any interest in or portion of the
Class D Certificates if, after giving effect to such proposed transfer, taking
into account the certificates whose transfer is proposed, more than 20% (by
Invested Amount and by value) of the outstanding certificates issued by the
Trust with respect to which no Opinion of Counsel was issued that the applicable
class would be treated as debt for federal income tax purposes (including the
Exchangeable Transferor Certificate and each Transferor Retained Class) would
not be beneficially owned by Green Tree Floorplan Funding Corp. In no event
shall any interest in or portion of the Class D Certificates be transferred to
Green Tree. As a condition to transfer of an interest in or portion of the
Class D Certificates, the transferee shall be required to agree not to institute
against, or join any other Person in instituting against, the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after all Investor Certificates are paid in full. The
Transferor shall provide prompt written notice to the Rating Agencies of any
such transfer.
-44-
<PAGE>
(f) No transfer of a Class B Certificate, Class C Certificate or Class D
Certificate will be permitted to be made to a Benefit Plan unless such Benefit
Plan, at its expense, delivers to the Trustee, the Servicer and the Transferor
an opinion of counsel satisfactory to them to the effect that the purchase or
holding of a Class B Certificate, Class C Certificate or Class D Certificate by
such Benefit Plan will not result in the assets of the Trust being deemed to be
"assets of the Benefit Plan" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee, the
Transferor or the Servicer to any obligation in addition to those undertaken in
the Agreement. Unless such opinion is delivered, each person acquiring a Class
B Certificate, Class C Certificate or Class D Certificate or the beneficial
ownership of a Class B Certificate, Class C Certificate or Class D Certificate
will be deemed to represent to the Trustee, the Transferor and the Servicer that
it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA)
that is subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Code, or (iii) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity.
(g) The Class C Certificateholders shall comply with their obligations
under Section 3.7 of the Agreement with respect to the tax treatment of the
Class C Certificates, except to the extent that a relevant taxing authority has
disallowed such treatment.
SECTION 11. Ratification of Agreement.
(a) As supplemented by this Series Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
(b) For so long as any of the Class C Certificates are outstanding, each of
the Transferor, the Servicer and the Trustee agree to cooperate with each other
to provide to any Class C Certificateholders and to any prospective purchaser of
Class C Certificates designated by such a Class C Certificateholder upon the
request of such Class C Certificateholder or prospective purchaser, any
information required to be provided to such holder or prospective purchaser to
satisfy the condition set forth in Rule 144A(d)(4) under the Securities Act.
SECTION 12. Registration of the Class A Certificates under the Securities
Exchange Act of 1934. The Transferor shall cause the Class A Certificates to be
registered under the Securities Exchange Act, as amended, on or before _______,
1996 and thereafter maintain such registration until the Class A Invested Amount
has been reduced to zero.
SECTION 13. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
-45-
<PAGE>
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 14. GOVERNING LAW. THIS SERIES SUPPLEMENT 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 15. Instructions in Writing. All instructions or other
communications given by the Servicer or any other person to the Trustee pursuant
to this Series Supplement shall be in writing, and, with respect to the
Servicer, may be included in a Daily Report or Settlement Statement.
-46-
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series 1995-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By:________________________________
Name:
Title:
GREEN TREE FINANCIAL
CORPORATION, Servicer
By:________________________________
Name:
Title:
TRUSTEE
By:________________________________
Name:
Title:
-47-
<PAGE>
Exhibit A
FORM OF CLASS A INVESTOR CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS 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.
No. R-1 $________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOATING RATE FLOORPLAN RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS A
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them.
This certifies that CEDE & Co. (the "Certificateholder") is the registered
owner of a fractional undivided interest in the Green Tree Floorplan Receivables
Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of ___________, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) among Green Tree Floorplan Funding
Corp., as Transferor (the "Transferor"), Green Tree, as Servicer, and
______________, as Trustee (the "Trustee"), and the Series 1995-1 Supplement,
dated as of ______________, 1995 (the "Series 1995-1 Supplement"), among the
Transferor, Green Tree as Servicer and the Trustee. The Pooling and Servicing
Agreement, as supplemented by the Series 1995-1 Supplement, is herein referred
to as the "Agreement"). The corpus of the Trust consists of all of the
Transferor's right, title and interest in, to and under the Trust Property (as
defined in the Agreement).
A-1
<PAGE>
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class A" (the "Class A Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class A Certificates, the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class B (the "Class B Certificates" and
collectively with the Class A Certificates (the "Offered Certificates") and the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class C (the "Class C Certificates") with the
intention that the Offered Certificates and the Class C Certificates will
qualify under applicable tax law as indebtedness, and both the Transferor and
each holder of a Class A Certificate (a "Class A Certificateholder") or any
interest therein by acceptance of its Certificate or any interest therein,
agrees to treat the Class A Certificates for purposes of federal, state and
local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness.
No principal will be payable to the Class A Certificateholders until the
Class A Scheduled Payment Date in the Controlled Accumulation Period. No
principal will be payable to the Class B Certificateholders, Class C
Certificateholders or Class D Certificateholders until all principal payments
have been made to the Class A Certificateholders.
Each Class A Certificate represents the right to receive interest at the
rate of ___% per annum above LIBOR determined on November __, 1995 for the
period from November __, 1995 through December 14, 1995, and at a rate equal to
___% per annum above LIBOR determined on the related LIBOR Determination Date
for the period from December 15, 1995 through January 14, 1996 and with respect
to each Interest Accrual Period thereafter, but in no event in excess of ___%
per annum (such rate, as in effect from time to time, the "Class A Certificate
Rate"). Interest on the Certificates will accrue from the Closing Date and will
be distributed on December 15, 1995, and on the 15th day of each month
thereafter, or if such day is not a business day, on the next succeeding
business day (each, a "Distribution Date"), in an amount equal to the product of
(a) the actual number of days in the related Interest Accrual Period divided by
360, (b) the Class A Certificate Rate and (c) the outstanding principal balance
of the Class A Certificates as of the preceding Record
A-2
<PAGE>
Date (or in the case of the first Distribution Date, the initial Class A
Invested Amount).
On the earlier of the _______ 15, 199__ Distribution Date or the first
Distribution Date following the occurrence of a Pay Out Event, interest and
principal will be distributed to the Class A Certificateholders monthly on each
Distribution Date prior to the Series Termination Date. Interest for any
Distribution Date will include accrued interest at the Class A Certificate Rate
from and including the preceding Distribution Date or, in the case of the first
Distribution Date from and including the Closing Date, to but excluding such
Distribution Date. Interest for any Distribution Date due but not paid on any
Distribution Date will be due on the next succeeding Distribution Date together
with, to the extent permitted by applicable law, additional interest on such
amount at the Class A Certificate Rate.
"Class A Invested Amount" means an amount equal to (a) the initial
principal balance of the Class A Certificates, minus (b) the aggregate amount of
principal payments made to Class A Certificateholders pursuant to such date, and
minus (c) the aggregate amount of Class A Investor Charge-Offs for all prior
Distribution Dates, equal to the amount by which the Class A Invested Amount has
been reduced to fund the Investor Default Amount on all prior Distribution Dates
and plus (d) the aggregate amount of Available Series Interest Collections,
Transferor Interest Collections, Excess Interest Collections and Reallocated
Principal Collections applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clause (c).
Subject to the Agreement, payments of principal are limited to the unpaid
Class A Invested Amount of the Class A Certificates, which may be less than the
unpaid balance of the Class A Certificates pursuant to the terms of the
Agreement. All principal of and interest on the Class A Certificates is due and
payable no later than the _______ 15, _____ Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series 1995-1 Termination Date neither the Trust
nor the Transferor will have any further obligation to distribute principal or
interest on the Class A Certificates. In the event that the Class A Invested
Amount is greater than zero on the Series 1995-1 Termination Date, the Trustee
will sell or cause to be sold, to the extent necessary, an amount of interests
in the Receivables or certain of the Receivables up to 110% of the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount at the close of business on such date (but not more
than the total amount of Receivables allocable to the Investor Certificates),
and shall pay the proceeds to the Class A Certificateholders pro rata in final
payment of the Class A Certificates, then to the Class B Certificateholders pro
rata in final payment of the Class B Certificates, then to the Class C
Certificateholders pro rata in final payment of the Class C Certificates and
finally to the Class D Certificateholders pro rata in final payment of the Class
D Certificates.
A-3
<PAGE>
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed under its official seal.
GREEN TREE FLOORPLAN
FUNDING CORP.
By:____________________________________________
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
TRUSTEE
By:____________________________________________
Name:
Title:
A-4
<PAGE>
Exhibit B
FORM OF CLASS B INVESTOR CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT UNLESS SUCH PURCHASER, AT ITS EXPENSE, DELIVERS TO
THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF COUNSEL SATISFACTORY
TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE BY SUCH
PURCHASER WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "ASSETS
OF THE BENEFIT PLAN" OR SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND
SERVICING AGREEMENT, SUCH PURCHASER IS NOT (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 I OF ERISA,
(II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS
BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
B-1
<PAGE>
No. R-1 $_________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOATING RATE FLOORPLAN RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS B
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them.
This certifies that CEDE & CO. (the "Certificateholder") is the registered
owner of a fractional undivided interest in the Green Tree Floorplan Receivables
Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of ________, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) among Green Tree Floorplan Funding
Corp., as Transferor (the "Transferor"), Green Tree, as Servicer, and
______________, as Trustee (the "Trustee"), and the Series 1995-1 Supplement,
dated as of ____________, 1995 (the "Series 1995-1 Supplement"), among the
Transferor, Green Tree as Servicer and the Trustee. The Pooling and Servicing
Agreement, as supplemented by the Series 1995-1 Supplement, is herein referred
to as the "Agreement." The corpus of the Trust consists of all of the
Transferor's right, title and interest in, to and under the Trust Property (as
defined in the Agreement).
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class B" (the "Class B Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class B Certificates, the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class A (the "Class A Certificates" and
collectively with the Class B Certificates the "Offered Certificates") and the
Green Tree Floorplan
B-2
<PAGE>
Receivables Master Trust Floating Rate Floorplan Receivable Trust Certificates,
Series 1995-1, Class C (the "Class C Certificates") with the intention that the
Offered Certificates will qualify under applicable tax law as indebtedness, and
both the Transferor and each holder of a Class B Certificate (a "Class B
Certificateholder") or any interest therein by acceptance of its Certificate or
any interest therein, agrees to treat the Class B Certificates for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness.
No principal will be payable to the Class B Certificateholders until the
Class B Scheduled Payment Date, which is the Distribution Date either on or
following the Distribution Date on which the Class A Invested Amount had been
paid in full. No principal will be payable to the Class B Certificateholders
until all principal payments have been made to the Class A Certificateholders.
No principal payments will be made to the Class C Certificateholder until the
Distribution Date either on or following the Distribution Date on which the
Class B Invested Amount has been paid in full.
Each Class B Certificate represents the right to receive interest at the
rate of ___% per annum above LIBOR determined on November __, 1995 for the
period from November __, 1995 through December 14, 1995, and at a rate equal to
___% per annum above LIBOR determined on the related LIBOR Determination Date
for the period from December 15, 1995 through January 14, 1996 and with respect
to each Interest Accrual Period thereafter, but in no event in excess of ___%
per annum (such rate, as in effect from time to time, the "Class B Certificate
Rate") on the 15th day of each month thereafter, or if such day is not a
business day, on the next succeeding business day (each, a "Distribution Date"),
in an amount equal to the product of (a) the actual number of days in the
related Interest Accrual Period divided by 360, (b) the Class B Certificate Rate
and (c) the outstanding principal balance of the Class B Certificates as of the
preceding Record Date (or in the case of the first Distribution Date, the
initial Class B Invested Amount).
Interest for any Distribution Date will include accrued interest at the
Class B Certificate Rate from and including the preceding Distribution Date or,
in the case of the first Distribution Date from and including the Closing Date,
to but excluding such Distribution Date. Interest for any Distribution Date due
but not paid on any Distribution Date will be due on the next succeeding
Distribution Date together with, to the extent permitted by applicable law,
additional interest on such amount at the Class B Certificate Rate.
"Class B Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class B Certificates, minus (b) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all
prior Distribution Dates, equal to the amount by which the Class B Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates minus (d) the
B-3
<PAGE>
aggregate amount of Reallocated Class B Principal Collections for which neither
the Class D Invested Amount nor the Class C Invested Amount has been reduced for
all prior Distribution Dates, and plus (e) the aggregate amount of Available
Series Interest Collections, Transferor Interest Collections, Excess Interest
Collections and Reallocated Class C Principal Collections and Reallocated Class
D Principal Collections applied on all prior Distribution Dates for the purpose
of reimbursing amounts deducted pursuant to the foregoing clauses (c) and (d).
Subject to the Agreement, payments of principal are limited to the unpaid
Class B Invested Amount of the Class B Certificates, which may be less than the
unpaid balance of the Class B Certificates pursuant to the terms of the
Agreement. All principal of and interest on the Class B Certificates is due and
payable no later than the _______ 20, 200___ Distribution Date (or if such day
is not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series 1995-1 Termination Date neither the Trust
nor the Transferor will have any further obligation to distribute principal or
interest on the Class B Certificates. In the event that the Class B Invested
Amount is greater than zero on the Series 1995-1 Termination Date, the Trustee
will sell or cause to be sold, to the extent necessary, an amount of interests
in the Receivables or certain of the Receivables up to 110% of the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount at the close of business on such date (but not more
than the total amount of Receivables allocable to the Investor Certificates),
and shall pay the proceeds to the Class A Certificateholders pro rata in final
payment of the Class A Certificates, then to the Class B Certificateholders pro
rata in final payment of the Class B Certificates, then to the Class C
Certificateholders pro rata in final payment of the Class C Certificates and
finally to the Class D Certificateholders pro rata in final payment of the Class
D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
B-4
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed under its official seal.
GREEN TREE FLOORPLAN
FUNDING CORP.
By:
--------------------------
Name:
Title:
Dated: _______, 1995
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
TRUSTEE
By:
--------------------------
Name:
Title:
B-5
<PAGE>
Exhibit C
FORM OF CLASS C INVESTOR CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A ("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING
FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE
REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, OR TO THE TRANSFEROR. EACH CERTIFICATE OWNER BY ACCEPTING A BENEFICIAL
INTEREST IN THIS CERTIFICATE IS DEEMED TO REPRESENT THAT IT IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT UNLESS SUCH PURCHASER, AT ITS EXPENSE, DELIVERS TO
THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF COUNSEL SATISFACTORY
TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE BY SUCH
PURCHASER WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE "ASSETS
OF THE BENEFIT PLAN" OR SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND
SERVICING AGREEMENT, SUCH PURCHASER IS NOT (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 I OF ERISA,
(II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS
BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
C-1
<PAGE>
No. $__________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOATING RATE FLOORPLAN RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, Class C
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or an
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them, except to the extent set forth in the Agreement.
This certifies that ___________ (the "Certificateholder") is the registered
owner of a fractional undivided interest in the Green Tree Floorplan Receivables
Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of ___________, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) among Green Tree Floorplan Funding
Corp., as Transferor (the "Transferor"), Green Tree, as Servicer, and
_________________, as Trustee (the "Trustee"), and the Series 1995-1 Supplement,
dated as of ____________, 1995 (the "Series 1995-1 Supplement"), among the
Transferor, Green Tree as Servicer and the Trustee. The Pooling and Servicing
Agreement, as supplemented by the Series 1995-1 Supplement, is herein referred
to as the "Agreement." The corpus of the Trust consists of all of the
Transferor's right, title and interest in, to and under the Trust Property (as
defined in the Agreement).
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class C" (the "Class C Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class C Certificates, the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class A (the "Class A Certificates") and the
Green
C-2
<PAGE>
Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class B (the "Class B Certificates") with the
intention that the Class A, Class B and Class C Certificates will qualify under
applicable tax law as indebtedness, and both the Transferor and each holder of a
Class C Certificate (a "Class C Certificateholder") or any interest therein by
acceptance of its Certificate or any interest therein, agrees to treat the Class
C Certificates for purposes of federal, state and local income or franchise
taxes and any other tax imposed on or measured by income, as indebtedness.
No principal will be payable to the Class C Certificateholders until the
Class C Scheduled Payment Date, which is the Distribution Date either on or
following the Distribution Date, on which the Class A Invested Amount and the
Class B Invested Amount have been paid in full. No principal payments will be
payable to the Class C Certificateholder until the Distribution Date either on
or following the Distribution Date on which the Class B Invested Amount has been
paid in full.
Each Class C Certificate represents the right to receive interest at the
rate of ___% per annum from November __, 1995 through December 14, 1995, and at
a rate equal to ___% per annum above the arithmetic mean of LIBOR prevailing on
the related LIBOR Determination Date, but in no event in excess of __% per annum
(such rate, as in effect from time to time, the "Class C Certificate Rate"),
from December 15, 1995 through January 14, 1996 and with respect to each
Interest Accrual Period thereafter. Interest on the Class C Certificates will
accrue from the Closing Date and will be distributed on December 15, 1995, and
on the 15th day of each month thereafter, or if such day is not a business day,
on the next succeeding business day (each, a "Distribution Date"), in an amount
equal to the product of (a) the actual number of days in the related Interest
Accrual Period divided by 360, (b) the Class C Certificate Rate and (c) the
outstanding principal balance of the Class C Certificates as of the preceding
Record Date (or in the case of the first Distribution Date, the initial Class C
Invested Amount).
Interest for any Distribution Date will include accrued interest at the
Class C Certificate Rate from and including the preceding Distribution Date or,
in the case of the first Distribution Date from and including the Closing Date,
to but excluding such Distribution Date. Interest for any Distribution Date due
but not paid on any Distribution Date will be due on the next succeeding
Distribution Date together with, to the extent permitted by applicable law,
additional interest on such amount at the Class C Certificate Rate.
"Class C Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class C Certificates minus (b) the aggregate
amount of principal payments made to Class C Certificateholders prior to such
date, minus (c) the aggregate amount of Class C Investor Charge-Offs for all
prior Distribution Dates, equal to the amount by which the Class C Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates, minus (d) the aggregate amount of Reallocated Class C
Principal Collections for which the Class D
C-3
<PAGE>
Invested Amount has not been reduced for all prior Distribution Dates, and plus
(e) the aggregate amount of Available Series Interest Collections, Transferor
Interest Collections, Excess Interest Collections and Reallocated Class D
Principal Collections and certain other amounts as may be available applied on
all prior Distribution Dates for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c) and (d).
Subject to the Agreement, payments of principal are limited to the unpaid
Class C Invested Amount of the Class C Certificates, which may be less than the
unpaid balance of the Class C Certificates pursuant to the terms of the
Agreement. All principal of and interest on the Class C Certificates is due and
payable no later than the _______ 20, 200__ Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series 1995-1 Termination Date neither the Trust
nor the Transferor will have any further obligation to distribute principal or
interest on the Class C Certificates. In the event that the Class C Invested
Amount is greater than zero on the Series 1995-1 Termination Date, the Trustee
will sell or cause to be sold, to the extent necessary, an amount of interests
in the Receivables or certain of the Receivables up to 110% of the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount at the close of business on such date (but not more
than the total amount of Receivables allocable to the Investor Certificates),
and shall pay the proceeds to the Class A Certificateholders pro rata in final
payment of the Class A Certificates, then to the Class B Certificateholders pro
rata in final payment of the Class B Certificates, then to the Class C
Certificateholders pro rata in final payment of the Class C Certificates and
finally to the Class D Certificateholders pro rata in final payment of the Class
D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
C-4
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed under its official seal.
GREEN TREE FLOORPLAN
FUNDING CORP.
By:
-------------------------------
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
TRUSTEE
By:
-------------------------------
Name:
Title:
C-5
<PAGE>
Exhibit D
FORM OF CLASS D INVESTOR CERTIFICATE
THIS CERTIFICATE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OF ANY STATE AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO OR EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW.
GREEN TREE FLOORPLAN FUNDING CORP. SHALL BE PROHIBITED FROM TRANSFERRING ANY
INTEREST IN OR PORTION OF THIS CERTIFICATE UNLESS, PRIOR TO SUCH TRANSFER, IT
SHALL HAVE DELIVERED TO THE TRUSTEE AN OPINION OF COUNSEL TO THE EFFECT THAT
SUCH PROPOSED TRANSFER WILL NOT ADVERSELY AFFECT THE FEDERAL, MINNESOTA OR
DELAWARE INCOME TAX CHARACTERIZATION OF ANY OUTSTANDING SERIES OF INVESTOR
CERTIFICATES OR THE TAXABILITY (OR TAX CHARACTERIZATION) OF THE TRUST UNDER
FEDERAL, MINNESOTA OR DELAWARE INCOME TAX LAWS. IN NO EVENT SHALL THE TRANSFEROR
BE PERMITTED TO TRANSFER ANY INTEREST IN OR PORTION OF THIS CERTIFICATE IF,
AFTER GIVING EFFECT TO SUCH PROPOSED TRANSFER, TAKING INTO ACCOUNT THE
CERTIFICATES WHOSE TRANSFER IS PROPOSED, MORE THAN 20% (BY INVESTED AMOUNT AND
BY VALUE) OF THE OUTSTANDING CERTIFICATES ISSUED BY THE TRUST WITH RESPECT TO
WHICH NO OPINION OF COUNSEL WAS ISSUED THAT THE APPLICABLE CLASS WOULD BE
TREATED AS DEBT FOR FEDERAL INCOME TAX PURPOSES (INCLUDING THE EXCHANGEABLE
TRANSFEROR CERTIFICATE AND EACH TRANSFEROR RETAINED CLASS) WOULD NOT BE
BENEFICIALLY OWNED BY GREEN TREE FLOORPLAN FUNDING CORP.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT SUCH PURCHASER IS NOT (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 I OF
ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
D-1
<PAGE>
No. _____ $_________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOATING RATE FLOORPLAN RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS D
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or an
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them.
This certifies that Green Tree Floorplan Funding Corp. (the "Certificate-
holder") is the registered owner of a fractional undivided interest in the Green
Tree Floorplan Receivables Master Trust (the "Trust") issued pursuant to the
Pooling and Servicing Agreement, dated as of ________, 1995 (the "Pooling and
Servicing Agreement"; such term to include any amendment thereto) among Green
Tree Floorplan Funding Corp., as Transferor (the "Transferor"), Green Tree, as
Servicer, and _______________, as Trustee (the "Trustee"), and the Series 1995-1
Supplement, dated as of ____________, 1995 (the "Series 1995-1 Supplement"),
among the Transferor, Green Tree as Servicer and the Trustee. The Pooling and
Servicing Agreement, as supplemented by the Series 1995-1 Supplement, is herein
referred to as the "Agreement." The corpus of the Trust consists of all of the
Transferor's right, title and interest in, to and under (i) the Trust Property
(as defined in the Agreement) and (ii) the property described in Sections 3A and
__ of the Series 1995-1 Supplement.
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class D" (the "Class D Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
Green Tree Floorplan Funding Corp. shall be prohibited from Transferring
any interest in or portion of the Class D Certificate unless, prior to such
Transfer, it
D-2
<PAGE>
shall have delivered to the Trustee an Opinion of Counsel to the effect that
such proposed Transfer will not adversely affect the Federal, Minnesota or
Delaware income tax characterization of any outstanding Series of Investor
Certificate or the taxability (or tax characterization) of the Trust under
Federal, Minnesota or Delaware income tax laws. In no event shall Green Tree
Floorplan Funding Corp. be permitted to Transfer any interest in or portion of
the Class D Certificate if, after giving effect to such proposed Transfer,
taking into account the certificates whose Transfer is proposed, more than 20%
(by Invested Amount and by value) of the outstanding certificates issued by the
Trust with respect to which no Opinion of Counsel was issued that the applicable
class would be treated as debt for federal income tax purposes (including the
Exchangeable Transferor Certificate and each Transferor Retained Class) would
not be beneficially owned by the Transferor.
No principal will be payable to the Class D Certificateholders until the
Class D Payment Commencement Date, which is the Distribution Date either on or
following the Distribution Date on which the Class C Invested Amount had been
paid in full. No principal will be payable to the Class D Certificateholders
until all principal payments have first been made to the Class A
Certificateholders and then on and after the Class B Principal Payment
Commencement Date, after all principal payments have been made to the Class B
Certificateholders and then on and after the Class C Principal Payment
Commencement Date, after all payments have been made to the Class C
Certificateholders.
Interest will not accrue on the unpaid principal amount of the Class D
Certificates.
"Class D Invested Amount" means an amount equal to (a) the initial
principal balance of the Class D Certificates, minus (b) the aggregate amount of
principal payments made to Class D Certificateholders prior to such date, minus
(c) the aggregate amount of Class D Investor Charge-Offs for all prior
Distribution Dates, equal to the amount by which the Class D Invested Amount has
been reduced to fund the Investor Default Amount on all prior Distribution
Dates, minus (d) the aggregate amount of Reallocated Principal Collections for
all prior Distribution Dates, and plus (e) the aggregate amount of Interest
Collections, Transferor Interest Collections, and Excess Interest Collections
applied on all prior Distribution Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c) and (d).
D-3
<PAGE>
Subject to the Agreement, payments of principal are limited to the unpaid
Class D Invested Amount of the Class D Certificates, which may be less than the
unpaid balance of the Class D Certificates pursuant to the terms of the
Agreement.
All principal of and interest on the Class D Certificates is due and
payable no later than the _______ 20, 200__ Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series Termination Date neither the Trust nor the
Transferor will have any further obligation to distribute principal or interest
on the Class D Certificates. In the event that the Class D Invested Amount is
greater than zero on the Series Termination Date, the Trustee will sell or cause
to be sold, to the extent necessary, an amount of interests in the Receivables
or certain of the Receivables up to 110% of the Class A Invested Amount, the
Class B Invested Amount, the Class C Invested Amount and the Class D Invested
Amount at the close of business on such date (but not more than the total amount
of Receivables allocable to the Investor Certificates), and shall pay the
proceeds to the Class A Certificateholders pro rata in final payment of the
Class A Certificates, then to the Class B Certificateholders pro rata in final
payment of the Class B Certificates, then to the Class C Certificateholders pro
rata in final payment of the Class C Certificates and finally to the Class D
Certificateholders pro rata in final payment of the Class D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed under its official seal.
GREEN TREE FLOORPLAN
FUNDING CORP.
By:
------------------------------
Name:
Title:
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
TRUSTEE
By:
------------------------------
Name:
Title:
D-4
<PAGE>
EXHIBIT E
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Green Tree Floorplan
Green Tree Floorplan Funding Corp. Receivables Master Trust Monthly Report
Certificateholder's Statement Series 1995-1 November-95
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Section 5.2 Class A Class B Class C Class D Total
(i) Certificate Amount
(ii) Certificate Principal Distributed
(iii) Certificate Interest Distributed
Local Distribution per $1,000 Certificates
Certificate Principal Distributed per $1,000
Certificate Interest Distributed per $1,000
(iv) Principal Collections
(v) Interest Collections
Total Collections
(vi) Aggregate Amount of Principal Receivables
Invested Amount
Floating Allocation Percentage
(vii) Receivable Delinquencies
Current
30 Days to 99 Days
60 Days to 89 Days
90 Days and Over
Total Receivables
(viii) Aggregate Investor Default Amount
(ix) Charge-Offs
Class A
Class B
Class C
Class D
Total Charge-Offs
(x) Servicing Fee
Class A
Class B
Class C
Total Charge-Offs
(xi) Reallocated Principal Collections
Class A
Class B
Class C
(xii) Excess Funding Account Balance
(xiii) Class C Trigger Event Occurrence
Class C Reserve Amount
Average Portfolio Yield
</TABLE>
E-1
<PAGE>
EXHIBIT F
Form of 144A Exchange Notice and Certification
_________________ , 199__
Green Tree Floorplan Funding Corp.
500 Landmark Towers
345 St. Peter Street
St. Paul, MN 55102
Attention:
----------------------
Trustee
- ---------------------------------
- ---------------------------------
Attention: Corporate Trust Department
Ladies and Gentlemen:
This is to notify you as to the transfer of $ ______________ of Floating
Rate Floorplan Receivable Trust Certificates, Series 1995-1, Class C (the "Class
C Certificates") of Green Tree Floorplan Receivables Master Trust (the
"Company").
The undersigned is the holder of the Certificates and with this notice
hereby deposits with the Trustee $ _________________ principal amount of Class C
Certificates and requests that Class C Certificates in the same principal amount
be issued and executed by the Company and authenticated by the Trustee and
registered to the purchaser on _________________, 19__ , as specified in the
Pooling and Servicing Agreement, as supplemented by the Series 1995-1 Supplement
thereto, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No.:
The undersigned represents and warrants that the undersigned (i) reasonably
believes the purchaser is a "qualified institutional buyer," as defined in Rule
144A under the Securities Act of 1933 (the "Act"), (ii) such purchaser has
acquired the Class C Certificates in a transaction effected in accordance with
the exemption from the registration requirements of the Act provided by Rule
144A and, (iii) if the purchaser has purchased the Certificates for one or more
accounts for which it is acting as fiduciary or agent, (A) each such account is
a qualified institutional buyer and (B) each such account is acquiring the Class
C Certificates for its own account or
F-1
<PAGE>
for one or more institutional accounts for which it is acting as fiduciary or
agent in a minimum amount equivalent to not less than U.S. $250,000 for each
such account.
Very truly yours,
NAME OF HOLDER OF CERTIFICATE
By:
---------------------------------
Name, Chief Financial
or other Executive Officer
F-2
<PAGE>
================================================================================
GREEN TREE FLOORPLAN FUNDING CORP.
BUYER
AND
GREEN TREE FINANCIAL CORPORATION
SELLER
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF ___________, 1995
================================================================================
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
-----------------
Page
----
<C> <S> <C>
ARTICLE I
Definitions
-----------
Section 1.1. Definitions............................................... 1
Section 1.2. Other Definitional Provisions............................. 1
ARTICLE II
Conveyance of Receivables
-------------------------
Section 2.1. Conveyance of Receivables................................. 2
Section 2.2. Representations and Warranties of the Seller
Relating to the Seller and the Agreement.................. 4
Section 2.3. Representations and Warranties of the
Seller Relating to the Receivables........................ 6
Section 2.4. Addition of Accounts...................................... 7
Section 2.5. Covenants of the Seller................................... 9
Section 2.6. Removal of Eligible Accounts.............................. 11
Section 2.7. Removal of Ineligible Accounts............................ 12
Section 2.8. Sale of Ineligible Receivables............................ 13
ARTICLE III
Administration and Servicing of Receivables
-------------------------------------------
Section 3.1. Acceptance of Appointment and Other
Matters Relating to the Servicer.......................... 13
Section 3.2. Servicing Compensation.................................... 13
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.1. Allocations and Applications of
Collections and Other Funds............................... 14
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE V
Other Matters Relating to the Seller
------------------------------------
Section 5.1. Merger or Consolidation of, or Assumption of,
the Obligations of the Seller............................. 14
Section 5.2. Seller's Indemnification of the Buyer..................... 14
ARTICLE VI
Termination
-----------
Termination............................................................... 15
ARTICLE VII
Miscellaneous Provisions
------------------------
Section 7.1. Amendment................................................. 16
Section 7.2. Protection of Right, Title and Interest to Receivables.... 17
Section 7.3. Limited Recourse.......................................... 18
Section 7.4. No Petition............................................... 18
Section 7.5. GOVERNING LAW............................................. 18
Section 7.6. Notices................................................... 18
Section 7.7. Severability of Provisions................................ 18
Section 7.8. Assignment................................................ 19
Section 7.9. Further Assurances........................................ 19
Section 7.10. No Waiver; Cumulative Remedies............................ 19
Section 7.11. Counterparts.............................................. 19
Section 7.12. Third-Party Beneficiaries................................. 19
Section 7.13. Merger and Integration.................................... 19
Section 7.14. Headings.................................................. 19
Section 7.15. Continued Effectiveness of the Receivables Purchase
Agreement................................................. 20
EXHIBITS
- --------
Exhibit A Form of Assignment of Receivables
in Additional Accounts.................................... A-1
Exhibit B Form of Opinion of Counsel regarding
Amendments................................................ B-1
Exhibit C Form of Reassignment of Receivables in
Removed Accounts.......................................... C-1
Schedule 1 List of Accounts..........................................
- ----------
</TABLE>
-ii-
<PAGE>
RECEIVABLES PURCHASE AGREEMENT, dated as of ___________, 1995, by and
between GREEN TREE FLOORPLAN FUNDING CORP., a Delaware corporation, as Buyer
("Buyer"), and GREEN TREE FINANCIAL CORPORATION, a Delaware corporation ("Green
Tree" or the "Seller"), as Seller.
W I T N E S S E T H:
WHEREAS the Seller in the ordinary course of its businesses finances the
purchase of floorplan inventory and other assets of dealers in, and
manufacturers of, commercial and consumer products, thereby generating certain
payment obligations;
WHEREAS the Seller wishes to sell certain of such existing and future
payment obligations from time to time to the Buyer; and
WHEREAS the Buyer desires to sell such payment obligations to the Green
Tree Floorplan Receivables Master Trust, pursuant to a Pooling and Servicing
Agreement dated as of ___________, 1995 (as the same may from time to time be
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement"), among the Buyer, as transferor, Green Tree, as servicer, and
___________________, as trustee (the "Trustee").
WHEREAS the Buyer is an Affiliate of the Seller.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
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Section 1.1. Definitions. Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The rules of construction in Section 1.2 of the Pooling and
Servicing Agreement shall be applied to this Agreement. In addition, the term
"Agreement" means this Receivables Purchase Agreement, as the same may from time
to time be amended, supplemented or otherwise modified.
Section 1.2. Other Definitional Provisions.
(a) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule,
and Exhibit references are references to Articles, Sections, Schedules and
Exhibits in or to
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this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(b) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
Conveyance of Receivables
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Section 2.1. Conveyance of Receivables. By execution of this Agreement,
the Seller does hereby sell, transfer, assign, set over and otherwise convey,
without recourse (other than the Limited Guaranty of the Seller for the benefit
of the Class C Certificateholders and as except as expressly provided herein),
to the Buyer on the first Closing Date, in the case of Initial Accounts, and on
the applicable Addition Date, in the case of Additional Accounts, all of its
right, title and interest in, to and under the Receivables in each Account and
all Collateral Security with respect thereto owned by the Seller at the close of
business on the Cut-off Date, in the case of the Initial Accounts, and on the
applicable Additional Cut-off Date, in the case of Additional Accounts, and all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof and all of the Seller's
rights, remedies, powers and privileges with respect to such Receivables under
the related Floorplan Agreements. Subject to Article VI, as of each Business
Day prior to the earlier of (x) the occurrence of a Pay Out Event specified in
Section 9.1(a), (b), (c) or (d) or the occurrence of an Insolvency Event or
Trigger Event as specified in Section 9.2(a) of the Pooling and Servicing
Agreement and (y) the Trust Termination Date, on which Receivables are created
in the Accounts (a "Transfer Date"), the Seller does hereby sell, transfer,
assign, set over and otherwise convey, without recourse (except as expressly
provided herein), to the Buyer, all of its right, title and interest in, to and
under the Receivables in each Account (other than any Receivables created in any
Removed Account from and after the applicable Removal Date) and all Collateral
Security with respect thereto owned by the Seller at the close of business on
such Transfer Date and not theretofore conveyed to the Buyer, all monies due or
to become due and all amounts received with respect thereto and all proceeds
(including "proceeds" as defined in Section 9-306 of the UCC as in effect in the
State of Minnesota and Recoveries) thereof and all of the Seller's rights,
remedies, powers and privileges with respect to such Receivables under the
related Floorplan Agreements. The foregoing sale, transfer, assignment, set
over and conveyance and any subsequent sales, transfers, assignments, set-overs
and conveyances do not constitute, and are not intended to result in, the
creation or an assumption by the Buyer of any obligation of the Servicer, the
Seller or any other Person in connection with the
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Accounts, the Receivables or under any agreement or instrument relating thereto,
including any obligation under the Financing Agreements or the Floorplan
Agreements and any other obligation to any Dealer or Manufacturer.
On the Closing Date, pursuant to the terms of this Section 2.1, (i) the
Seller shall sell to the Buyer Receivables in the amount of $___________,
together with the related Collateral Security and Floorplan Rights (defined
below). Subject to Article VI, the purchase price for the Receivables sold by
(a) the Seller to the Buyer on the Closing Date and (b) the Seller to the Buyer
on each Addition Date and on each Transfer Date thereafter shall be a price
agreed to by the Buyer and the Seller at the time of acquisition by the Buyer,
which price shall not, in the opinion of the Buyer, be materially less favorable
to the Buyer than prices for transactions of a generally similar character at
the time of the acquisition taking into account the quality of such Receivables
and other pertinent factors, including, without limitation, prevailing interest
rates; provided that such consideration shall in any event not be less than
reasonably equivalent value therefor.
In connection with such contribution and sales, the Seller agrees to record
and file, at its own expense, a financing statement on form UCC-1 (and
continuation statements when applicable) naming the Seller as "seller" and the
Buyer as "purchaser" thereon with respect to the Receivables now existing and
hereafter created for the sale of chattel paper, accounts or general intangibles
(as defined in Section 9-105 or 9-106 of the UCC as in effect in any state where
the Seller's or the Servicer's chief executive offices or books and records
relating to the Receivables are located) meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the sale and assignment of the Receivables, the Collateral Security and all of
the Seller's rights, remedies, powers and privileges with respect to such
Receivables under the related Floorplan Agreements (the "Floorplan Rights") to
the Buyer, and to deliver a file-stamped copy of such financing statements or
other evidence of such filing to the Buyer on or prior to the first Closing
Date, in the case of Initial Accounts, and (if any additional filing is so
necessary) the applicable Addition Date, in the case of Additional Accounts. In
addition, the Seller shall cause to be timely filed in the appropriate filing
office any UCC-1 financing statement and continuation statement necessary to
perfect any sale of Receivables to the Buyer. The Buyer shall be under no
obligation whatsoever to file such financing statement, or a continuation
statement to such financing statement, or to make any other filing under the UCC
in connection with such contribution and sales. The parties hereto intend that
the transfers of Receivables effected by this Agreement be sales.
In connection with such contribution and sales, the Seller further agrees,
at its own expense, on or prior to the first Closing Date, in the case of
Initial Accounts, the applicable Addition Date, in the case of Additional
Accounts, and the applicable Removal Date, in the case of Removed Accounts, (a)
to indicate in its books and
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records, which may include computer files, that the Receivables created in
connection with the Accounts (other than Removed Accounts) have been sold, and
the Collateral Security and the Floorplan Rights assigned, to the Buyer pursuant
to this Agreement and sold to the Trust pursuant to the Pooling and Servicing
Agreement for the benefit of the Certificateholders and the other Beneficiaries
and (b) to deliver to the Buyer a computer file or microfiche or written list
containing a true and complete list of all such Accounts (other than Removed
Accounts) specifying for each such Account, as of the Cut-off Date, in the case
of Initial Accounts, and the applicable Additional Cut-off Date, in the case of
Additional Accounts, (i) its account number and (ii) the aggregate amount of
Principal Receivables in such Account. Such file or list, as supplemented from
time to time to reflect Additional Accounts and Removed Accounts, shall be
marked as Schedule 1 to this Agreement and is hereby incorporated into and made
a part of this Agreement.
In the event that such contributions, sales and assignments are deemed to
constitute a pledge of security for a loan, it is the intent of this Agreement
that the Seller shall be deemed to have granted to the Buyer a first priority
perfected security interest in all of the Seller's right, title and interest to
and under the Receivables, the Collateral Security and all proceeds thereof and
the Floorplan Agreements, and that this Agreement shall constitute a security
agreement under applicable law.
Section 2.2. Representations and Warranties of the Seller Relating to the
Seller and the Agreement. The Seller hereby represents and warrants to the
Buyer, as to itself and the Receivables being transferred and sold by it
hereunder, as of each Closing Date that:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement.
(b) Due Qualification. The Seller is duly qualified to do business and,
where necessary, is in good standing as a foreign corporation (or is exempt from
such requirement) and has obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires such qualification
except where the failure to so qualify or obtain licenses or approvals would not
have a material adverse effect on its ability to perform its obligations
hereunder.
(c) Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions provided for or contemplated by this
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Agreement have been duly authorized by the Seller by all necessary corporate
action on the part of the Seller and are within its corporate powers.
(d) No Conflict. The execution and delivery of this Agreement, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof, will not conflict with, result in
any breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which the Seller is a party or by which it or its properties are bound.
(e) No Violation. The execution and delivery of this Agreement, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof applicable to the Seller, will not
conflict with or violate any material Requirements of Law applicable to the
Seller or conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice of lapse of time
or both) a material default under any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Seller is a party or by which
the Seller is bound.
(f) No Proceedings. There are no proceedings or, to the best knowledge of
the Seller, investigations, pending or threatened against the Seller, before any
Governmental Authority (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Agreement, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Agreement, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or (v) seeking to affect adversely
the income tax attributes of the Trust under the United States federal or any
state income, single business or franchise tax systems.
(g) All Consents Required. All appraisals, authorizations, consents,
orders, approvals or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement, the performance of the transactions contemplated by this Agreement,
and the fulfillment of the terms hereof or thereof, have been obtained.
(h) Enforceability. 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
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<PAGE>
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(i) Record of Accounts. As of the first Closing Date, in the case of
Initial Accounts, as of the applicable Addition Date, in the case of the
Additional Accounts, and, as of the applicable Removal Date, in the case of
Removed Accounts, Schedule 1 to this Agreement is an accurate and complete
listing in all material respects of all the Accounts as of the Cut-off Date, the
applicable Additional Cut-off Date or the applicable Removal Date, as the case
may be, and the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and correct in all
material respects as of the Cut-off Date, such applicable Additional Cut-off
Date or such Removal Date, as the case may be.
(j) Valid Transfer. This Agreement or, in the case of Additional Accounts,
the related Assignment constitutes a valid sale, transfer and assignment to the
Buyer of all right, title and interest of the Seller in the Receivables and the
Collateral Security and the proceeds thereof. Upon the filing of the financing
statements described in Section 2.1 with the Secretary of State of the State of
Minnesota and the County Recorder of Ramsey County in the State of Minnesota,
and, in the case of the Receivables hereafter created and the proceeds thereof,
upon the creation thereof, the Buyer shall have a first priority perfected
ownership interest in such property. Except as otherwise provided in the
Pooling and Servicing Agreement, neither the Seller nor any Person claiming
through or under the Seller has any claim to or interest in the Trust Assets.
The representations and warranties set forth in this Section 2.2 shall
survive the transfer and assignment of the Receivables to the Buyer. Upon
discovery by the Seller or the Buyer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other party.
Section 2.3. Representations and Warranties of the Seller Relating to the
Receivables.
(a) Representations and Warranties. The Seller hereby represents and
warrants to the Buyer, with respect to the Receivables conveyed by the Seller,
that:
(i) Each Receivable and all Collateral Security existing on the first
Closing Date or, in the case of Additional Accounts, on the applicable
Addition Date, and on each Transfer Date, has been conveyed to the Buyer
free and clear of any Lien [other than any Permitted Lien].
(ii) With respect to each Receivable and all Collateral Security
existing on the first Closing Date or, in the case of Additional Accounts,
on
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the applicable Addition Date, and on each Transfer Date, all consents,
licenses, approvals or authorizations of or registrations or declarations
with any Governmental Authority required to be obtained, effected or given
by the Seller in connection with the conveyance of such Receivable or
Collateral Security to the Buyer have been duly obtained, effected or given
and are in full force and effect.
(iii) On the Cut-off Date and each Closing Date, each Initial Account
is an Eligible Account and, in the case of Additional Accounts, on the
applicable Additional Cut-off Date and each subsequent Closing Date, each
such Additional Account is an Eligible Account.
(iv) On the first Closing Date, in the case of the Initial Accounts,
and, in the case of the Additional Accounts, on the applicable Additional
Cut-off Date, and on each Transfer Date, each Receivable conveyed to the
Buyer on such date is an Eligible Receivable or, if such Receivable is not
an Eligible Receivable, such Receivable is conveyed to the Buyer in
accordance with Section 2.8.
(b) Notice of Breach. The representations and warranties set forth in this
Section 2.3 shall survive the transfer and assignment of the Receivables to the
Buyer. Upon discovery by the Seller or the Buyer of a breach of any of the
representations and warranties set forth in this Section 2.3, the party
discovering such breach shall give prompt written notice to the other party.
The Seller agrees to cooperate with the Buyer in attempting to cure any breach.
Section 2.4. Addition of Accounts.
(a) The Seller may from time to time offer to designate additional Eligible
Accounts to be included as Accounts, subject to the conditions specified in
paragraph (b) below. If any such offer is accepted by the Buyer, Receivables
and Collateral Security, if any, from such Additional Accounts shall be sold to
the Buyer effective on a date (the "Addition Date") specified in a written
notice provided by the Seller (or the Servicer on its behalf) to the Buyer and
any Enhancement Providers specifying the Additional Cut-off Date and the
Addition Date for such Additional Accounts (the "Addition Notice") on or before
the fifth Business Day but not more than the 30th day prior to the related
Addition Date or, if the Automatic Addition Condition is satisfied, on the
Determination Date following the Collection Period in which such Addition Dates
occur (the "Notice Date"). An Addition Notice may relate to one or more
Accounts on one or more Addition Dates.
(b) The Seller shall be permitted to convey to the Buyer the Receivables
and all Collateral Security, if any, related thereto in any Additional Accounts
designated by the Seller as such pursuant to Section 2.4(a) only upon
satisfaction of
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each of the following conditions on or prior to the related Addition Date
(except for the condition in clause (vii), if applicable, which shall be
satisfied on or before the tenth Business Day after such Notice Date):
(i) The Seller shall provide the Buyer and any Enhancement Providers
with a timely Addition Notice.
(ii) Such Additional Accounts shall all be Eligible Accounts.
(iii) The Seller shall have delivered to the Buyer a duly executed
written assignment (including an acceptance by the Buyer) covering the
Receivables specified in the Addition Notice in substantially the form of
Exhibit A (the "Assignment") and the computer file or microfiche or written
list required to be delivered pursuant to Section 2.1.
(iv) The Seller shall have delivered to the Buyer for deposit in the
Collection Account all Collections with respect to such Additional Accounts
since the Additional Cut-off Date.
(v) (A) No selection procedures believed by the Seller to be adverse
to the interests of the Buyer or the Beneficiaries were used in selecting
such Additional Accounts; (B) the list of Additional Accounts delivered
pursuant to clause (iii) above is true and correct in all material respects
as of the Additional Cut-off Date and (C) as of each of the Notice Date and
the Addition Date, neither the Seller, the Buyer nor the Servicer are
insolvent nor will have been made insolvent by such transfer nor are aware
of any pending insolvency.
(vi) If the Automatic Addition Condition is not satisfied with respect
to such addition, the Rating Agency Condition shall have been satisfied
with respect to such addition.
(vii) If [(A)] one or more of the Additional Accounts specified in
such Addition Notice will contain Receivables secured by a security
interest in a type of Product that has not been previously financed in the
Floorplan Business [or if, as a result of the conveyance of such Additional
Accounts, the proportion of the Receivables secured by any type of Product
in excess of the limits specified in the Pooling and Servicing Agreement,]
[or (B) one or more of the Additional Accounts is supported by a Floorplan
Agreement with a Manufacturer that, as of the related Addition Date, is not
an Existing Manufacturer,] then, whether or not the Automatic Condition is
satisfied, the Rating Agency Condition shall have been satisfied in respect
of the addition of each Additional Account specified in clauses (A) and (B)
on or prior to the related Addition Date.
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(viii) The addition of the Receivables arising in such Additional
Accounts shall not result in the occurrence of an Pay Out Event.
(ix) The Seller shall have delivered to the Buyer and any Enhancement
Providers a certificate of a Vice President or more senior officer
confirming the items set forth in paragraphs (ii) through (vi) and (viii)
above.
(x) On or before each Notice Date, the Seller shall have delivered to
the Trustee and any Enhancement Providers (A) an Opinion of Counsel with
respect to the Receivables in the Additional Accounts added since the last
delivery of such opinion substantially in the form of Exhibit E-2 to the
Pooling and Servicing Agreement and (B) except in the case of an addition
in connection with an addition of Receivables by the Buyer to the Trust
required by Section 2.6(a) of the Pooling and Servicing Agreement, a Tax
Opinion with respect to such addition; provided that if such Opinion of
Counsel and Tax Opinion are required to be delivered, they shall be
rendered by outside counsel no less frequently than quarterly.
(c) The Seller hereby represents and warrants as of the applicable Addition
Date as to the matters set forth in Section 2.4(b)(v). The representations and
warranties set forth in Section 2.4(b)(v) shall survive the sale and assignment
of the respective Receivables and Collateral Security, if any, to the Buyer.
Upon discovery by the Seller or the Buyer of a breach of any of the foregoing
representations and warranties, the party discovering the breach shall give
prompt written notice to the other parties and to any Enhancement Providers.
(d) Notwithstanding anything in this Section 2.4 to the contrary, the
additions of Additional Accounts pursuant to Section 2.5 on or prior to the
Closing Date for Series 1995-1 need not satisfy clause (i), (vi), (vii) or (x).
Section 2.5. Covenants of the Seller. The Seller hereby covenants that:
(a) No Liens. Except for the conveyances hereunder, the Seller will not
sell, pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on, any Receivable or any Collateral
Security, whether now existing or hereafter created, or any interest therein,
and the Seller shall defend the right, title and interest of the Buyer and the
Trust in, to and under the Receivables and the Collateral Security, whether now
existing or hereafter created, against all claims of third parties claiming
through or under the Seller.
(b) Financing Agreements and Guidelines. The Seller shall comply with and
perform its servicing obligations with respect to the Accounts and Receivables
in accordance with (i) the Wholesale Financing Agreements and the Asset Based
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Financing Agreements relating to the Accounts and (ii) the Financing Guidelines,
except insofar as any failure to so comply or perform would not materially and
adversely affect the rights of the Buyer, the Trust or any of the Beneficiaries.
Subject to compliance with all Requirements of Law, the Seller may change the
terms and provisions of (i) the Wholesale Financing Agreements and the Asset
Based Financing Agreements or (ii) the Financing Guidelines in any respect
(including the calculation of the amount or the timing of charge-offs and the
rate of the finance charge assessed thereon) only if such change would be
permitted pursuant to Section 3.1(d) of the Pooling and Servicing Agreement.
(c) Account Allocations. In the event that the Seller is unable for any
reason to transfer Receivables to the Buyer, then the Seller agrees that it
shall allocate, after the occurrence of such event, payments on each Account
with respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with the terms of the Pooling and Servicing Agreement.
The parties hereto agree that Interest Receivables, whenever created, accrued in
respect of Principal Receivables which have been conveyed to the Buyer and by
the Buyer to the Trust shall continue to be a part of the Trust notwithstanding
any cessation of the transfer of additional Principal Receivables to the Buyer
and Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV of the Pooling and Servicing Agreement.
(d) Delivery of Collections. In the event that the Seller receives
Collections, the Seller agrees to pay the Servicer or any Successor Servicer all
payments received by the Seller in respect of the Receivables as soon as
practicable after receipt thereof by the Seller, but in no event later than two
Business Days after the receipt by the Seller thereof.
(e) Notice of Liens. The Seller shall notify the Buyer and the Trustee
promptly after becoming aware of any Lien on any Receivable conveyed by the
Seller other than the conveyances hereunder or under the Pooling and Servicing
Agreement.
(f) Compliance with Law. The Seller hereby agrees to comply in all
material respects with all Requirements of Law applicable to the Seller.
(g) Performance of Floorplan Agreements. The Seller shall perform its
obligations under each Floorplan Agreement in accordance with the terms thereof
in all material respects.
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Section 2.6. Removal of Eligible Accounts.
(a) On each Determination Date on which Accounts, including all amounts
then held by the Trust or thereafter received by the Trust with respect to such
Accounts, are removed from the Trust pursuant to Section 2.7 of the Pooling and
Servicing Agreement, the Buyer shall be deemed to have offered to the Seller
automatically and without notice to or action by or on behalf of the Buyer, the
right to remove Eligible Accounts from the operation of this Agreement in the
manner prescribed in Section 2.6(b). The termination of an Account by a Dealer
upon such Dealer's payment in full of such Account shall not be a removal of an
Account under this Section.
(b) To accept such offer and remove Accounts, including all amounts then
held by the Trust or thereafter received by the Trust with respect to such
Accounts, the Seller (or the Servicer on its behalf) shall take the following
actions and make the following determinations:
(i) not less than five Business Days prior to the Removal Date,
furnish to the Buyer, the Trustee, any Enhancement Providers and the Rating
Agencies a written notice (the "Removal Notice") specifying the
Determination Date (which may be the Determination Date on which such
notice is given) on which removal of the Receivables of one or more
Accounts (the "Removed Accounts") will occur (a "Removal Date");
(ii) from and after such Removal Date, cease to transfer to the Buyer
any and all Receivables arising in such Removed Accounts;
(iii) represent and warrant that the removal of any such Eligible
Account on any Removal Date shall not, in the reasonable belief of the
Seller, cause a Pay Out Event to occur or cause the Transferor Interest to
be less than the Minimum Transferor amount on such date;
(iv) represent and warrant that no selection procedures believed by
the Seller to be adverse to the interests of the Beneficiaries were
utilized in selecting the Accounts to be removed; and
(v) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the Removed Accounts that were removed on the Removal Date, specifying for
each Removed Account as of the date of the Removal Notice its number, the
aggregate amount outstanding in such Removed Account and the aggregate
amount of Principal Receivables therein and represent that such computer
file, microfiche list or other list of the Removed Accounts is true and
complete in all material respects.
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(c) Subject to Section 2.6(b), on the Removal Date with respect to any such
Removed Account, such Removed Account shall be deemed removed by operation of
this Agreement for all purposes. After the Removal Date and upon the written
request of the Servicer, the Buyer shall deliver to the Seller a reassignment in
substantially the form of Exhibit C (the "Reassignment").
Section 2.7. Removal of Ineligible Accounts.
(a) On any date on which an Account becomes an Ineligible Account (which
shall be deemed the Removal Commencement Date with respect to such Account), the
Seller shall commence removal of the Receivables of such Ineligible Account in
the manner prescribed in Section 2.7(b).
(b) With respect to each Account that becomes an Ineligible Account, the
Seller (or the Servicer on its behalf) shall take the following actions and make
the following determinations:
(i) furnish to the Buyer, the Trustee and any Enhancement Providers a
Removal Notice specifying a Removal Commencement Date and the Ineligible
Accounts to be treated as Designated Accounts;
(ii) determine on the Removal Commencement Date with respect to such
Designated Accounts the Designated Balance with respect to each such
Designated Account and amend Schedule 1 by delivering to the Buyer a
computer file or microfiche or written list containing a true and complete
list of the Removed Accounts specifying for each such Account, as of the
Removal Commencement Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the Designated Balance;
(iii) from and after such Removal Commencement Date, cease to
transfer to the Buyer any and all Receivables arising in such Designated
Accounts;
(iv) from and after such Removal Commencement Date, allocate
Collections of Principal Receivables in respect of each Designated Account,
first to the oldest outstanding principal balance of such Designated
account, until the Removal Date with respect thereto; and
(v) on each Business Day from and after such Removal Commencement Date
to and until the related Removal Date, allocate (A) to the Buyer Defaulted
Receivables and Collections of Interest Receivables in respect of each
Designated Account, based on the ratio of the aggregate amount of Principal
Receivables in all Designated Accounts sold to the Buyer
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on such Business Day to the total aggregate amount of Principal Receivables
in all such Designated Accounts on such Business Day and (B) to the Seller,
the remainder of the Defaulted Receivables and Collections of Interest
Receivables in all such Designated Accounts on such Business Day.
(c) On the Removal Date with respect to any such Designated Account, the
Seller shall cease to allocate any Collections therefor in accordance herewith
and such Designated Account shall be deemed a Removed Account. After the
Removal Date and upon the written request of the Servicer, the Buyer shall
deliver to the Seller a Reassignment.
Section 2.8. Sale of Ineligible Receivables. The Seller shall sell to the
Buyer on each Transfer Date any and all Receivables arising in any Eligible
Accounts that are Ineligible Receivables, provided that on the Cut-off Date or,
in the case of Receivables arising in Additional Accounts, on the related
Additional Cut-off Date, and on the applicable Transfer Date, the Account in
which such Receivables arise is an Eligible Account.
ARTICLE III
Administration and Servicing of Receivables
-------------------------------------------
Section 3.1. Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) Green Tree agrees to act as the Servicer under this Agreement and the
Pooling and Servicing Agreement, and the Buyer consents to Green Tree acting as
Servicer. Green Tree, as Servicer, may delegate some or all of its servicing
duties to a wholly owned subsidiary of Green Tree, for so long as such
subsidiary remains, directly or indirectly, a wholly owned subsidiary of Green
Tree. Green Tree will have ultimate responsibility for servicing, managing and
making collections on the Receivables and will have the authority to make any
management decisions relating to such Receivables, to the extent such authority
is granted to the Servicer under this Agreement and the Pooling and Servicing
Agreement.
(b) Green Tree shall service and administer the Receivables in accordance
with the provisions of the Pooling and Servicing Agreement.
Section 3.2. Servicing Compensation. As full compensation for its
servicing activities hereunder and under the Pooling and Servicing Agreement,
Green Tree shall be entitled to receive the Servicing Fee on each Distribution
Date so long as it is the Servicer under the Pooling and Servicing Agreement.
The Servicing Fee shall be paid in accordance with the terms of the Pooling and
Servicing Agreement.
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ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.1. Allocations and Applications of Collections and Other Funds.
The Servicer will apply all Collections with respect to the Receivables and all
funds on deposit in the Collection Account as described in Article IV of the
Pooling and Servicing Agreement.
ARTICLE V
Other Matters Relating to the Seller
------------------------------------
Section 5.1. Merger or Consolidation of, or Assumption of, the Obligations
of the Seller. The Seller shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the Seller
is merged or the Person which acquires by conveyance or transfer the properties
and assets of the Seller substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America or any
State or the District of Columbia and, if the Seller is not the surviving
entity, such corporation shall assume, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, the
performance of every covenant and obligation of the Seller hereunder; and
(b) the Seller has delivered to the Buyer and the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer comply with this Section 5.1 and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
Section 5.2. Seller's Indemnification of the Buyer. The Seller shall
indemnify and hold harmless the Buyer, from and against any loss, liability,
expense, claim, damage or injury suffered or sustained by reason of any acts,
omissions or alleged acts or omissions arising out of activities of the Seller
pursuant to this Agreement arising out of or based on the arrangement created by
this Agreement and the activities of the Seller taken pursuant thereto,
including any judgment, award, settlement, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided, however, that the Seller shall
not indemnify the Buyer if such acts, omissions or alleged acts or omissions
constitute fraud, gross negligence or wilful misconduct by the Buyer; and
provided further, that the Seller shall not indemnify
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<PAGE>
the Buyer for any liabilities, cost or expense of the Buyer with respect to any
federal, state or local income or franchise taxes (or any interest or penalties
with respect thereto) required to be paid by the Buyer in connection herewith to
any taxing authority. Any indemnification under this Article V shall survive the
termination of the Agreement.
ARTICLE VI
Termination
-----------
This Agreement will terminate immediately after the Trust terminates
pursuant to the Pooling and Servicing Agreement. In addition, the Buyer shall
not purchase Receivables from the Seller nor shall the Seller designate
Additional Accounts if the Seller shall become an involuntary party to (or be
made the subject of) any proceeding provided for by any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Seller or relating to all or substantially all of its property
(an "Involuntary Case") and such Involuntary Case shall have continued for a
period of ten Business Days from and including the day of receipt by the Seller
at its principal corporate office of notice of such Involuntary Case; provided,
that during such ten Business Day period, the Buyer shall suspend its purchase
of Receivables and shall hold all Collections of Principal Receivables that
would have been available to purchase Receivables in the Collection Account and
(a) if by the first Business Day after such ten Business Day period, the Buyer
has not obtained an order from the court having jurisdiction of such case or
filing which order approves the continuation of the sale of Receivables by the
Seller to the Buyer and which provided that the Buyer and any of its transferees
(including the Trustee) may rely on such order for the validity and nonavoidance
of such transfer (the "Order"), the Buyer shall hold such Collections in the
Collection Account until such time as they may be paid as elsewhere provided
herein and shall not purchase Receivables thereafter or designate Additional
Accounts for transfer to the Buyer, or (b) if by such first Business Day, the
Buyer has obtained such Order, the Seller may continue selling Receivables, and
the Buyer may continue purchasing Receivables, pursuant to the terms hereof, as
modified by the immediately succeeding sentence. During the period after the
ten Business Day period described above and before the end of the 60-day period
described below, the purchase price of the Receivables transferred during such
period, notwithstanding anything in this Agreement to the contrary, shall be
paid to the Seller by the Buyer in cash not later than the same Business Day of
any sale of Receivables. During such period, Receivables will be considered
transferred to the Buyer only to the extent that the purchase price therefor has
been paid in cash on the same Business Day. If an Order is obtained but
subsequently is reversed or rescinded or expires, the Seller shall immediately
cease selling Receivables to the Buyer and the Buyer shall immediately cease
buying Receivables. The Seller shall give prompt written notice to each of the
Buyer and the Trustee immediately upon
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<PAGE>
becoming a party to an Involuntary Case. If by the first Business Day after the
60-day period after such involuntary filing, such Involuntary Case has not been
dismissed, the Buyer shall not purchase thereafter Receivables or designated
Additional Accounts for transfer to the Trust.
ARTICLE VII
Miscellaneous Provisions
------------------------
Section 7.1. Amendment.
(a) This Agreement may be amended from time to time by the Seller and the
Buyer; provided, however, that such action shall not, as evidenced by an Opinion
of Counsel for the Seller addressed and delivered to the Trustee, adversely
affect in any material respect the interests of any Investor Certificateholder.
(b) This Agreement may also be amended from time to time by the Buyer and
the Seller with the consent of the Holders of Investor Certificates evidencing
more than 50% of the aggregate unpaid principal amount of the Investor
Certificates of all materially adversely affected Series, 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
Seller; provided, however, that no such amendment shall (i) reduce in any manner
the amount of or delay the timing of any distributions to be made to Investor
Certificateholders or deposits of amounts to be so distributed with the amount
available under any Enhancement without the consent of each affected Investor
Certificateholder, (ii) change the definition of or the manner of calculating
the interest of any Investor Certificates without the consent of each affected
Certificateholder, (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Certificateholder or (iv)
adversely affect the rating of any Series or Class by any Rating Agency without
the consent of the Holders of all of the Investor Certificates of such Series or
Class. Any amendment to be effected pursuant to this paragraph shall be deemed
to materially adversely affect all outstanding Series, other than any Series
with respect to which such action shall not, as evidenced by an Opinion of
Counsel for the Seller, addressed and delivered to the Trustee, adversely affect
in any material respect the interests of any Investor Certificateholder of such
Series. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's rights, duties or immunities under this
Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to paragraph (a), the Seller shall furnish
notification of the substance of such amendment to each Investor
Certificateholder, each Enhancement Provider, each Agent and each Rating Agency.
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<PAGE>
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section 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 Investor Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(e) Notwithstanding anything in this Section to the contrary, no amendment
may be made to this Agreement which would adversely affect in any material
respect the interests of any Enhancement Provider without the consent of such
Enhancement Provider.
Section 7.2. Protection of Right, Title and Interest to Receivables.
(a) The Seller shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering the Buyer's right, title and interest to the Receivables and
Collateral Security relating thereto to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Buyer hereunder. The Seller shall
deliver to the Buyer file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Buyer shall cooperate
fully with the Seller in connection with the obligations set forth above and
will execute any and all documents reasonably required to fulfill the intent of
this Section 7.2(a).
(b) Within 30 days after the Seller makes any change in its name, identity
or corporate structure which would make any financing statement or continuation
statement filed in accordance with Section 7.2(a) seriously misleading within
the meaning of Section 9-402(7) of the UCC as in effect in the State of
Minnesota, or such other applicable jurisdiction, the Seller shall give the
Buyer and any Agent notice of any such change and shall file such financing
statements or amendments as may be necessary to continue the perfection of the
Buyer's security interest in the Receivables and the proceeds thereof.
(c) The Seller will give the Buyer prompt written notice of any relocation
of any office at which it keeps Records concerning the Receivables or 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 and shall file such financing statements or amendments as may be
necessary to perfect or to continue the perfection of the Buyer's security
interest in the Receivables and the proceeds
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<PAGE>
thereof. The Seller will at all times maintain its principal executive offices
within the United States of America.
(d) The Seller will deliver to the Buyer upon the execution and delivery of
each amendment of this Agreement, an Opinion of Counsel to the effect specified
in Exhibit B.
Section 7.3. Limited Recourse. Notwithstanding anything to the contrary
contained herein, the obligations of the Buyer hereunder shall not be recourse
to the Buyer (or any person or organization acting on behalf of the Buyer or any
affiliate, officer or director of the Buyer), other than to the portion of the
Transferor Interest on any date of determination which is in excess of the
Minimum Transferor Interest; provided, however, that any payment by the Buyer
made in accordance with this Section 7.3 shall be made only after payment in
full of any amounts that the Buyer is obligated to deposit in the Collection
Account pursuant to this Agreement; provided further that the Investor
Certificateholders shall be entitled to the benefits of the subordination of the
Collections allocable to the Transferor Interest to the extent provided in any
Supplements to the Pooling and Servicing Agreement.
Section 7.4. No Petition. The Seller hereby covenants and agrees that it
will not at any time institute against the Buyer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law.
SECTION 7.5. 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.
Section 7.6. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to the
parties at such addresses specified in the Pooling and Servicing Agreement.
Section 7.7. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be 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 rights of the Certificateholders.
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<PAGE>
Section 7.8. Assignment. Notwithstanding anything to the contrary
contained herein, this Agreement may not be assigned by the Seller without the
prior consent of the Buyer and the Trustee. The Buyer may assign its rights,
remedies, powers and privileges under this Agreement to the Trust pursuant to
the Pooling and Servicing Agreement.
Section 7.9. Further Assurances. The Seller agrees to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Buyer more fully to effect
the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
Section 7.10. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Buyer, any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 7.11. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
Section 7.12. Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders, the
Trustee and the other Beneficiaries and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder.
Section 7.13. 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 7.14. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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<PAGE>
Section 7.15. Continued Effectiveness of the Receivables Purchase
Agreement. As amended and restated hereby, the Receivables Purchase Agreement
shall continue to be in full force and effect and in hereby ratified and
confirmed in all respects.
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<PAGE>
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Receivables
Purchase Agreement to be duly executed by their respective officers as of the
day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Buyer
By: _________________________
Name: _____________________
Title:_____________________
GREEN TREE FINANCIAL
CORPORATION, Seller
By: ________________________
Name: ____________________
Title:____________________
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EXHIBIT A
TO RPA
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(AS REQUIRED BY SECTION 2.4
OF THE RECEIVABLES PURCHASE AGREEMENT)
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
__________, ____, between Green Tree Floorplan Funding Corp., as buyer (the
"Buyer"), and Green Tree Financial Corporation, as seller (the "Seller"),
pursuant to the Receivables Purchase Agreement referred to below.
W I T N E S S E T H:
-------------------
WHEREAS the Seller and the Buyer are parties to a Receivables Purchase
Agreement dated as of _____________, 1995 (as amended or supplemented, the
"Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to designate Additional Accounts to be included as Accounts and to convey the
Receivables and related Collateral Security of such Additional Accounts, whether
now existing or hereafter created, to the Buyer as part of the corpus of the
Trust (as each such term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, 19__.
2. Designation of Additional Accounts. The Seller hereby delivers
herewith a computer file or microfiche or written list containing a true and
complete list of all such Additional Accounts specifying for each such Account,
as of the Additional Cut-off Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the aggregate amount of Principal
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<PAGE>
Receivables in such Account. Such file or list shall, as of the date of this
Assignment, supplement Schedule 1 to the Receivables Purchase Agreement.
3. Conveyance of Receivables.
(a) The Seller does hereby sell, transfer, assign, set over and otherwise
convey, without recourse (other than the Limited Guaranty of the Seller for the
benefit of the Class C Certificateholders and except as expressly provided in
the Receivables Purchase Agreement), to the Buyer, on the Addition Date all of
its right, title and interest in, to and under the Receivables in such
Additional Accounts, all Collateral Security and the related Floorplan Rights
with respect thereto, owned by the Seller and existing at the close of business
on the Additional Cut-off Date and thereafter created from time to time, all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof. The foregoing sale,
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in the creation or an assumption by the Buyer of any
obligation of the Servicer, the Seller or any other Person in connection with
the Accounts, the Receivables or under any agreement or instrument relating
thereto, including any obligation under any Financing Agreement or Floorplan
Agreement, including any other obligation to any Dealer or Manufacturer.
(b) In connection with such sale, the Seller agrees to record and file, at
its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) with respect to the Receivables now existing and
hereafter created for the sale of chattel paper, accounts and general
intangibles (as defined in Section 9-105 or 9-106 of the UCC as in effect in any
state where the Seller's or the Servicer's chief executive offices or books and
records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the Collateral
Security to the Buyer, and to deliver a file-stamped copy of such financing
statements or other evidence of such filing to the Buyer on or prior to the
Addition Date to the extent, if any, that the UCC-1 financing statements filed
pursuant to Section 2.1 of the Receivables Purchase Agreement are not sufficient
for such purpose. In addition, the Seller shall cause to be timely filed in the
appropriate filing office any UCC-1 financing statement and continuation
statement necessary to perfect any sale of Receivables to the Seller. The Buyer
shall be under no obligation whatsoever to file such financing statement, or a
continuation statement to such financing statement, or to make any other filing
under the UCC in connection with such sale. The parties hereto intend that the
sales of Receivables effected by this Agreement be sales.
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(c) In connection with such sale, the Seller further agrees, at its own
expense, on or prior to the Addition Date, to indicate in its books and records,
which may include its computer files, that the Receivables created in connection
with the Additional Accounts designated hereby have been sold and the Collateral
Security assigned to the Buyer pursuant to this Assignment and sold to the Trust
pursuant to the Pooling and Servicing Agreement for the benefit of the
Certificateholders and the other Beneficiaries.
4. Acceptance by Buyer. Subject to the satisfaction of the conditions
set forth in Section 6 of this Assignment, the Buyer hereby acknowledges its
acceptance of all right, title and interest to the property, now existing and
hereafter created, conveyed to the Buyer pursuant to Section 3(a) of this
Assignment. The Buyer further acknowledges that, prior to or simultaneously
with the execution and delivery of this Assignment, the Seller delivered to the
Buyer the computer file or microfiche or written list relating to the Additional
Accounts described in Section 2 of this Assignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer, on behalf of the Trust, as of the date of
this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment 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 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 in equity);
(b) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the law of the State
of Delaware and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Assignment;
(c) Due Qualification. The Seller is duly qualified to do business and,
where necessary, is in good standing as a foreign corporation (or is exempt from
such requirement) and has obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires such qualification
except where the failure to so qualify or obtain licenses or approvals would not
have a material adverse effect on its ability to perform its obligations
hereunder;
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<PAGE>
(d) Eligible Accounts. Each Additional Account designated hereby is an
Eligible Account;
(e) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Additional Accounts designated hereby;
(f) Insolvency. As of the Notice Date and the Addition Date, the Seller is
not insolvent nor, after giving effect to the conveyance set forth in Section 3
of this Assignment, will it have been made insolvent, nor is it aware of any
pending insolvency;
(g) Valid Transfer. This Assignment constitutes a valid sale, transfer and
assignment to the Buyer of all right, title and interest of the Seller in the
Receivables and the Collateral Security and the proceeds thereof and upon the
filing of the financing statements described in Section 3 of this Assignment
with the Secretary of State of the State of Minnesota and other applicable
states and counties and, in the case of the Receivables and the Collateral
Security hereafter created and the proceeds thereof, upon the creation thereof,
the Buyer shall have a first priority perfected ownership interest in such
property, except for Liens permitted under Section 2.6(a) of the Receivables
Purchase Agreement;
(h) Due Authorization. The execution and delivery of this Assignment and
the consummation of the transactions provided for or contemplated by this
Assignment have been duly authorized by the Seller by all necessary corporation
action on the part of the Seller;
(i) No Conflict. The execution and delivery of this Assignment, the
performance of the transactions contemplated by this Assignment and the
fulfillment of the terms hereof, will not conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or its properties are bound;
(j) No Violation. The execution and delivery of this Assignment by the
Seller, the performance of the transactions contemplated by this Assignment and
the fulfillment of the terms hereof will not conflict with or violate any
material Requirements of Law applicable to the Seller;
(k) No Proceedings. There are no proceedings or, to the best knowledge of
the Seller, investigations pending or threatened against the Seller before any
Governmental Authority (i) asserting the invalidity of this Assignment, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this
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<PAGE>
Assignment, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Seller, would materially and adversely affect the performance by
the Seller of its obligations under this Assignment, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Assignment or (v) seeking to affect adversely the
income tax attributes of the Trust under the United States federal or any State
income, single business or franchise tax systems;
(l) Record of Accounts. As of the Addition Date, Schedule 1 to this
Assignment is an accurate and complete listing in all material respects of all
the Additional Accounts as of the Additional Cut-off Date and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all material respects as
of the Additional Cut-off Date;
(m) No Liens. Each Receivable and all Collateral Security existing on the
Addition Date has been conveyed to the Buyer free and clear of any Lien;
(n) All Consents Required. With respect to each Receivable and all
Collateral Security existing on the Addition Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the conveyance of such Receivable or Collateral Security to
the Buyer, the execution and delivery of this Assignment and the performance of
the transactions contemplated hereby have been duly obtained, effected or given
and are in full force and effect; and
(o) Eligible Receivables. On the Additional Cut-off Date each Receivable
conveyed to the Buyer as of such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to the
Buyer in accordance with Section 2.8 of the Receivables Purchase Agreement.
6. Conditions Precedent. The acceptance of the Trustee set forth in
Section 4 of this Assignment is subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 5 of this Assignment shall be true and
correct as of the date of this Assignment and as of the Addition Date;
(b) Agreement. Each of the conditions set forth in Section 2.4(b) of the
Receivables Purchase Agreement applicable to the designation of the Additional
Accounts to be designated hereby shall have been satisfied; and
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(c) Addition Information. The Seller shall have delivered to the Buyer
such information as was reasonably requested by the Buyer to satisfy itself as
to the accuracy of the representation and warranty set forth in Section 5(d) of
this Assignment.
7. Ratification of Agreement. As supplemented by this Assignment, the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Assignment shall be
read, taken and construed as one and the same instrument.
8. Counterparts. This Assignment 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.
9. GOVERNING LAW. THIS ASSIGNMENT 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.
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<PAGE>
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Assignment to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Buyer
By:_________________________
Name:
Title:
GREEN TREE FINANCIAL
CORPORATION, Seller
By:________________________
Name:
Title:
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<PAGE>
EXHIBIT B
TO RPA
FORM OF OPINION OF COUNSEL
(AS REQUIRED BY SECTION 7.2(D) OF
---------------------------------
THE RECEIVABLES PURCHASE AGREEMENT)
-----------------------------------
(a) The Amendment to the Receivables Purchase Agreement, attached hereto as
Schedule 1 (the "Amendment"), has been duly authorized, executed and delivered
by the Seller and constitutes the legal, valid and binding agreement of the
Seller, enforceable in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally from time to time in
effect. The enforceability of the Seller's obligations is also subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) The Amendment has been entered into in accordance with the terms and
provisions of Section 7.1 of the Receivables Purchase Agreement.
(c) The Amendment will not adversely affect in any material respect the
interests of the Investor Certificateholders. [Include this clause (iii) only
in the case of amendments effected pursuant to Section 7.1(a) of the Receivables
Purchase Agreement.]
B-1
<PAGE>
EXHIBIT C
TO RPA
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(AS REQUIRED BY SECTION 2.6 OF THE RECEIVABLES
PURCHASE AGREEMENT REFERRED TO BELOW)
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as of __________, ____, by
and between GREEN TREE FLOORPLAN FUNDING CORP., as buyer (the
"Buyer"), and GREEN TREE FINANCIAL CORPORATION, as seller (the
"Seller"), pursuant to the Receivables Purchase Agreement referred to
below.
WITNESSETH
WHEREAS the Seller and the Buyer are parties to the Receivables Purchase
Agreement dated as of _______________, 1995 (as amended or supplemented, the
"Receivable Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to remove all Receivables from certain Accounts, the Collateral Security thereof
and the related Floorplan Rights (the "Removed Accounts") and to cause the Buyer
to reconvey the Receivables of such Removed Accounts and such Collateral
Security and Floorplan Rights, whether now existing or hereafter created, and
all amounts currently held by the Buyer or thereafter received by the Trust in
respect of such Removed Accounts, from the Buyer to the Seller (as each such
term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such removal and to reconvey the
Receivables in the Removed Accounts, such Collateral Security and any related
amounts held or received by the Trust subject to the terms and conditions
hereof.
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"Removal Date" shall mean, with respect to the Removed Accounts designated
hereby, __________________.
C-1
<PAGE>
2. Notice of Removed Accounts. The Seller shall deliver to the Buyer,
the Trustee, any Enhancement Providers and the Rating Agencies a computer file
or microfiche or written list containing a true and complete list of the Removed
Accounts specifying for each such Account, as of the Removal Commencement Date,
its account number, the aggregate amount of Receivables outstanding in such
Accounts and the Designated Balance. Such list shall be marked as Schedule 1 to
this Reassignment and shall be incorporated into and made a part of this
Reassignment as of the Removal Date and shall amend Schedule 1 to the
Receivables Purchase Agreement.
3. Conveyance of Receivables and Accounts.
(a) The Buyer does hereby transfer, assign, set over and otherwise convey
to the Seller, without recourse, representation or warranty on and after the
Removal Date, all right, title and interest of the Trust in, to and under all
Receivables now existing at the close of business on the Removal Date and
thereafter created from time to time until the termination of the Trust in
Removed Accounts designated hereby, all Collateral Security thereof, the related
Floorplan Rights, all monies due or to become due and all amounts received with
respect thereto (Interest Receivables), all proceeds (as defined in Section 9-
306 of the UCC as in effect in the State of Minnesota and Recoveries) thereof
relating thereto.
(b) If requested by the Seller, in connection with such transfer, the Buyer
agrees to execute and deliver to the Seller, on or prior to the date of this
Reassignment, a termination statement with respect to the Receivables existing
at the close of business on the Removal Date and thereafter created from time to
time and Collateral Security thereof in the Removed Accounts reassigned hereby
(which may be a single termination statement with respect to all such
Receivables and Collateral Security) evidencing the release by the Trust of its
lien on the Receivables in the Removed Accounts and the Collateral Security, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to remove such lien.
4. Acceptance by Buyer. The Buyer hereby acknowledges that, prior to or
simultaneously with the execution and delivery of this Reassignment, the Seller
delivered to the Buyer the computer file or such microfiche or written list
described in section 2(b) of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer as of the date of this Reassignment and as
of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in
C-2
<PAGE>
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
generally and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity);
(b) No Pay Out Event. The removal of the Accounts hereby removed shall
not, in the reasonable belief of the Seller, cause a Pay Out Event to occur or
cause the Pool Balance to be less than the Minimum Aggregate Principal
Receivables;
(c) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Accounts to be removed; and
(d) True and Complete List. The list of Removed Accounts described in
Section 2(b) of this Assignment is, as of the Removal Commencement Date, true
and complete in all material respects.
provided, however, that in the event that the removal on such Removal Date
relates solely to Ineligible Accounts, the Seller shall be deemed to make only
the representations and warranties contained in paragraph 5(a) above.
6. Condition Precedent. In addition to the conditions precedent set
forth in Section 2.6 of the Receivables Purchase Agreement, the obligation of
the Buyer to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Removal Date to the Trustee and the Buyer,
any Agent, and any Enhancement Providers an Officers' Certificate certifying
that (i) as of the Removal Date, all requirements set forth in Section 2.6 of
the Agreement for removing such Accounts and reconveying the Receivables of such
Removed Accounts, the Collateral Security and the related Floorplan Rights,
whether existing at the close of business on the Removal Date or thereafter
created from time to time until the termination of the Trust, have been
satisfied, and (ii) each of the representations and warranties made by the
Seller in Section 5 hereof is true and correct as of the date of this
Reassignment and as of the Removal Date. The Buyer may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Reassignment shall be
read, taken and construed as one and the same instrument.
C-3
<PAGE>
8. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS REASSIGNMENT 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.
C-4
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Buyer
By:____________________________
Name:
Title:
GREEN TREE FINANCIAL
CORPORATION, Seller
By:___________________________
Name:
Title:
C-5
<PAGE>
SCHEDULE 1
----------
LIST OF ACCOUNTS
----------------
[DEEMED TO BE INCORPORATED.]
<PAGE>
EXHIBIT 5.1
-----------
Green Tree Floorplan Funding Corp.
500 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Registration Statement on Form S-1
File No. 33-62433
Ladies and Gentlemen:
We have acted as counsel to Green Tree Floorplan Funding Corp., a Delaware
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-1, File No. 33-62433, filed with the Securities
and Exchange Commission on September 7, 1995, as amended by Amendment No. 1
thereto filed on November 6, 1995 (the "Registration Statement"), relating to
the registration of $200,000,000 of Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class A and $200,000,000 of Floating Rate Floorplan
Receivable Trust Certificates, Series 1995-1, Class B (collectively, the
"Certificates") to be issued by Green Tree Floorplan Receivables Master Trust
(the "Trust"). The Certificates are to be issued under a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") substantially in the form
filed as Exhibit 4.1 to the Registration Statement, among the Company, as
Transferor, Green Tree Financial Corporation, a Delaware corporation, as
Servicer ("Green Tree"), and _____________________, as trustee (the "Trustee")
and a Series 1995-1 Supplement (the "Series 1995-1 Supplement") to the Pooling
and Servicing Agreement substantially in the form filed as Exhibit 4.2 to the
Registration Statement.
We have examined the Registration Statement, the Pooling and Servicing
Agreement, the Series 1995-1 Supplement and such other documents, and have
reviewed such questions of law, as we have considered necessary and appropriate
for the purposes of this opinion. Based on the foregoing, we are of the opinion
that the Certificates, when duly executed, authenticated and delivered in
accordance with the terms of the Pooling and Servicing Agreement and the Series
1995-1 Supplement, will be legally and validly issued, and will be binding
obligations of the Trust pursuant to the terms of the Pooling and Servicing
Agreement and the Series 1995-1 Supplement.
