<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 5, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
GREEN TREE FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
41-1807858
DELAWARE 9999
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
DREW S. BACKSTRAND
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
GREEN TREE MANUFACTURED HOUSING NET INTEREST MARGIN FINANCE CORP. I
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THE CORPORATE TRUST COMPANY
CORPORATION TRUST CENTER
1209 ORANGE STREET
WILMINGTON, DELAWARE 19801
(302) 655-5049
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DREW S. BACKSTRAND
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
CHARLES F. SAWYER CATHY M. KAPLAN
DORSEY & WHITNEY P.L.L.P. BROWN & WOOD
220 SOUTH SIXTH STREET ONE WORLD TRADE CENTER
MINNEAPOLIS, MINNESOTA 55402 NEW YORK, NEW YORK 10048
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act of 1933, check the following box: [_]
---------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Securitized Net Interest
Margin Certificates.... $1,000,000 100% $1,000,000 $344.83
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1995-5, Class C. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1995-4, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1995-3, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1995-2, Class C. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1995-1, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1994-8, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1994-7, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1994-6, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Manufactured Housing
Contract
Senior/Subordinate Pass-
Through Certificates,
Series 1994-5, Class C,
and related Guarantee
Fee payable by such
Trust.................. (2) (2) (2) (3)
- -------------------------------------------------------------------------------
Limited Recourse Note
Issued by Finance I.... (3) (3) (3) (3)
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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) The Residual Assets have no stated principal amount.
(3) No additional consideration will be paid for the Residual Assets, Guarantee
Fees, or the Finance I Note; accordingly, no separate filing fee is being
paid herewith pursuant to Rule 457(n).
<PAGE>
GREEN TREE SECURITIZED NET INTEREST
MARGIN TRUST 1995-A
----------------
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K SHOWING LOCATION IN
PROSPECTUS OF PART I ITEMS OF FORM S-1
<TABLE>
<CAPTION>
ITEM NUMBER AND HEADING
IN FORM S-1 REGISTRATION STATEMENT LOCATION IN PROSPECTUS
---------------------------------- ----------------------
<S> <C>
1.Forepart of the Registration
Statement and Outside Front Cover
Page of Prospectus............... Outside Front Cover Page
2.Inside Front and Outside Back Cover
Pages of Prospectus.............. Inside Front Cover Page; Outside Back
Cover Page
3.Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges.......................... Summary of Terms; Risk Factors
4.Use of Proceeds.................... Use of Proceeds
5.Determination of Offering Price.... Not Applicable
6.Dilution........................... Not Applicable
7.Selling Security Holders........... Not Applicable
8.Plan of Distribution............... Outside Front Cover Page; Underwriting
9.Description of Securities to be
Registered....................... Yield, Average Life and Prepayment
Considerations; Description of the
Certificates; Description of the Trust
Documents
10.Interests of Named Experts and
Counsel.......................... Not Applicable
11.Information with Respect to the
Registrant....................... Outside and Inside Front Cover Pages;
Summary of Terms; Risk Factors; The
Trust; The Trust Property; Historical
and Projected Net Excess Cash Flow;
Yield, Average Life and Prepayment
Considerations; Description of the
Certificates; Use of Proceeds; Appendix
I; Outside Back Cover Page
12.Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities.................. Not Applicable
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION--PRELIMINARY PROSPECTUS DATED JULY , 1995
PROSPECTUS
$
[LOGO OF GREEN TREE FINANCIAL CORPORATION APPEARS HERE]
GREEN TREE SECURITIZED NET INTEREST MARGIN TRUST 1995-A
% SECURITIZED NET INTEREST MARGIN CERTIFICATES
-----------
Green Tree Securitized Net Interest Margin Trust 1995-A (the "Trust") will be
formed pursuant to a Trust Agreement, dated as of June 1, 1995, among Green
Tree Manufactured Housing Net Interest Margin Finance Corp. I ("Finance I"), a
wholly owned subsidiary of Green Tree Financial Corporation ("Green Tree"),
Green Tree Manufactured Housing Net Interest Margin Finance Corp. II ("Finance
II"), a wholly owned subsidiary of Green Tree, and Wilmington Trust Company, as
Trustee. The Trust will issue $ aggregate principal amount of %
Securitized Net Interest Margin Certificates (the "Certificates"). The assets
of the Trust will consist of (i) the residual cashflow from nine real estate
mortgage investment conduits ("REMICs"), whose assets consist of pools of
manufactured housing contracts sold by Green Tree to investors between August
1994 and July 1995 (collectively, the "Securitized Pools"), and (ii) a limited
recourse note (the "Finance I Note") issued by Finance I, and certain related
property (as described herein). The Finance I Note will be secured by, and will
be payable solely from, Guarantee Fees payable with respect to seven of the
Securitized Pools and certain related property, all as described herein.
The Certificates offered hereby represent fractional undivided interests in
the Trust. Principal and interest, at one-twelfth of the interest rate of %
per annum, will be distributed to the Certificateholders on the 15th day of
each month (each, a "Distribution Date"), beginning August 15, 1995. It is a
condition of issuance that the Certificates be rated " " by Fitch Investors
Service, L.P. ("Fitch").
The Final Scheduled Distribution Date for the Certificates will be July 15,
2005. However, payment in full of the Certificates is expected to occur earlier
than such date, as described herein. Investors may be unable to invest payments
of principal received on the Certificates at a rate equal to the interest rate
on the Certificates.
The Certificates initially will be represented by certificates registered in
the name of Cede & Co., the nominee of the Depository Trust Company ("DTC").
The interests of beneficial owners of the Certificates ("Certificate Owners")
will be represented by book entries on the records of the participating member
of DTC. Definitive Certificates will be available only under the limited
circumstances described herein. See "Description of the Certificates--
Registration of the Certificates."
Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Underwriters") intend to make a secondary market in the Certificates, but
have no obligation to do so. There can be no assurance that a secondary market
for the Certificates will develop, or if it does develop, that it will
continue.
The Certificates will not be insured or guaranteed by any governmental agency
or instrumentality, by Green Tree or any of its affiliates, or by the
Underwriters or any of their affiliates, and will be payable only from amounts
held by or owed to the Trust.
-----------
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE CERTIFICATES, SEE "RISK FACTORS" HEREIN.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<CAPTION>
Price to Underwriting Proceeds to
Public(1) Discount(2) the Trust(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Certificate............................. % % %
- --------------------------------------------------------------------------------
Total....................................... $ $ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from July , 1995.
(2) Green Tree has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses, estimated to be $ .
-----------
The Certificates are offered subject to prior sale, when and if issued by the
Trust and accepted by the Underwriters and subject to their right to reject
orders in whole or in part. It is expected that delivery of the Certificates
will be made in book-entry form only through the Same Day Funds Settlement
system of DTC on or about July , 1995.
-----------
LEHMAN BROTHERS MERRILL LYNCH & CO.
July , 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE CERTIFICATES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
Until , 1995, all dealers effecting transactions in the Certificates,
whether or not participating in this distribution, may be required to deliver a
Prospectus. This is in addition to the obligation of dealers to deliver a
Prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
REPORTS TO CERTIFICATEHOLDERS
The Trust will cause to be provided to the holders of the Certificates
certain monthly and annual reports concerning the Certificates and the Trust as
further described in this Prospectus under "Description of the Certificates--
Reports to Certificateholders."
ADDITIONAL INFORMATION
This Prospectus contains a summary of certain material terms of certain of
the documents referred to herein, but does not contain all of the information
set forth in the Registration Statement of which this Prospectus is a part (the
"Registration Statement"). For further information, reference is made to such
Registration Statement and the exhibits thereto which Green Tree has filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended. Statements contained in this Prospectus describing a
provision of any agreement or other document referred to are summaries, and if
this Prospectus indicates that such agreement or other document has been filed
as an exhibit to the Registration Statement, reference is made to the copy of
the agreement or other document filed as an exhibit, each such statement being
qualified in all respects by reference to the actual provision being described.
Copies of the Registration Statement can be inspected and, upon payment of the
Commission's prescribed charges, copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at certain of its Regional Offices located as
follows: New York Regional Office, Seven World Trade Center, 13th Floor, New
York, New York 10048, and Chicago Regional Office, Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661.
2
<PAGE>
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus.
Issuer.................. Green Tree Securitized Net Interest Margin Trust
1995-A (the "Trust"), a Delaware business trust to be
formed on or about July , 1995 (the "Closing Date")
by Green Tree Manufactured Housing Net Interest Mar-
gin Finance Corp. I ("Finance I") pursuant to a Trust
Agreement dated as of June 1, 1995 (the "Trust Agree-
ment") among Finance I, Green Tree Manufactured Hous-
ing Net Interest Margin Finance Corp. II ("Finance
II") and Wilmington Trust Company, as Trustee (the
"Trustee").
Securities Offered...... $ aggregate principal amount of % Securitized
Net Interest Margin Certificates ("SNIMCs" or the
"Certificates"), issued pursuant to the Trust Agree-
ment. The Trust will also issue certificates repre-
senting subordinated interests in the Trust (the
"Subordinated Certificates"), which are not offered
hereby, to Finance I and Finance II.
Trust Property.......... The Certificates will be secured by, and payable
solely from, the Trust Property. The Trust Property
will consist of (i) a limited recourse note in the
initial amount of $ (the "Finance I Note") issued
by Finance I, which in turn will be secured by, and
payable solely from, the Guarantee Fees (as described
below), (ii) the "residual interests" in nine trusts
(the "Residual Assets"), and (iii) the related
property described below. The Trust Property
represents the residual cashflow (net interest
margin) payable from nine pools of manufactured
housing contracts (the "Contracts") sold by Green
Tree between August 1994 and July 1995 (collectively,
the "Securitized Pools"). The initial principal
amount of the Certificates is equal to approximately
% of the sum of (i) the estimated present value of
the Guarantee Fees securing the Finance I Note ($ )
and (ii) the estimated present value of the Residual
Assets ($ ), all as further described in the
diagram on page 10, but such estimates are based on a
number of assumptions about the future performance of
the Guarantee Fees and the Residual Assets. See "Risk
Factors" and "Yield, Average Life and Prepayment
Considerations." In particular, the prepayment
assumptions used in calculating the estimated present
value of the Trust Property are disclosed graphically
on page on the curve entitled "Base Case," and in
the table on page under the heading "Green Tree
Manufactured Housing Contract Prepayment
Information."
A. Finance I Note..... The Finance I Note will be a limited recourse obliga-
tion of Finance I, payable solely from certain assets
(the "Guarantee Fees") acquired by Finance I from
Green Tree. The Finance I Note bears interest at a
rate of % per annum, and principal and interest
thereon is payable on the fifteenth day (or, if such
day is not a business day, the next succeeding busi-
ness day) of each month, beginning August 15, 1995.
Green
3
<PAGE>
Tree is entitled to receive a Guarantee Fee from each
of the 1994-5 Securitized Pool, 1994-6 Securitized
Pool, 1994-7 Securitized Pool, 1994-8 Securitized
Pool, 1995-1 Securitized Pool, 1995-3 Securitized
Pool and 1995-4 Securitized Pool (collectively, the
"Guarantee Fee Securitized Pools") for providing a
guarantee on a class of certificates issued by that
Securitized Pool. The Guarantee Fees each have a
stated maximum amount of 300 basis points of the out-
standing principal balance of the related pool before
servicing fees, expenses and losses. The initial
principal amount of the Finance I Note is equal to
approximately % of the estimated present value of
the Guarantee Fees (as further described in the dia-
gram on page 10), but such estimate is based on a
number of assumptions about the future performance of
the Guarantee Fee Securitized Pools. See "The Trust
Property--The Guarantee Fees" and "Yield, Average
Life and Prepayment Considerations."
B. Residual Assets.... The Residual Assets were issued by nine trusts cre-
ated by Green Tree between August 1994 and July 1995
in connection with Green Tree's periodic
securitizations of manufactured housing contracts
originated and serviced by Green Tree. The Residual
Asset with respect to each such trust represents the
excess cashflow remaining after payment of amounts
due investors in such pool, servicing fees and other
specified trust expenses. The excess cashflow with
respect to the Residual Assets issued by the 1995-2
Securitized Pool and the 1995-5 Securitized Pool,
which do not pay a Guarantee Fee, is basis points
and basis points, respectively, of the outstand-
ing principal balance of such pool, before servicing
fees, losses and expenses. The excess cashflow with
respect to the Residual Assets issued by the Guaran-
tee Fee Securitized Pools are payable only after the
payment of a Guarantee Fee, and accordingly are ex-
pected to generate cash flow only to the extent the
excess cashflow exceeds the stated maximum amount of
the applicable Guarantee Fee. Each of the Residual
Assets constitutes the "residual interest" in a "real
estate mortgage investment conduit" ("REMIC"). See
"The Trust Property--The Residual Assets" and "Yield,
Average Life and Prepayment Considerations."
C. Inside Refinancing
Payments............
In connection with the assignments by Green Tree to
Finance I and Finance II of the Guarantee Fees and
the Residual Assets, Green Tree will agree that, with
respect to any Contract that is refinanced by the
customer through Green Tree (an "inside refinanc-
ing"), Green Tree will pay to Finance I and/or Fi-
nance II, as applicable, an amount intended to equal
the estimated present value of the net excess
cashflow that would have been generated by that Con-
tract had it not been refinanced (an "inside refi-
nancing payment"). The right to receive such inside
refinancing payments will be assigned by Finance I
and Finance II to the Trust. Any such inside refi-
nancing payments relating to the Guarantee Fees will
be applied to pay interest and principal on the Fi-
nance I Note, and any such inside refinancing pay-
ments relating to the Residual Assets will be paid
directly to the Trust, and in either case will be
used by
4
<PAGE>
the Trust to pay interest and principal on the Cer-
tificates. See "The Trust Property--Inside Refinanc-
ing Payments."
Contract Originator and
Servicer............... Green Tree originated all of the Contracts. See
"Green Tree Financial Corporation." Finance I and Fi-
nance II are wholly owned special purpose subsidiar-
ies of Green Tree.
Trustee................. Wilmington Trust Company, as Trustee under the Trust
Agreement. See "Description of the Trust Documents--
the Trustee."
Administrator........... First Trust National Association, St. Paul, Minneso-
ta. The Administrator will perform various adminis-
trative functions on behalf of the Trust.
Terms of the
Certificates........... The principal terms of the Certificates will be as
described below.
A. Distribution
Dates................ Principal and interest on the Certificates will be
payable on the fifteenth day (or, if such day is not
a business day, the next succeeding business day) of
each month, beginning August 15, 1995 (each, a "Dis-
tribution Date") to holders of record as of the busi-
ness day immediately preceding the related Distribu-
tion Date (the "Record Date"). Distributions of in-
terest and principal on the Certificates on any Dis-
tribution Date will be made only from amounts on de-
posit in the Certificate Account on such Distribution
Date (the "Amount Available"). In the event that the
Amount Available is not sufficient to make a full
distribution of amounts due on any Distribution Date,
the amount of the deficiency will be carried forward
as an amount that the Certificateholders are entitled
to receive on the next Distribution Date. Any amount
carried forward will, to the extent legally permissi-
ble, bear interest at the Interest Rate (as defined
below).
B. Interest........... % per annum (the "Interest Rate") payable monthly
at one-twelfth of the annual rate (calculated on the
basis of a 360-day year of 30-day months).
On each Distribution Date, the Trustee will distrib-
ute pro rata to Certificateholders accrued and unpaid
interest at the Interest Rate on the aggregate out-
standing principal amount of the Certificates (the
"Certificateholders' Interest Distributable Amount").
Interest in respect of a Distribution Date will ac-
crue from the most recent Distribution Date to which
interest has been paid to but excluding such Distri-
bution Date. Finance I and Finance II will receive a
distribution of interest on August 15, 1995 equal to
the interest accrued on the initial principal amount
of the Certificates at the Interest Rate from June
15, 1995 to the Closing Date. Certificateholders of
record on August 14, 1995 will receive a distribution
of interest on August 15, 1995 equal to the interest
accrued on the initial principal amount of the Cer-
tificates at the Interest Rate from the Closing Date
to August 15, 1995.
In the event that the Amount Available (as defined
below) in the Certificate Account (as defined below)
is not sufficient to make a full distribution of the
Certificateholders' Interest Distributable Amount,
the amount of the deficiency will be carried forward
as an amount that the Certificateholders are entitled
to receive on the next Distribution Date. Any amount
carried forward will, to the extent legally permissi-
ble, bear interest at the Interest Rate.
C. Principal.......... On each Distribution Date, all funds held by the
Trust in the Certificate Account after payment of the
Certificateholders' Interest Distributable Amount
will be payable as principal on the Certificates (the
"Certificateholders' Principal Distributable
Amount"). The distribution of principal on August 15,
1995 will represent collections on the Trust Property
for July 15 and August 15, 1995.
5
<PAGE>
D. Optional
Prepayment........... The holders of the Subordinated Certificates may, on
any Distribution Date when the outstanding principal
amount of the SNIMCs is less than 10% of the original
principal amount of the SNIMCs, cause the Trust to
prepay the SNIMCs in whole but not in part by con-
tributing cash to the Trust in an amount equal to the
unpaid principal amount of the SNIMCs (plus any ac-
crued and unpaid interest on the SNIMCs).
E. Subordination of
Subordinated
Certificates....... The Subordinated Certificates will have an estimated
initial principal value of $ . No payments of prin-
cipal or interest will be made on the Subordinated
Certificates (which are not being offered hereby) un-
til the SNIMCs have been paid in full.
Certain Federal Income
Tax Consequences....... In the opinion of Dorsey & Whitney P.L.L.P., counsel
to the Trust, for federal income tax purposes, the
Trust will not be characterized as an association (or
a publicly traded partnership) taxable as a corpora-
tion. Although there are no regulations, published
rulings or judicial decisions involving the charac-
terization for federal income tax purposes of inter-
ests with the same terms as the Certificates, and al-
though the result is not free from doubt, on balance,
in the opinion of Dorsey & Whitney P.L.L.P., it is
more likely than not that the Certificates will be
classified as debt for federal income tax purposes.
Alternative characterizations of the Certificates are
possible, but would not result in materially adverse
tax consequences to the Certificateholders. See "Cer-
tain Federal Income Tax Consequences."
ERISA Considerations.... The Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and the Internal Revenue Code
of 1986, as amended (the "Code"), impose certain re-
quirements on those pension, profit sharing and other
employee benefit plans to which they apply and on
those persons who are fiduciaries with respect to
such plans. Prospective investors who are subject to
ERISA and the relevant provisions of the Code should
consult their legal advisors about applicable re-
strictions taking into account that the Underwriters
have advised Green Tree that they intend (although
they are not obligated) to make a market in the Cer-
tificates and to distribute the Certificates in a
manner that will result in the Certificates initially
being held by more than 100 unrelated investors. In
accordance with ERISA's fiduciary standards, before
investing in the Certificates a fiduciary should de-
termine whether such an investment is permitted under
the documents and instruments governing the plan and
is appropriate for the plan in view of its overall
investment policy and the composition and diversifi-
cation of its investment portfolio. See "ERISA Con-
siderations."
Legal Investment
Considerations......... The Certificates may not be acquired by a "disquali-
fied organization" (as defined herein). By acceptance
of a Certificate, each purchaser will be deemed to
represent that it is not a disqualified organization.
See "Description of the Certificates--Restrictions on
Transfer."
The Certificates will not constitute "mortgage re-
lated securities" for purposes of the Secondary Mort-
gage Market Enhancement Act of 1984.
6
<PAGE>
Accordingly, institutions whose investment activities
are subject to review by federal or state regulatory
authorities should consult with their counsel or the
applicable authorities to determine whether and to
what extent the Certificates constitute legal invest-
ments for them. See "Legal Investment Considera-
tions."
Rating.................. It is a condition to the issuance of the Certificates
that they be rated " " by Fitch. The rating of the
Certificates by Fitch addresses the likelihood of the
timely payment of interest and ultimate payment of
principal on the Certificates. A security rating is
not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any
time by the rating agency.
Green Tree has not requested a rating of the Certifi-
cates from any rating agency other than Fitch. Howev-
er, there can be no assurance that another rating
agency will not rate the Certificates or, if one
does, what rating would be assigned by such rating
agency.
7
<PAGE>
RISK FACTORS
Prospective Certificateholders should consider, among other things, the
following factors in connection with the purchase of the Certificates:
1. Limited Liquidity. The Certificates will not constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984 ("SMMEA"). Accordingly, many institutions with
legal authority to invest in SMMEA securities will not be able to invest in
the Certificates, limiting the market for such securities.
There currently is no secondary market for the Certificates. The
Underwriters expect, but are not obligated, to make a market in the
Certificates. There can be no assurance that any such market will develop
or continue.
2. Credit Risks; Limited Assets. Because of the nature of the Trust
Property and the complexity of analyzing the credit risks associated
therewith, the Certificates are an appropriate investment only for persons
familiar with manufactured housing contract performance and asset-backed
security structures. The Trust will not have, nor is it permitted or
expected to have, any significant assets or sources of funds other than the
Finance I Note and the Residual Assets. Finance I likewise will not have,
nor is it permitted or expected to have, any available assets or sources of
funds other than the Guarantee Fees. Certificateholders must therefore rely
for repayment solely upon payments on the Guarantee Fees and the Residual
Assets.
3. Risks of Manufactured Housing Contracts. Losses on the Contracts above
certain assumed levels, as described in "Yield, Average Life and Prepayment
Considerations," would adversely affect the yield on the Certificates. Loss
experience on the Contracts may be affected by, among other things, a
downturn in regional or local economic conditions. These regional or local
economic conditions may be volatile, and historically have affected the
delinquency, loan loss and repossession experience of the Contracts.
Moreover, regardless of its location, manufactured housing generally
depreciates in value. Consequently, the market value of certain
manufactured homes could be or become lower than the principal balance of
the Contracts they secure.
4. Subordination of Trust Property. As described in "The Trust Property,"
payments of principal and interest on the manufactured housing contracts in
the the Securitized Pools will be available to make payments on the
Certificates only after required payments have been made on the related
securities issued in such prior offerings. The order of priority for
monthly distribution of all collected funds in a Securitized Pool is (i)
Class A principal and interest, (ii) Class B principal and interest, and
(iii) the Trust Property. Accordingly, losses on the Contracts generally
will be absorbed by the Trust Property before being allocated to the
related securities issued in such prior offerings. In addition, the only
credit enhancement available to the holders of the Certificates is the
estimated overcollateralization of the Finance I Note and the estimated
overcollateralization of the Certificates.
The yield on the Certificates may also be affected by an extremely fast
rate of principal payments on the Contracts (including defaults and
voluntary prepayments) and by an unusually rapid prepayment of Contracts
with higher than average interest rates. Investors in the Certificates
should consider the risk that, if the Contracts experience extreme
prepayment rates, Certificateholders may experience a reduction in yield or
fail to recoup fully their initial investments. See "Yield, Average Life
and Prepayment Considerations."
Unlike standard corporate bonds, the timing and amount of principal
payments on the Certificates is not fixed and will be determined by the
timing and amount of cash flows in the Trust Property, which in turn will
be dependent on the rate of prepayments and by the timing and amount of
delinquencies and losses realized on the Contracts. The timing of principal
payments on manufactured housing contracts is affected by a variety of
economic, geographic, legal and social factors, primarily because
manufactured housing contracts may be prepaid by the borrowers at any time.
8
<PAGE>
5. Certain Matters Relating to Insolvency. Green Tree intends that the
assignment of the Guarantee Fees and the Residual Assets to Finance I and
Finance II and then the issuance of the Finance I Note and the transfer of
the Residual Assets to the Trust constitute a sale, rather than a pledge of
the Guarantee Fees and the Residual Assets to secure indebtedness of Green
Tree. However, if Green Tree were to become a debtor under the federal
bankruptcy code, it is possible that a creditor or trustee in bankruptcy of
Green Tree or Green Tree as debtor-in-possession may argue that the sale of
the Guarantee Fees and the Residual Assets by Green Tree was a pledge of
the Guarantee Fees and the Residual Assets rather than a sale. This
position, if presented to or accepted by a court, could result in a delay
in or reduction of distributions to the Certificateholders.
In addition, Dorsey & Whitney P.L.L.P., counsel to Green Tree, will
render an opinion to the effect that, in the event Green Tree were to
become a debtor under the federal bankruptcy code, a court would not order
that the assets and liabilities of Finance I, Finance II and Green Tree
should be consolidated. Such opinion is subject to a number of assumptions,
qualifications and exceptions, and any such consolidation in the event of
Green Tree's bankruptcy could result in a delay in or reduction of
distributions to the Certificateholders.
The steps necessary to perfect the security interest in a manufactured
home will vary from state to state, and in any given state may vary
depending on the nature and location of the individual manufactured home.
Because of the expense and administrative inconvenience involved, Green
Tree did not amend any certificates of title or file any assignments of
mortgage to record the interest of the purchaser of each Contract.
Consequently, in the absence of such amendment or recordation, the
assignment to the trustee of the Securitized Pool of the security interest
in the manufactured home may not be effective in favor of such pool trustee
or the assignment of the security interest may not be effective against
creditors of Green Tree or a trustee in bankruptcy of Green Tree. Green
Tree's insolvency and subsequent termination as servicer of the Contracts
might accordingly result in increased delays and expense in liquidating
Contracts secured by manufactured homes located in some states.
SUMMARY OF TRANSACTION
On the Closing Date, Green Tree will assign the Guarantee Fees and the
Residual Assets to Finance I and Finance II (collectively, the "Subordinated
Certificateholders"), pursuant to two substantially similar Assignments, dated
as of June 1, 1995 (each an "Assignment," and collectively the "Assignments").
The Subordinated Certificateholders will in turn establish the Trust by the
issuance of the Finance I Note and the transfer of the Residual Assets to the
Trust pursuant to a Transfer Agreement, dated as of June 1, 1995 (the "Transfer
Agreement"). The Trust will then issue the Certificates pursuant to the Trust
Agreement, and remit the proceeds of the sale of the Certificates (net of
certain expenses) to Finance I and Finance II. The Subordinated Certificates,
which are not being offered hereby, will be issued to Finance I and Finance II.
On each Distribution Date, Finance I will remit to the Trustee on behalf of
the Trust (i) interest then due and payable on the Finance I Note, plus (ii)
principal then due and payable on the Finance I Note (equal to all Guarantee
Fee collections remitted to Finance I on such Distribution Date, net of the
interest paid on the Finance I Note). On each Distribution Date, the Trustee
will also receive all distributions on the Residual Assets, plus any inside
refinancing payments and repurchase payments made by Green Tree as described
herein.
On each Distribution Date, from (i) payments received on the Finance I Note
and (ii) distributions received on the Residual Assets, the Trustee on behalf
of the Trust will make the required payments on the SNIMCs, first to pay
interest then due and payable, then to pay any expenses of the Trust which
Green Tree or the Subordinated Certificateholders were obligated to pay but did
not pay, and then all remaining collected funds will be applied to reduce the
principal amount of the SNIMCs. The Subordinated Certificates will receive no
distributions until the SNIMCs are paid in full.
9
<PAGE>
[INSERT STRUCTURAL DIAGRAM]
[TO BE SUPPLIED]
10
<PAGE>
GREEN TREE FINANCIAL CORPORATION
GENERAL
Green Tree purchases, pools, sells and services conditional sales contracts
for manufactured housing throughout the nation. Green Tree is currently the
largest servicer of manufactured housing government insured or guaranteed
contracts, and is one of the largest servicers of conventional manufactured
housing contracts, in the United States. Green Tree operates its business
through 49 regional service centers throughout the United States, serving all
50 states. Green Tree's principal executive offices are located at 1100
Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639
(telephone (612) 293-3400). Set forth below are summary consolidated financial
data of Green Tree for each of the years in the five-year period ended
December 31, 1994 and for the period ended March 31, 1995. Green Tree is not
guaranteeing or otherwise obligated with respect to the Certificates, except
to the extent of its obligations under the Trust Documents as described
herein. Green Tree's Annual Report on Form 10-K for the year ended December
31, 1994, most recent Proxy Statement and, when available, subsequent
quarterly and annual reports are available from Green Tree upon written
request.
<TABLE>
<CAPTION>
AT AND
FOR THE
PERIOD ENDED
MARCH 31, AT AND FOR THE YEAR ENDED DECEMBER 31,
------------ --------------------------------------------------
1995 1994 1993 1992 1991 1990
------------ ---------- ---------- ---------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Income.................. $ 128,199 $ 497,427 $ 366,680 $ 246,615 $214,765 $175,675
Net Earnings............ 50,729 181,279 116,423 55,015 56,688 36,542
Total Assets............ 1,936,940 1,771,839 1,739,502 1,167,055 969,161 814,662
Total Debt.............. 309,650 309,319 515,004 376,043 361,410 335,757
Stockholders' Equity.... 786,243 725,891 549,429 298,834 237,544 192,478
</TABLE>
CONTRACT ORIGINATION
Green Tree originated all of the Contracts. Through its regional service
centers, Green Tree arranges to purchase manufactured housing contracts from
manufactured housing dealers located throughout the United States. Green
Tree's regional service center personnel contact dealers located in their
region and explain Green Tree's available financing plans, terms, prevailing
rates and credit and financing policies. If the dealer wishes to use Green
Tree's available customer financing, the dealer must make an application for
dealer approval. Upon satisfactory results of Green Tree's investigation of
the dealer's creditworthiness and general business reputation, Green Tree and
the dealer execute a dealer agreement. Green Tree also originates manufactured
housing installment loan agreements directly with customers.
All contracts that Green Tree originates are written on forms provided by
Green Tree and are originated on an individually approved basis in accordance
with Green Tree's guidelines. The dealer or the customer submits the
customer's credit application and purchase order to a regional service center
where Green Tree personnel make an analysis of the creditworthiness of the
proposed buyer. The analysis includes a review of the applicant's paying
habits, length and likelihood of continued employment, and certain other
factors. Green Tree's current underwriting guidelines for conventional
contracts require that the monthly payment on the contract not exceed 31% of
the obligor's monthly income and that the monthly payment on the contract,
together with the obligor's other fixed monthly obligations, not exceed 50% of
the obligor's monthly income. Manufactured housing contracts are assumable by
any individual who meets Green Tree's then-current underwriting criteria. With
respect to conventional contracts for new manufactured homes, Green Tree may
finance up to the lesser of (a) 95% of the cash sale price (including taxes,
fees and insurance) or (b) 130% of the manufacturer's invoice price plus 100%
of taxes and license fees, 130% of freight charges, 100% of the dealer's cost
of additional dealer-installed equipment (not to exceed 25% of the amount
financed in all states except California; not to exceed 70% of the
manufacturer's invoice price in California if required to meet park
requirements), and up to $1,500 of set-up costs per module. With respect to
used manufactured homes, Green Tree may finance up to 95% of the lesser of (a)
the total delivered sales price of the unit (including taxes, fees, insurance
and up to $900 of set-up costs per module), or (b) the appraised value of the
unit plus taxes, fees, and insurance. Such appraisals on used manufactured
homes are performed by employees of Green Tree. If the application meets Green
Tree's guidelines and the credit is approved, Green Tree purchases the
contract after the manufactured home is delivered and set up and the customer
has moved in. The guidelines in this paragraph may be exceeded when Green
Tree's underwriters deem it appropriate.
11
<PAGE>
Green Tree computes the loan-to-value ratio with respect to each Contract by
first computing the percentage relationship that the down payment (which, in
the case of certain Contracts, may include the borrower's equity in land for
which a lien has been granted to Green Tree) bears to the total loan amount
plus such down payment, then subtracting the result from one. For certain
Contracts in which a lien on land has been granted to Green Tree in lieu of a
cash down payment, the loan-to-value ratio is computed by dividing the
appraised value of the land by the total loan amount and subtracting the result
from one. Manufactured Homes, unlike site-built homes, generally depreciate in
value. Consequently, at any time after origination it is possible, especially
in the case of Contracts with high loan-to-value ratios at origination, that
the market value of a Manufactured Home may be lower than the principal amount
outstanding under the related Contract.
For manufactured housing contracts, Green Tree uses a proprietary automated
credit scoring system which was initially implemented in 1988 and subsequently
refined and statistically re-validated in 1991. It is a statistically based
scoring system which quantifies responses using variables obtained from
customers' credit applications. As of December 31, 1994, this credit scoring
system had been used in making credit determinations on approximately
applications. Green Tree believes the use of this proprietary credit scoring
system has contributed to the reduction in the number of repossessions incurred
as a percentage of Green Tree's servicing portfolio, as indicated in the table
below.
POOLING AND DISPOSITION OF CONTRACTS
Green Tree generally pools contracts for sale to investors within 15 to 120
days of purchase. With respect to conventional manufactured housing contracts,
Green Tree sells pools of contracts through the asset securitization vehicles
described under "The Trust Property" below.
SERVICING
Green Tree services all of the manufactured housing contracts it originates
or purchases from other originators, collecting loan payments, taxes and
insurance payments where applicable and other payments from borrowers and
remitting principal and interest payments to the holders of the conventional
contracts. Green Tree management is not aware of any trends or anomalies which
have adversely affected the delinquency, loan loss or repossession experience
of the Contracts.
The following table sets forth the delinquency experience at December 31 for
each of the past five years and at March 31, 1995 of the portfolio of
conventional manufactured housing contracts serviced by Green Tree (other than
contracts already in repossession) (excluding contracts serviced for others).
Substantially all of the Contracts included in the Securitized Pools are
conventional Contracts, meaning that they are not issued or guaranteed by any
governmental agency.
DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
AT
AT DECEMBER 31, MARCH 31,
------------------------------------------- ---------
1990 1991 1992 1993 1994 1995
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Number of Contracts Out-
standing (1) .......... 134,867 151,779 175,730 237,566 322,495 340,645
Number of Contracts De-
linquent (2):
30-59 Days............ 1,795 2,161 1,849 2,030 2,809 2,196
60-89 Days............ 656 705 603 657 903 840
90 Days or More....... 874 1,194 1,110 1,167 1,440 1,533
Total Contracts Delin-
quent.................. 3,325 4,060 3,562 3,854 5,152 4,569
Delinquencies as a
Percent of Contracts
Outstanding (3)........ 2.47% 2.67% 2.03% 1.62% 1.60% 1.34%
</TABLE>
- --------
(1) Excludes contracts already in repossession.
(2) The period of delinquency is based on the number of days payments are
contractually past due (assuming 30-day months). Consequently, a contract
due on the first day of a month is not 30 days delinquent until the first
day of the next month.
(3) By number of contracts.
12
<PAGE>
The following table sets forth the loan loss and repossession experience for
the periods indicated of the portfolio of conventional manufactured housing
contracts serviced by Green Tree (excluding contracts serviced for others).
LOAN LOSS/REPOSSESSION EXPERIENCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
AT DECEMBER 31, MARCH 31,
---------------------------------------------------------- ------------
1990 1991 1992 1993 1994 1995
---------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Number of Contracts
Serviced (1)........... 136,331 153,435 176,925 238,951 324,141 342,510
Principal Balance of
Contracts Serviced (1). $2,200,196 $2,477,595 $2,996,582 $4,630,659 $7,033,882 $7,553,145
Contract Liquidations
(2).................... 2.79% 2.82% 2.75% 1.77% 1.44% .36%
Net Losses:
Dollars (3)........... $ 30,053 $ 34,842 $ 47,817 $ 42,547 $ 42,402 $ 11,255
Percentage (4)........ 1.37% 1.41% 1.60% .92% .60% .15%
</TABLE>
- --------
(1) As of period end. Includes contracts already in repossession.
(2) As a percentage of the total number of contracts being serviced as of
period end.
(3) The calculation of net loss includes unpaid interest to the date of
repossession and all expenses of repossession and liquidation.
(4) As a percentage of the principal balance of contracts being serviced as of
period end.
Finance I and Finance II are wholly owned special purpose subsidiaries of
Green Tree.
THE TRUST
The Issuer, Green Tree Securitized Net Interest Margin Trust 1995-A, is a
business trust formed under the laws of the State of Delaware pursuant to the
Trust Agreement for the transactions described in this Prospectus. Prior to the
issuance of the Finance I Note and the transfer of the Residual Assets to the
Trust, the Trust will have no assets or obligations. After its formation, the
Trust will not engage in any activity other than (i) acquiring and holding the
Trust Property and the proceeds therefrom, (ii) issuing the Certificates and
the Subordinated Certificates, (iii) making payments on the Certificates and
(iv) engaging in other activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith.
The Trust's principal offices are in Wilmington, Delaware, in care of
Wilmington Trust Company, as Trustee, at the address listed below under "The
Trustee."
THE TRUSTEE
Wilmington Trust Company is the Trustee under the Trust Agreement. Wilmington
Trust Company is a Delaware banking corporation and its principal offices are
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890-0001. Green Tree and its affiliates may maintain commercial banking
relations with the Trustee and its affiliates. The Trustee will perform limited
administrative functions under the Trust Agreement, including making
distributions from the Certificate Account. The Trustee's liability in
connection with the issuance and sale of the Certificates is limited solely to
the express obligations of the Trustee set forth in the Trust Agreement. The
Trustee may resign at any time, in which event the Subordinated
Certificateholders will be obligated to appoint a successor trustee. The
Subordinated Certificateholders may also remove the Trustee if the Trustee
ceases to be eligible to continue as Trustee under the Trust Agreement or if
the Trustee becomes insolvent. In such circumstances, the Subordinated
Certificateholders will be obligated to appoint a successor trustee. Any
resignation or removal of a Trustee and appointment of a successor trustee will
not become effective until acceptance of the appointment by the successor
trustee.
13
<PAGE>
THE TRUST PROPERTY
The Trust Property will consist of the Finance I Note and the Residual
Assets. Finance I's obligation under the Finance I Note is limited to paying
all proceeds of the Guarantee Fees to the Trust until the Finance I Note is
paid in full. The Trust has no recourse against Finance I for a default on the
Finance I Note other than to foreclose upon and sell the Guarantee Fees
pledged to secure the Finance I Note, and Finance I thus has a right of offset
relative to the Guarantee Fees and the Finance I Note. The Guarantee Fees and
the Residual Assets represent the residual cashflow (net interest margin)
payable from the nine Securitized Pools. Each of the Securitized Pools is
described in greater detail in Appendix I to this Prospectus. The table below
identifies each of the Securitized Pools and the Guarantee Fees and Residual
Assets produced by it. All the statistical information provided below and in
Appendix I was derived from Green Tree's financial books and records.
NET INTEREST MARGIN SEGMENTATION
<TABLE>
<CAPTION>
POOL
PRINCIPAL WEIGHTED AVERAGE SERVICING
TRANSACTION BALANCE INTEREST MARGIN(1) FEE GUARANTEE FEE RESIDUAL ASSET
- ----------- --------- ------------------ --------- ------------- --------------
<S> <C> <C> <C> <C> <C>
GTFC 1994-5............. $ % 0.50% 3.00%
GTFC 1994-6............. 0.50 3.00
GTFC 1994-7............. 0.50 3.00
GTFC 1994-8............. 0.50 3.00
GTFC 1995-1............. 0.50 3.00
GTFC 1995-2............. 0.50 N/A
GTFC 1995-3............. 0.50 3.00
GTFC 1995-4............. 0.50 3.00
GTFC 1995-5............. 0.50 N/A
------ ----
Total.................. $ 0.50%
====== ====
</TABLE>
- --------
(1) Represents the gross interest spread between the weighted average loan
rate and the weighted average investor rate for each pool as of the Cut-
off Date stated as a percentage of the outstanding pool balance before
losses, servicing fee and other trust expenses.
(2) Indicates a Residual Asset which generally is not expected to receive
significant amounts of net excess cash flow due to the existence of a
Guarantee Fee which is expected to consume substantially all net excess
cash flow.
The estimated present value of each Guarantee Fee and each Residual Asset
was calculated based on a number of assumptions about the future performance
of the Contracts. Those assumptions were in turn based upon an extensive loan-
by-loan statistical analysis of the historical performance of Green Tree's
servicing portfolio of manufactured housing contracts since 1976. This
Prospectus first describes the characteristics of the Guarantee Fees and the
Residual Assets; it then describes the historical and base-case projected
prepayment, default and recovery experience of Green Tree's servicing
portfolio; finally, pages disclose the projected performance of the
Certificates under Green Tree management's base-case projections of Contract
prepayment, default and recovery, and the performance of the Certificates
under a variety of alternative default and interest rate scenarios.
Additional information with respect to the Securitized Pools is included in
Appendix I.
THE GUARANTEE FEES
The Finance I Note will have an initial principal amount of $ . The
Guarantee Fees have an aggregate estimated present value as of June 1, 1995 of
approximately $ , but such estimate is based on a number of assumptions
about the future performance of the Guarantee Fee Securitized Pools, as
described below under "Yield, Average Life and Prepayment Considerations."
For each Guarantee Fee Securitized Pool, Green Tree is obligated to pay the
amount, if any, by which the collected funds available to make the monthly
distribution of principal and interest on the related Class B-2 Certificates
sold to investors is less than the scheduled distribution amount for such
month. These Class B-2 Certificates are themselves subordinated to other
classes of securities issued by the related Guarantee Fee
14
<PAGE>
Securitized Pool and sold to investors. Green Tree's guarantee with respect to
each such pool is not limited as to amount. As compensation for providing each
such guarantee, Green Tree is entitled to receive a Guarantee Fee equal to the
net excess cashflow produced by the related pool of contracts after payment of
principal and interest due investors, payment of Green Tree's servicing fee,
and payment of certain expenses of the related trust not otherwise paid by the
servicer (but in no event greater than one-twelth of 3.00% of the outstanding
balance of such pool). Because these Guarantee Fees are determined only after
all available funds have been applied to pay interest and principal on the
related investor securities, these Guarantee Fees are adversely affected by
delinquencies and liquidation losses on the related contracts, and Green Tree
will be obligated to make payments under its guarantee only when the related
Guarantee Fee was zero (because all available cashflow had been used to pay
investor principal and interest). With respect to the 1995-2 Securitized Pool
and the 1995-5 Securitized Pool, Green Tree is obligated to provide a similar
guarantee, but is not entitled to receive a Guarantee Fee; Green Tree did,
however, receive the Residual Asset in each such pool. See "--The Residual
Assets" below.
The Pooling and Servicing Agreements with respect to the Guarantee Fee
Securitized Pools provide that the Guarantee Fee continues to be payable to
Green Tree notwithstanding any failure by Green Tree to perform its guarantee
obligations.
On the Closing Date, Green Tree will assign to Finance I the right to receive
all Guarantee Fees. Finance I will in turn pledge the right to receive all
Guarantee Fees to secure payments on the Finance I Note.
THE RESIDUAL ASSETS
The Residual Assets have an aggregate estimated present value as of June 1,
1995 (or July 1, 1995, with respect to the 1995-5 Securitized Pool) (the "Cut-
off Date") (based on the assumptions described under "Yield, Average Life and
Prepayment Considerations" below) of $ . For each Securitized Pool, an
election was made to treat the related trust as a "Real Estate Mortgage
Investment Conduit" ("REMIC") for federal income tax purposes. The REMIC
regulations require that the REMIC issue a single class of "residual interest,"
in addition to one or more classes of "regular interests." The securities sold
by Green Tree to investors were "regular interests," and Green Tree or a
subsidiary retained the residual interest issued by each REMIC.
The Residual Assets with respect to the Guarantee Fee Securitized Pools
represent the right to receive all net excess cashflow each month after payment
of principal and interest due investors, payment of Green Tree's servicing fee,
payment of Green Tree's Guarantee Fee, and payment of certain expenses of the
related trust not otherwise paid by the servicer. Because of the existence of
the Guarantee Fees, the net interest margin payable with respect to the
Guarantee Fee Securitized Pools Residual Assets is not very large. The Residual
Assets with respect to the 1995-2 Securitized Pool and the 1995-5 Securitized
Pool represent the right to receive all net excess cashflow each month after
payment of principal and interest due investors, payment of Green Tree's
servicing fee, and payment of certain expenses of the related trust not
otherwise paid by the servicer. The 1995-2 Securitized Pool and the 1995-5
Securitized Pool do not provide for the payment of a Guarantee Fee, and the
monthly cashflow payable to the holder of the related Residual Assets is
similar in character to the net excess cashflow payable as the Guarantee Fee
with respect to the Guarantee Fee Securitized Pools. The net interest margins
payable with respect to the 1995-2 Securitized Pool Residual Asset and the
1995-5 Securitized Pool Residual Asset are estimated to be basis points and
basis points, respectively, before servicing fees, losses and expenses.
On the Closing Date, Green Tree will assign the Residual Assets to Finance I
and Finance II. Finance I and Finance II will in turn assign the Residual
Assets to the Trust.
INSIDE REFINANCING PAYMENTS
Obligors on existing Green Tree manufactured housing contracts sometimes
refinance their Contracts. When a customer inquires about a payoff balance for
the purpose of considering refinancing, Green Tree will
15
<PAGE>
advise the customer of its current rates and terms for such a refinancing.
Green Tree may from time to time or under certain circumstances solicit
customers to refinance their Contracts. If the customer on a Contract for any
reason refinances his or her Contract with Green Tree, the consequence to the
Trust of such an "inside refinancing" is (i) a prepayment in full of the
Contract, with the resulting termination of the net excess cashflow being
generated by that Contract, and (ii) the origination of a new contract, which
Green Tree may sell in a future securitization, which would thereby generate
net excess cashflow that would be owned by Green Tree. To protect
Certificateholders against the effect of such prepayments, Green Tree has
agreed in the Assignments to pay an amount with respect to each Contract that
has been the subject of an inside refinancing (the "inside refinancing
payment") which is intended to equal the estimated present value of the net
excess cashflow that could have been generated by that Contract had it not been
refinanced. Such payment will be based on a precomputed factor with respect to
the related Securitized Pool, calculated for each Distribution Date as of the
Closing Date, multiplied by the remaining principal balance of such Contract.
Such payments will be remitted to the Trust on the Distribution Date following
the month in which the Contract was refinanced. Historically, approximately 50%
of the Contracts that Green Tree believes were prepaid as a result of voluntary
refinancings were refinanced through Green Tree.
Green Tree, as servicer of the Contracts in the Securitized Pools, has the
right to repurchase the Contracts in any pool when the outstanding principal
balance of such pool has declined to 10% or less of its initial principal
balance. Any such repurchase would have the effect of a prepayment of all the
Contracts in that pool, and Green Tree has agreed to make a similar payment
with respect to any such repurchased Contracts. Green Tree has also agreed to
make a similar payment for any Contract which is repurchased by Green Tree
because of a breach of certain representations and warranties contained in the
applicable Pooling and Servicing Agreement.
HISTORICAL AND PROJECTED NET EXCESS CASHFLOW
The following graphs depict the projected net excess cashflow and other items
for the Securitized Pools beginning in , based on a number of assumptions
about future performance of the Contracts as described in "Yield, Average Life
and Prepayment Considerations." Each of the Securitized Pools are described in
further detail in "The Trust Property" and in Appendix I hereto.
The projected cashflow scenarios are provided by Green Tree to assist
potential investors in an evaluation of the Certificates offered hereby. These
projections are not to be viewed as fact and should not be relied upon as an
accurate representation of future results. Furthermore, because such
projections are based on estimates and assumptions about circumstances and
events that have not yet taken place and are subject to variations, the actual
circumstances and events may not be consistent with those assumed herein and
the differences between actual and projected results may be material.
16
<PAGE>
[INSERT TABLE ON TOTAL SECURITIZED CASHFLOWS]
17
<PAGE>
YIELD, AVERAGE LIFE AND PREPAYMENT CONSIDERATIONS
GENERAL
The yield, average life and expected maturity of the Certificates may be
affected by a number of factors that may affect the amounts and timing of the
distributions on the Trust Property. The two primary factors are defaults and
voluntary prepayments on the Contracts, which in turn are influenced by changes
in borrowers' housing needs, job transfers, unemployment and borrowers' net
equity in the manufactured homes. All the Contracts may be prepaid at any time
without penalty, and have due-on-sale clauses.
An acceleration in the prepayment of the Contracts will generally result in
reduced cashflow to the Trust, resulting in slower payments of principal on the
Certificates. Conversely, if the rate of prepayments on the Contracts
decreases, the Trust generally would be expected to receive increased cashflow,
resulting in faster payments of principal on the Certificates. Moreover,
because the classes of investor securities in any Securitized Pool have
different interest rates, and because the lower-rate classes often are entitled
to receive principal distributions first, prepayments on the Contracts may
increase the weighted average interest rate on the investor securities,
reducing the net excess cashflow available to the Trust.
If the purchaser of a Certificate offered at a discount from its initial
principal amount calculates its anticipated yield to maturity based on a rate
of principal payments on the Certificates that is faster than that actually
experienced, the actual yield to maturity will be lower than that so
calculated.
PORTFOLIO PREPAYMENT EXPERIENCE
The following graph is provided by Green Tree and presents the historical
monthly prepayment experience (both defaults and voluntary prepayments) of
Green Tree's manufactured housing servicing portfolio, on a loan-by-loan basis,
from January 1984 through 1995, expressed on a weighted average
conditional prepayment rate (CPR) basis.
WEIGHTED AVERAGE HISTORICAL MONTHLY PREPAYMENT RATES (CPR)
18
<PAGE>
The following graphs present Green Tree management's best estimate of the
weighted average projected CPR (both defaults and voluntary prepayments) of all
the Contracts included in the Securitized Pools, under varying interest rate
scenarios. The graphs depict the weighted average projected CPR curve, assuming
Contract defaults occur at 100% of the Manufactured Housing Projected Default
Assumption, for assumed immediate interest rate shifts of -300 basis points
through +300 basis points from the current Green Tree Contract Rate of % with
respect to conventional Contracts. The graphs also disclose in the legends the
constant CPR rate, which is equivalent to the average of such curve, for each
such interest rate scenario. Green Tree's estimate of future prepayments is
based on a detailed statistical analysis of historical voluntary prepayments,
defaults and recoveries on all conventional loans originated by Green Tree from
1976 through , including voluntary prepayment behavior during recent
periods of dramatic interest rate declines. The manufactured housing contracts
in Green Tree's portfolio that were prepaid were analyzed by a number of
variables, including loan type (conventional), seasoning, seasonality,
collateral characteristics (new or used, single- or multi-wide), refinancing
incentive (the probability that obligors will refinance as interest rates
decline), prepayment burnout (pools of manufactured housing loans that
experience refinancing incentive for an extended period of time show increasing
prepayment activity in the beginning of the period but a slowing of the
prepayment rate over time), and a number of other factors. By applying the
results of the statistical analysis of voluntary prepayments, defaults and
recoveries to the Contracts on a loan-by-loan basis and calculating the
weighted average of all loans in the portfolio, Green Tree has derived its
estimate of future prepayments as depicted below.
The weighted average projected CPRs on the Contracts shown below present
Green Tree management's best estimate of future principal prepayments and
defaults on the Contracts, based on historical CPR experience as described
above. It is not likely that the Contracts will prepay at any constant CPR to
maturity or that all Contracts will prepay at the same rate.
19
<PAGE>
WEIGHTED AVERAGE PROJECTED PREPAYMENT RATES (CPR)
INCREASING INTEREST RATE SCENARIOS
WEIGHTED AVERAGE PROJECTED PREPAYMENT RATES (CPR)
DECREASING INTEREST RATE SCENARIOS
[TO BE SUPPLIED]
20
<PAGE>
GREEN TREE MANUFACTURED HOUSING CONTRACT PREPAYMENT INFORMATION(1)
<TABLE>
<CAPTION>
PERCENTAGE WEIGHTED WEIGHTED
BOND BOND POOL AVERAGE AVERAGE
VALUE VALUE PRINCIPAL WAM INVESTOR INTEREST
TRANSACTION AMOUNT(2) AMOUNT BALANCE (MONTHS) WAC RATE(%) MARGIN(%)(3)
- ----------- ------------ ---------- -------------- -------- ----- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
GTFC 1994-5..... $ % $ % % %
GTFC 1994-6.....
GTFC 1994-7.....
GTFC 1994-8.....
GTFC 1995-1.....
GTFC 1995-2.....
GTFC 1995-3.....
GTFC 1995-4.....
GTFC 1995-5.....
------------ ------ --------------
Total........... $ 100.00% $
============ ====== ==============
Weighted Average. % % %
=== ===== ==== ====
<CAPTION>
LOAN-BY-LOAN PREPAYMENT PROJECTIONS
(CPR%)(4)
---------------------------------------
TRANSACTION 6 MTHS 12 MTHS 36 MTHS 60 MTHS 120 MTHS
- ----------- ------ ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
GTFC 1994-5..... % % % % %
GTFC 1994-6.....
GTFC 1994-7.....
GTFC 1994-8.....
GTFC 1995-1.....
GTFC 1995-2.....
GTFC 1995-3.....
GTFC 1995-4.....
GTFC 1995-5.....
Total...........
Weighted Average.
</TABLE>
- ----
(1)As of the Cut-off Date.
(2)Represents the present value of the net interest margin cash flow for each
transaction, after servicing fees, projected losses and expenses.
(3)Before servicing fees, losses and expenses.
(4) Projected prepayment CPRs have been calculated and stated on a loan-by-
loan basis, for each pool, taking into account the actual WAC and
amortization schedule for each loan in the pool.
BOND VALUE SEGMENTATION(1)
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED BOND VALUE SEGMENTATION(3)
POOL AVERAGE AVERAGE --------------------------------------------
PRINCIPAL WAM INVESTOR INTEREST GUARANTEE
TRANSACTION BALANCE (MONTHS) WAC RATE(%) MARGIN(%)(2) FEE RESIDUAL ASSETS TOTAL BOND VALUE
- ----------- -------------- -------- ----- -------- ------------ ----------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GTFC 1994-5............ $ % % % $ $ $
GTFC 1994-6............
GTFC 1994-7............
GTFC 1994-8............
GTFC 1995-1............
GTFC 1995-2............
GTFC 1995-3............
GTFC 1995-4............
GTFC 1995-5............
-------------- ----------- ----------- ------------
Total.................. $ $ $ $
============== =========== =========== ============
Weighted Average....... % % %
=== ===== === ===
</TABLE>
- ----
(1)As of the Cut-off Date.
(2)Before servicing fees, losses and expenses.
(3)Represents the present value of the Guarantee Fee, Residual Asset and net
interest margin cash flow for each transaction, after servicing fees,
projected losses and expenses.
21
<PAGE>
MANUFACTURED HOUSING PROJECTED DEFAULT ASSUMPTION
The following graph presents Green Tree management's best estimate of the
weighted average conditional default rate (CDR) of all the Contracts for each
month beginning in June 1995. The CDR for a Contract as of any month is the
estimated probability that the Contract, having reached that age, will default
sometime during the subsequent month. This projection was derived through a
loan-by-loan analysis employing detailed statistical processes, based on the
default experience of Green Tree's actual portfolio of manufactured housing
contracts originated between 1976 and . Each manufactured housing
contract in Green Tree's portfolio that defaulted was analyzed according to a
number of variables, including loan-to-value ratio at origination; original
term to maturity; year of origination; whether the financed manufactured home
was new or used at the date of origination; whether the contract was
conventional; the seasoning of the contract; the prevailing rate of
unemployment in that state; and a number of other factors. Based on this
historical default analysis of contracts with identical loan attributes, each
Contract was assigned a CDR for each month of its projected remaining life. The
individual CDRs for each Contract were then aggregated into a weighted average
for each month.
The following graph presents Green Tree management's best estimate of
weighted average projected defaults on the Contracts. There can be no assurance
that the actual default experience of the Contracts will not be substantially
worse than this estimate, and it is likely that the default experience of the
aggregate pool of Contracts in any given month will differ from the estimate
provided here.
WEIGHTED AVERAGE PROJECTED DEFAULT RATES
[TO BE SUPPLIED]
22
<PAGE>
MANUFACTURED HOUSING PROJECTED RECOVERY ASSUMPTION
The following graph presents Green Tree management's best estimate of the
weighted average recovery rate (expressed as a percentage of the estimated
defaults) of all the Contracts following a default for each month beginning in
1995. This projection was derived through a loan-by-loan analysis
employing detailed statistical processes, based on Green Tree's actual recovery
experience on its portfolio of manufactured housing contracts originated
between 1976 and . Each manufactured housing contract in Green Tree's
portfolio that defaulted was analyzed according to a number of variables,
including the seasoning of the contract; whether or not the contract was
conventional; the type of manufactured home financed (new or used, single- or
multi-wide); the location of the manufactured home; and a number of other
variables. Each Contract was assigned an estimated recovery rate for each month
of its life based on the historical recovery experience of contracts with
identical loan attributes. The individual recovery rates for each Contract were
then aggregated into a weighted average for each month.
The following graph presents Green Tree management's best estimate of
weighted average projected recovery rates on Contracts following a default.
There can be no assurance that the actual recovery rate experience of the
Contracts will not be substantially worse than this estimate, and it is likely
that the recovery rate experience of the aggregate pool of Contracts in any
given month will differ from the estimate provided here.
WEIGHTED AVERAGE PROJECTED RECOVERY RATES
[TO BE SUPPLIED]
23
<PAGE>
CERTIFICATE PRINCIPAL AMORTIZATION TABLES
The following tables present the weighted average life of the Certificates
under a range of assumed rates of default on the Contracts and a range of
assumed prevailing interest rates (expressed in terms of Green Tree's current
average Contract Rate, the interest rate on new manufactured housing contract
originations by Green Tree). The following information is given solely to
illustrate the effect of different assumed rates of default and different
prevailing interest rates on the projected weighted average life of the
Certificates under the numerous assumptions described in this Prospectus and is
not a prediction of the weighted average life that might actually be
experienced on the Certificates.
The weighted average lives of the Certificates in the following tables, and
the graphs included in Appendix I, were determined using the following
assumptions and specifications:
(i) no delinquencies are experienced on the Contracts;
(ii) the Contracts have the characteristics described in Appendix I;
(iii) each Contract's cash flow is applied under the related Securitized
Pool in the manner described in Appendix I and the documents relating to
such Securitized Pool and other features described therein and in "The
Trust Property";
(iv) all Contract balances, security balances and any related collateral
balances were calculated as of June 1, 1995 (or July 1, 1995, with respect
to the Contracts in the 1995-5 Securitized Pool);
(v) Green Tree continues to service the Contracts and to perform all its
obligations under the documents relating to each Securitized Pool;
(vi) any cash held by the Securitized Pools is reinvested at 3% per
annum;
(vii) the Certificates bear an Interest Rate of %;
(viii) the original principal amount of the Certificates is $ ;
(ix) Green Tree does not exercise its right to repurchase any of the
Contracts held in the Securitized Pools, as described under "The Trust
Property--Inside Refinancing Payments";
(x) the Subordinated Certificateholders do not exercise their right to
cause the Trust to redeem the Certificates;
(xi) the Certificates are issued on June 15, 1995, and distributions are
made on the Certificates on the 15th of each month, commencing July 15,
1995;
(xii) there is no delay between a default on a Contract and final
liquidation of the Contract; and
(xiii) the recovery on each Contract following a default is equal to 100%
of the Manufactured Housing Projected Recovery Assumption.
The first three tables presented below assume that 50% of all prepayments due
to refinancing of the Contracts are refinanced by Green Tree (with
corresponding inside refinancing payments made by Green Tree). The next three
tables below assume that 25% of all prepayments due to refinancing of the
Contracts are refinanced by Green Tree (with corresponding inside refinancing
payments made by Green Tree).
24
<PAGE>
CERTIFICATE PRINCIPAL AMORTIZATION TABLE (1)
(WITH 50% INSIDE REFINANCING PAYMENTS (2))
<TABLE>
<CAPTION>
100% OF DEFAULT ASSUMPTION 125% OF DEFAULT ASSUMPTION 150% OF DEFAULT ASSUMPTION
--------------------------------- --------------------------------- ---------------------------------
INTEREST RATE SHIFTS (3) INTEREST RATE SHIFTS (3) INTEREST RATE SHIFTS (3)
--------------------------------- --------------------------------- ---------------------------------
-300 -200 -100 0 +100 +200 +300 -300 -200 -100 0 +100 +200 +300 -300 -200 -100 0 +100 +200 +300
---- ---- ---- --- ---- ---- ---- ---- ---- ---- --- ---- ---- ---- ---- ---- ---- --- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AT JUNE 15,
Initial Percent-
age.............
1996............
1997............
1998............
1999............
2000............
2001............
2002............
2003............
Projected
CPR (4).........
Weighted Average
Life (in
years) (5)......
Expected Matu-
rity Date:
</TABLE>
- ----
(1) Stated as a percent of the original Certificate principal amount.
(2) Assumes Green Tree refinances 50% of all refinanced loans. See "The Trust
Property--Inside Refinancing Payments."
(3) The Interest Rate Shifts represent shifts in Green Tree's average Contract
Rate. Green Tree's current average Contract Rate is equal to %. Green
Tree believes that, as an approximation for future movements in its
average Contract Rate, investors can use as a reference changes in the 7-
year Treasury Note rate.
(4) The Projected CPR is the 120-month weighted average constant prepayment
rate that would exist for the corresponding Interest Rate shift in Green
Tree's average Contract Rate, rounded to the nearest whole number. A -100
bps shift is equal to a 100 basis point decrease in Green Tree's average
Contract Rate, which would indicate that current obligors could refinance
if they chose to do so at 100 basis points below where they could have
previously refinanced. Therefore the 100 basis point decrease in Contract
Rate implies a higher incentive to refinance.
(5) The Weighted Average Life of a Certificate is determined by (i)
multiplying the amount of each principal payment on such Certificate on
each Distribution Date by the number of years from the date of issuance of
such Certificate to such Distribution Date, (ii) adding the results, and
(iii) dividing the sum by the initial principal amount of such
Certificate.
25
<PAGE>
CERTIFICATE PRINCIPAL AMORTIZATION TABLE (1) (WITH 25% INSIDE REFINANCING
PAYMENTS (2))
<TABLE>
<CAPTION>
100% OF DEFAULT ASSUMPTION 125% OF DEFAULT ASSUMPTION 150% OF DEFAULT ASSUMPTION
--------------------------------- --------------------------------- ---------------------------------
INTEREST RATE SHIFTS (3) INTEREST RATE SHIFTS (3) INTEREST RATE SHIFTS (3)
--------------------------------- --------------------------------- ---------------------------------
-300 -200 -100 0 +100 +200 +300 -300 -200 -100 0 +100 +200 +300 -300 -200 -100 0 +100 +200 +300
---- ---- ---- --- ---- ---- ---- ---- ---- ---- --- ---- ---- ---- ---- ---- ---- --- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AT JUNE 15,
Initial Percent-
age.............
1996............
1997............
1998............
1999............
2000............
2001............
2002............
2003............
2004............
2005............
2006............
2007............
2008............
2009............
Projected
CPR (4).........
Weighted Average
Life (in
years) (5)......
Expected Matu-
rity Date:
</TABLE>
- ----
* Represents less than 0.5%
(1) Stated as a percent of the original Certificate principal amount.
(2) Assumes Green Tree refinances 25% of all refinanced loans. See "The Trust
Property--Inside Refinancing Payments."
(3) The Interest Rate Shifts represent shifts in Green Tree's average Contract
Rate. Green Tree's current average Contract Rate is equal to %. Green
Tree believes that, as an approximation for future movements in its
average Contract Rate, investors can use as a reference changes in the 7-
year Treasury Note rate.
(4) The Projected CPR is the 120-month weighted average constant prepayment
rate that would exist for the corresponding Interest Rate shift in Green
Tree's average Contract Rate, rounded to the nearest whole number. A -100
bps shift is equal to a 100 basis point decrease in Green Tree's average
Contract Rate, which would indicate that current obligors could refinance
if they chose to do so at 100 basis points below where they could have
previously refinanced. Therefore the 100 basis point decrease in Contract
Rate implies a higher incentive to refinance.
(5) The Weighted Average Life of a Certificate is determined by (i)
multiplying the amount of each principal payment on such Certificate on
each Distribution Date by the number of years from the date of issuance of
such Certificate to such Distribution Date, (ii) adding the results, and
(iii) dividing the sum by the initial principal amount of such
Certificate.
26
<PAGE>
DESCRIPTION OF THE CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the terms of the Trust Agreement,
a form of which has been filed as an exhibit to the Registration Statement. A
copy of the Trust Agreement will be filed with the Commission following the
issuance of the Certificates. Whenever provisions of the Trust Agreement are
referred to, such provisions are incorporated herein by reference.
DISTRIBUTIONS
Distributions of interest and principal to Certificateholders will be made on
each Distribution Date in an amount equal to their respective Percentage
Interests multiplied by the Certificateholder's Interest Distributable Amount
and the Certificateholders' Principal Distributable Amount, if any.
Distributions will be applied first to the payment of interest and then to the
payment of principal from the Amount Available (as defined below). In the event
that the Amount Available in the Certificate Account is not sufficient to make
a full distribution to the Certificateholders of the Certificateholders'
Interest Distributable Amount, the amount of the deficiency will be carried
forward as an amount that the Certificateholders are entitled to receive on the
next Distribution Date. Any amount carried forward will, to the extent legally
permissible, bear interest at the Interest Rate.
Each distribution with respect to a Book-Entry Certificate will be paid to
DTC, which will credit the amount of such distribution to the accounts of its
Participants in accordance with its normal procedures. Each Participant will be
responsible for disclosing such distribution to the Certificate Owners that it
represents and to each indirect participating brokerage firm (a "brokerage
firm" or "indirect participating firm") for which it acts as agent. Each
brokerage firm will be responsible for disbursing funds to the Certificate
Owners that it represents. All such credits and disbursements with respect to a
Book-Entry Certificate are to be made by DTC and the Participants in accordance
with DTC's rules.
Green Tree, as servicer, will furnish to the Trustee, and the Trustee will
send with each distribution on a Distribution Date to each Certificateholder, a
statement setting forth, among other things, (i) the amount of such
distribution allocable to interest and (ii) the amount of such distribution
allocable to principal. Such amounts will be expressed as a dollar amount per
$1,000 of the original principal amount of the Certificates.
DISTRIBUTIONS OF INTEREST INCOME
On each Distribution Date, commencing August 15, 1995, the Certificateholders
will be entitled to distributions in an amount equal to the amount of interest
accrued on the outstanding principal amount of the Certificates at the Interest
Rate (the "Certificateholders' Interest Distributable Amount"). Interest
distributable on a Distribution Date will accrue from the most recent
Distribution Date on which interest distributions have been made to but
excluding such Distribution Date and will be calculated on the basis of a 360-
day year consisting of twelve 30-day months. Interest distributions due for any
Distribution Date but not distributed on such Distribution Date will be due on
the next Distribution Date together with interest on such amount at the
Interest Rate (to the extent legally permissible). Interest distributions with
respect to the Certificates will be made from the Amount Available in the
Certificate Account before the payment of accrued and unpaid trustee's fees and
other administrative fees of the Trust. Finance I and Finance II will receive a
distribution of interest on August 15, 1995 equal to the interest accrued on
the initial principal amount of the Certificates at the Interest Rate from June
15, 1995 to the Closing Date. Certificateholders of record on August 14, 1995
will receive a distribution of interest on August 15, 1995 equal to the
interest accrued on the initial principal amount of the Certificates at the
Interest Rate from the Closing Date to August 15, 1995.
DISTRIBUTIONS OF PRINCIPAL PAYMENTS
Certificateholders will be entitled to receive, as payments of principal, the
Certificateholders' Principal Distributable Amount to the extent of the
Remaining Amount Available (as defined below) in the Certificate Account on
each Distribution Date. Distributions with respect to principal payments will
be made from the
27
<PAGE>
Amount Available in the Certificate Account after payment of the
Certificateholders' Interest Distributable Amount and any accrued and unpaid
Trustee's fees and other administrative fees of the Trust which Green Tree or
the Subordinated Certificateholders were obligated to pay but failed to pay
(the "Remaining Amount Available"). The distribution of principal on August 15,
1995 will represent collections on the Trust Property for July 15 and August
15, 1995.
REPORTS TO CERTIFICATEHOLDERS
Green Tree will furnish to the Trustee, and the Trustee will include with
each distribution to a Certificateholder, a statement in respect of the related
Distribution Date setting forth, among other things:
(a) the Certificateholders' Interest Distributable Amount;
(b) the Certificateholders' Principal Distributable Amount;
(c) the outstanding principal amount of the Certificates, after giving
effect to all payments reported under (b) above on such date;
(d) the present value of the projected remaining aggregate cashflow of
the Trust Property;
(e) the weighted average CPR of the Contracts for the prior month;
(f) the weighted average conditional default rate of the Contracts for
the prior month;
(g) the annualized net loss percentage of the Contracts for the prior
month; and
(h) information regarding delinquent Contracts as of the prior month.
Each amount set forth pursuant to subclauses (a) and (b) will be expressed as a
dollar amount per $1,000 of the original principal amount of the Certificates.
In addition, within a reasonable period of time after the end of each
calendar year, Green Tree, as servicer, will furnish a report to each
Certificateholder of record at any time during such calendar year as to
aggregate amounts reported pursuant to (a) and (b) above for such calendar
year.
For the purposes hereof, the following terms shall have the following
meanings:
"Amount Available" means, with respect to any Distribution Date, the sum of
the amounts contained in the Certificate Account for any Monthly Period.
"Certificateholders' Interest Distributable Amount" means, with respect to
any Distribution Date (other than the first Distribution Date), one month's
interest at the Interest Rate on the outstanding principal amount of the
Certificates (computed on the basis of a 360-day year of twelve 30-day months),
plus any accrued and unpaid interest with respect to a prior Distribution Date
together (to the extent legally permissible) with interest thereon at the
Interest Rate.
"Certificateholders' Principal Distributable Amount" means, with respect to
any Distribution Date, the Remaining Amount Available for such Distribution
Date; provided, however, that the Certificateholders' Principal Distributable
Amount shall not exceed the outstanding principal amount of the Certificates.
"Remaining Amount Available" means, with respect to any Distribution Date,
the amount remaining in the Certificate Account after payment of the
Certificateholders' Interest Distributable Amount and payment to the Trustee of
any accrued and unpaid trustee fees, to the extent not paid by Green Tree or
the Subordinated Certificateholders.
LISTS OF CERTIFICATEHOLDERS
At such time, if any, as Definitive Certificates (as defined below) have been
issued, the Trustee will, upon written request by three or more
Certificateholders or one or more holders of Certificates evidencing not less
28
<PAGE>
than 25% of the outstanding principal balance of the Certificates, within five
Business Days after provision to the Trustee of a statement of the applicants'
desire to communicate with other Certificateholders about their rights under
the Trust Agreement or the Certificates and a copy of the communication that
the applicants propose to transmit, afford such Certificateholders access
during business hours to the current list of Certificateholders for purposes of
communicating with other Certificateholders with respect to their rights under
the Trust Agreement. The Trust Agreement will not provide for holding any
annual or other meetings of Certificateholders.
OPTIONAL PREPAYMENT
If the Subordinated Certificateholders exercise their option to prepay the
Certificates when the aggregate outstanding principal amount of the
Certificates declines to 10% or less of the original principal amount of the
Certificates, Certificateholders will receive an amount in respect of the
Certificates equal to the aggregate outstanding principal amount of the
Certificates together with all accrued and unpaid interest, which distribution
will effect early retirement of the Certificates. See "Description of the Trust
Agreement--Termination."
RESTRICTIONS ON TRANSFER
The Certificates will be subject to the following restrictions on transfer,
and each Certificate will contain a legend describing such restrictions.
The Certificates may not be acquired by a "disqualified organization" (as
defined below). By acceptance of a Certificate, each purchaser will be deemed
to represent that it is not a disqualified organization. Accordingly, a
purchase by a disqualified organization shall be void and of no effect. A
"disqualified organization" means (i) the United States, any State or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of the foregoing (not including instrumentalities
described in Section 168(h)(2)(D) of the Code or the Federal Home Loan Mortgage
Corporation), (ii) any organization (other than a cooperative described in
Section 521 of the Code) that is exempt from federal income tax, unless it is
subject to the tax imposed by Section 511 of the Code or (iii) any organization
described in Section 1381(a)(2)(C) of the Code.
A pass-through entity may acquire Certificates. Such investors should be
aware, however, that if the Internal Revenue Service were successfully to
assert that the Certificates did not represent debt for federal income tax
purposes, a tax may be imposed on a pass-through entity which has (i) a
disqualified organization (as defined above) as a record holder of an interest
therein and (ii) excess inclusion income, as defined in the REMIC provisions of
the Code, as a result of its investment in the Certificates. For these
purposes, a "pass-through entity" means any regulated investment company, real
estate investment trust, trust, partnership or certain other entities described
in Section 860E(e)(6) of the Code. In addition, a person holding an interest in
a pass-through entity as a nominee for another person will, with respect to
such interest, be treated as a pass-through entity. Pass-through entities
considering an investment in Certificates are urged to consult with their own
tax advisor with respect to these matters.
The Trust Agreement will provide that any attempted or purported transfer in
violation of these transfer restrictions will be null and void and will vest no
rights in any purported transferee.
REGISTRATION OF THE CERTIFICATES
The Certificates will initially be registered in the name of Cede & Co., the
nominee of DTC. DTC is a limited-purpose trust company organized under the laws
of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
1934 Act. DTC accepts securities for deposit from its participating
organizations ("Participants") and facilitates the clearance and settlement of
securities transactions between Participants in such securities through
electronic book-entry changes in accounts of Participants, thereby eliminating
the need for physical movement of certificates. Participants include securities
brokers and dealers, banks and trust companies and clearing corporations and
29
<PAGE>
may include certain other organizations. Indirect access to the DTC system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly ("indirect participants").
Certificate Owners who are not Participants but desire to purchase, sell or
otherwise transfer ownership of the Certificates may do so only through
Participants (unless and until Definitive Certificates, as defined below, are
issued). In addition, Certificate Owners will receive all distributions of
principal of, and interest on, the Certificates from the Trustee through DTC
and Participants. Certificate Owners will not receive or be entitled to receive
certificates representing their respective interests in the Certificates,
except under the limited circumstances described below.
Unless and until Definitive Certificates (as defined below) are issued, it is
anticipated that the only "Certificateholder" of the Certificates will be Cede
& Co., as nominee of DTC. Certificate Owners will not be recognized by the
Trustee as Certificateholders as that term is used in the Trust Agreement.
Certificate Owners are only permitted to exercise the rights of
Certificateholders indirectly through Participants and DTC.
While Certificates are outstanding (except under the circumstances described
below), under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry transfers
among Participants on whose behalf it acts with respect to the Certificates and
is required to receive and transmit distributions of principal of, and interest
on, the Certificates. Participants with whom Certificate Owners have accounts
with respect to Certificates are similarly required to make book-entry
transfers and receive and transmit such distributions on behalf of their
respective Certificate Owners. Accordingly, although Certificate Owners will
not possess certificates, the Rules provide a mechanism by which Certificate
Owners will receive distributions and will be able to transfer their interests.
Certificates will be issued in registered form to Certificate Owners, or
their nominees, rather than to DTC (such Certificates being referred to herein
as "Definitive Certificates"), only if (i) DTC, the Administrator or Finance I
advise the Trustee in writing that DTC is no longer willing or able to
discharge properly its responsibilities as nominee and depository with respect
to the Certificates and the Administrator Finance I is unable to locate a
qualified successor, (ii) Finance I at its sole option advises the Trustee in
writing that it elects to terminate the book-entry system through DTC or (iii)
if an Event of Default shall have occurred and be continuing, Certificate
Owners having a beneficial interest in the Certificates at least equal to a
majority of the aggregate outstanding principal amount of the Certificates
advise the Trustee, through DTC, that continuation of a book-entry system is no
longer in their best interests. Upon issuance of Definitive Certificates to
Certificate Owners, such Certificates will be transferable directly (and not
exclusively on a book-entry basis) and registered holders will deal directly
with the Trustee with respect to transfers, notices and distributions.
DTC has advised Finance I that, unless and until Definitive Certificates are
issued, DTC will take any action permitted to be taken by a Certificateholder
under the Trust Agreement only at the direction of one or more Participants to
whose DTC accounts the Certificates are credited. DTC has advised Finance I
that DTC will take such action with respect to any fractional interest of the
Certificates only at the direction of and on behalf of such Participants
beneficially owning a corresponding fractional interest of the Certificates.
DTC may take actions, at the direction of the related Participants, with
respect to some Certificates which conflict with actions taken with respect to
other Certificates.
Issuance of Certificates in book-entry form rather than as physical
certificates may adversely affect the liquidity of the Certificates in the
secondary market and the ability of Certificate Owners to pledge them. In
addition, since distributions on the Certificates will be made by the Trustee
to DTC and DTC will credit such distributions to the accounts of its
Participants, with the Participants further crediting such distributions to the
accounts of indirect participants or Certificate Owners, Certificate Owners may
experience delays in the receipt of such distributions.
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DESCRIPTION OF THE TRUST DOCUMENTS
The following summary describes certain terms of the Finance I Note, the
Trust Agreement, the Transfer Agreement and the Assignments (together, the
"Trust Documents"). Forms of the Trust Documents have been filed as exhibits to
the Registration Statement. Copies of the Trust Documents will be filed with
the Commission following the issuance of the Certificates.
CERTIFICATE ACCOUNT
Pursuant to the Trust Agreement, the Trustee will establish and maintain an
account, in the name of the Trust, in which amounts available for distribution
to Certificateholders will be deposited and from which all distributions to
Certificateholders will be made (the "Certificate Account").
EVENTS OF DEFAULT
Pursuant to the Trust Agreement, "Events of Default" will consist of (i) any
failure in the payment of the Certificateholders' Interest Distributable Amount
with respect to a Distribution Date, which failure has continued for a period
of 6 months after such Distribution Date or (ii) any failure to pay the full
principal amount of the Certificates on or before the Distribution Date
occurring in July 2005.
Pursuant to the Finance I Note, "Events of Default" will consist of (i) any
failure to make timely installments of interest due thereunder, which failure
has continued for a period of 6 months after such Distribution Date, or (ii)
any failure to pay the full principal amount of the Finance I Note on or before
the Distribution Date occurring in July 2005.
If an Event of Default with respect to the Certificates occurs and is
continuing, the Trustee or Certificate Owners beneficially owning at least 25%
in aggregate outstanding principal amount of the Certificates may declare the
entire principal amount of the Certificates to be due and payable immediately.
Such declaration may, under certain circumstances, be rescinded by a
Certificate Majority (as defined in the Trust Agreement).
If the Certificates have been declared due and payable following an Event of
Default, the Trustee may liquidate all or any portion of the Trust Property, or
elect to maintain possession of the Trust Property and continue to apply
collections from the Trust Property as if there had been no declaration of
acceleration. The Trustee will be prohibited from selling the Trust Property
following an Event of Default, unless (i) the holders of all the outstanding
Certificates consent to such sale; or (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on the
outstanding Certificates at the time of such sale; or (iii) the Trustee
determines that the collections on the Trust Property will not be sufficient on
an ongoing basis to make all payments of interest on the Certificates as such
payments become due and to pay the outstanding principal amount of the
Certificates at maturity, and the Trustee obtains the consent of the holders of
66 2/3% of the aggregate outstanding amount of the Certificates.
The Trustee and the Certificate Owners will have similar rights to liquidate
the Guarantee Fees following an Event of Default under the Finance I Note.
AMENDMENT
The Trust Agreement may be amended by the Subordinated Certificateholders and
the Trustee but without the consent of any of the Certificateholders, to cure
any ambiguity or to correct or supplement any provision therein, provided that
such action will not, in the opinion of counsel (which may be internal counsel
to the Subordinated Certificateholders) materially and adversely affect the
interests of any Certificateholder. The Trust Agreement may also be amended by
the Subordinated Certificateholders and the Trustee and a Certificate Majority
for the purpose of adding any provisions to or changing in any manner or
eliminating
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any of the provisions of the Trust Agreement or of modifying, in any manner,
the rights of the Certificateholders. No such amendment may (i) increase or
reduce in any manner the amount of, or accelerate or delay the timing of, or
distributions that are required to be made on any Certificate or the Interest
Rate or (ii) reduce the percentage of the aggregate outstanding principal
amount of the Certificates required to consent to any such amendment, without
the consent of the holders of all Certificates then outstanding.
The Transfer Agreement may be amended by all of the parties thereto; provided
that no amendment may materially and adversely affect the interests of the
Certificateholders.
TERMINATION
The Trust and the respective obligations of the Subordinated
Certificateholders and the Trustee pursuant to the related Trust Documents will
terminate upon the latest of (i) the Distribution Date immediately following
the maturity of the Finance I Note or the retirement of the last Residual Asset
or other liquidation of the last item of Trust Property, (ii) the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
related Trust Documents, (iii) following the payment in full of all principal
and accrued interest on the Certificates, by vote of all the Subordinated
Certificateholders, or (iv) the occurrence of a Liquidation Event (as described
below).
In order to avoid excessive administrative expense, the Subordinated
Certificateholders will be permitted, at their option, to cause the Trust to
redeem the Certificates on any Distribution Date in which the aggregate
outstanding principal amount of the Certificates is equal to or less than 10%
of the original principal amount of the Certificates at a price equal to the
unpaid principal amount of the Certificates plus all accrued and unpaid
interest thereon.
In the event that a Dissolution Event (as defined in the Trust Agreement)
shall occur with respect to one but not both Subordinated Certificateholders,
the remaining Subordinated Certificateholder shall, within 90 days of such
Dissolution Event, (i) select a successor Subordinated Certificateholder and
(ii) deliver to the Trustee an opinion of counsel to the effect that the Trust
will not be an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes. In the event that (i) the
remaining Subordinated Certificateholder is unable to locate a successor
Subordinated Certificateholder or to obtain such an opinion or (ii) a
Dissolution Event occurs with respect to both Subordinated Certificateholders
(either such event being referred to as a "Liquidation Event"), the Trust will
terminate.
The Trustee will give written notice of the final distribution with respect
to the Certificates to each Certificateholder of record. The final distribution
to any Certificateholder will be made only upon surrender and cancellation of
such holder's Certificate at the office or agency of the Trustee with respect
to Certificates specified in the notice of termination. In the event that all
Certificateholders do not surrender their Certificates for cancellation within
6 months after the date specified in the notice of termination, the Trustee
shall give a second written notice to the remaining Certificateholders. If
within one year after the second written notice all Certificates have not been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates. Any funds
remaining in the Trust, after the Trustee has taken such measures to locate any
remaining Certificateholders and such measures have failed, will be distributed
to The United Way and the Certificateholders, by acceptance of their
Certificates, will waive any rights with respect to such funds.
THE TRUSTEE
The Trustee, in its individual capacity or otherwise, and any of its
affiliates may hold Certificates in their own names or as pledgee. In addition,
for the purpose of meeting the legal requirements of certain jurisdictions, the
Trustee and the Administrator, acting jointly, with the consent of Finance I,
shall have the power to appoint co-trustees or separate trustees of all or any
part of the Trust. In the event of such appointment, all rights, powers, duties
and obligations conferred or imposed upon the Trustee by the Trust Documents
will be conferred or imposed upon the Trustee and such separate trustee or co-
trustee jointly, or, in any jurisdiction where the Trustee is incompetent or
unqualified to perform certain acts, singly upon such separate trustee or co-
trustee who shall exercise and perform such rights, powers, duties and
obligations solely at the direction of the Trustee.
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The Trustee may resign at any time, in which event the Subordinated
Certificateholders will be obligated to appoint a successor trustee. The
Subordinated Certificateholders may also remove the Trustee, if the Trustee
ceases to be eligible to serve, becomes legally unable to act, is adjudged
insolvent or is placed in receivership or similar proceedings. In such
circumstances, the Subordinated Certificateholders will be obligated to
appoint a successor trustee. Any resignation or removal of the Trustee and
appointment of a successor trustee will not become effective until acceptance
of the appointment by the successor trustee.
DUTIES OF THE TRUSTEE
The Trustee will make no representation as to the validity or sufficiency of
any Trust Document, the Certificates (other than its execution of the
Certificates) or any related documents, and will not be accountable for the
use or application by Green Tree of any funds in respect of the Certificates
prior to deposit in the Certificate Account.
The Trustee will be required to perform only those duties specifically
required of it under the Trust Agreement. Generally, those duties will be
limited to the receipt of the various certificates, reports or other
instruments required to be furnished by Green Tree to the Trustee under the
Trust Agreement, in which case it will only be required to examine such
certificates, reports or instruments to determine whether they conform
substantially to the requirements of the Trust Agreement.
The Trustee will be under no obligation to exercise any of the rights or
powers vested in it by the Trust Agreement or to institute, conduct, or defend
any litigation thereunder or in relation thereto at the request, order or
direction of any Subordinated Certificateholders, unless such Subordinated
Certificateholders have offered the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby. No Certificate Owner will have any right under the Trust Documents to
institute any proceeding with respect to such Trust Documents, unless such
Certificate Owner has given the Trustee written notice of default and unless
Certificate Owners beneficially owning not less than 25% of the aggregate
principal balance of the Certificates then outstanding have made written
request to the Trustee to institute such proceeding in its own name as Trustee
thereunder and have offered to the Trustee reasonable indemnity, and the
Trustee for 30 days after the receipt of such notice, request and offer to
indemnify has neglected or refused to institute any such proceedings.
USE OF PROCEEDS
Approximately $ of the net proceeds of the sale of the Certificates
will be loaned to Finance I in return for the Finance I Note. The remaining
net proceeds of the sale of the Certificates will be paid to Finance I and
Finance II, as the holders of the Subordinated Certificates. Finance I and
Finance II will in turn remit substantially all such proceeds to Green Tree in
the form of a dividend. Green Tree will use such funds for general corporate
purposes, including the origination of additional manufactured housing
contracts, the costs of carrying such contracts until sold and other expenses
of pooling and selling such contracts, and to fund Green Tree's future growth.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain federal income tax
consequences relating to the purchase, ownership, and disposition of the
Certificates. The discussion is based upon the current provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury
Regulations promulgated thereunder and judicial or ruling authority, all of
which are subject to change, which change may be retroactive. The discussion
does not purport to deal with federal income tax consequences applicable to
all categories of investors, some of which may be subject to special rules.
Moreover, there are no cases or Internal Revenue Service (the "Service")
rulings on similar transactions involving the issuance of interests with terms
similar to those of the Certificates. As a result, the Service may disagree
with all or a part of the discussion below. INVESTORS SHOULD CONSULT THEIR OWN
TAX ADVISORS TO DETERMINE THE FEDERAL, STATE, LOCAL, AND ANY OTHER TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF CERTIFICATES.
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The Trust will be provided with an opinion of Dorsey & Whitney P.L.L.P.,
counsel to Green Tree, regarding certain federal income tax matters discussed
below. Such an opinion, however, is not binding on the Service or the courts.
No ruling on any of the issues discussed below will be sought from the Service.
TAX CHARACTERIZATION OF THE TRUST
The Subordinated Certificateholders and the Trustee will agree to treat the
Trust as a partnership for federal income tax purposes. Dorsey & Whitney
P.L.L.P. will deliver its opinion that the Trust will not be an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes, with the result that the Trust itself will not be subject to federal
income tax. This opinion will be based on the assumption that the terms of the
Trust Agreement and related documents will be complied with, and on counsel's
conclusions that (1) the Trust will not have certain characteristics necessary
for a business trust to be classified as an association taxable as a
corporation and (2) the nature of the interests in and the income of the Trust,
including the status of the Finance I Note as debt for federal income tax
purposes, will exempt it from the rule that certain taxable mortgage pools or
publicly traded partnerships are taxable as corporations.
If the Trust were taxable as a corporation for federal income tax purposes,
the Trust would be subject to corporate income tax on its taxable income. Any
such corporate income tax could materially reduce cash available to make
payments on the Certificates.
TAX CONSEQUENCES TO HOLDERS OF CERTIFICATES
Treatment of Certificates as Indebtedness. The Trustee and the Subordinated
Certificateholders will agree, and the Certificateholders will agree by their
purchase of Certificates, to treat the Certificates as debt for federal income
tax purposes. Although there are no regulations, published rulings or judicial
decisions involving the characterization for federal income tax purposes of
interests with the same terms as the Certificates, and although the result is
not free from doubt in view of the treatment of this transaction by Green Tree
for purposes of its financial statements prepared in accordance with generally
accepted accounting principles and certain other features of the Certificates,
on balance, in the opinion of Dorsey & Whitney P.L.L.P. the Certificates will
more likely than not be classified as debt for federal income tax purposes. The
discussion below assumes this characterization of the Certificates is correct.
Interest Income on the Certificates. As a general rule, interest paid or
accrued on the Certificates, as well as market discount and original issue
discount, if any, will be treated as ordinary income to the holders thereof. A
Certificateholder using the accrual method of accounting for federal income tax
purposes is required to include interest paid or accrued on the Certificates in
ordinary income as such interest accrues, while a Certificateholder using the
cash receipts and disbursements method of accounting for federal income tax
purposes must include such interest in ordinary income when payments are
received (or made available for receipt) by such holder. It is anticipated that
the Certificates will not be issued with "original issue discount" ("OID")
within the meaning of Section 1273 of the Code, and that the Trust will not
take any OID deduction with respect thereto.
Market Discount. The Certificates, whether or not issued with original issue
discount, will be subject to the "market discount rules" of section 1276 of the
Code. In general, these rules provide that if the holder of a Certificate
purchases it at a market discount (i.e., a discount from its original issue
price plus any accrued original issue discount) that exceeds a de minimis
amount specified in the Code, and thereafter recognizes gain upon a
disposition, the lesser of (i) such gain or (ii) the accrued market discount
will be taxed as ordinary interest income. Generally, the accrued market
discount will be the total market discount on the Certificate multiplied by a
fraction, the numerator of which is the number of days the holder held the
Certificate and the denominator of which is the number of days from the date
the holder acquired the Certificate until its maturity date. The holder may
elect, however, to determine accrued market discount under the constant-yield
method.
Limitations imposed by the Code which are intended to match deductions with
the taxation of income may defer deductions for interest on indebtedness
incurred or continued, or short-sale expenses incurred, to
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purchase or carry a Certificate with accrued market discount. A
Certificateholder may elect to include market discount in gross income as it
accrues and, if such Certificateholder makes such an election, is exempt from
this rule. The adjusted basis of a Certificate subject to such election will be
increased to reflect market discount included in gross income, thereby reducing
any gain or increasing any loss on a sale or taxable disposition.
Amortizable Bond Premium. In general, if a Certificateholder purchases a
Certificate at a premium (i.e., an amount in excess of the amount payable upon
the maturity thereof), such Certificateholder will be considered to have
purchased such Certificate with "amortizable bond premium" equal to the amount
of such excess. Such Certificateholder may elect to deduct the amortizable bond
premium as it accrues under a constant-yield method over the remaining term of
the Certificate. Such Certificateholder's tax basis in the Certificate will be
reduced by the amount of the amortizable bond premium deducted. Any such
election shall apply to all debt instruments (other than instruments the
interest on which is excludible from gross income) held by the
Certificateholder at the beginning of the first taxable year to which the
election applies or thereafter acquired and is irrevocable without the consent
of the Service. Bond premium on a Certificate held by a Certificateholder who
does not elect to deduct the premium will decrease the gain or increase the
loss otherwise recognized on the disposition of the Certificate.
Sale or Other Disposition. If a Certificateholder sells a Certificate, the
Certificateholder will recognize gain or loss in an amount equal to the
difference between the amount realized on the sale and the Certificateholder's
adjusted tax basis in the Certificate. The adjusted tax basis of a Certificate
to a particular Certificateholder generally will equal the Certificateholder's
cost for the Certificate, increased by any market discount, OID and gain
previously included by such Certificateholder in income with respect to the
Certificate and decreased by principal payments previously received by such
Certificateholder and the amount of bond premium previously amortized with
respect to the Certificate. Any such gain or loss will be capital gain or loss
if the Certificate was held as a capital asset, except for gain representing
accrued interest and accrued market discount not previously included in income,
and will be long-term capital gain or loss if the Certificate was held for more
than one year. Capital losses generally may be used only to offset capital
gains.
Foreign Holders. Generally, interest paid to a Certificateholder who is a
nonresident alien individual or a foreign corporation and who does not hold the
Certificate in connection with a United States trade or business will be
treated as "portfolio interest" and therefore will be exempt from the 30%
withholding tax. Such a Certificateholder will be entitled to receive interest
payments on the Certificates free of United States federal income tax provided
that such Certificateholder periodically provides the Trustee (or other person
who would otherwise be required to withhold tax) with a statement certifying
under penalty of perjury that such Certificateholder is not a United States
person and provides the name and address of such Certificateholder. Such a
Certificateholder will not be subject to federal income tax on gain from the
disposition of a Certificate unless the Certificateholder is an individual who
is present in the United States for 183 days or more during the taxable year in
which the disposition takes place and certain other requirements are met. See
"Possible Alternative Treatment of the Certificates" regarding potential
alternative tax consequences to foreign holders.
Tax Administration and Reporting. The Trustee will furnish to each
Certificateholder with each distribution a statement setting forth the amount
of such distribution allocable to principal and to interest. Reports will be
made annually to the Service and to holders of record that are not excepted
from the reporting requirements regarding information as may be required with
respect to interest and original issue discount, if any, with respect to the
Certificates.
Backup Withholding. Under certain circumstances, a Certificateholder may be
subject to "backup withholding" at a 31% rate. Backup withholding may apply to
a Certificateholder who is a United States person if the holder, among other
circumstances, fails to furnish such holder's Social Security number or other
taxpayer identification number to the Trustee. Backup withholding may apply,
under certain circumstances, to a Certificateholder who is a foreign person if
the Certificateholder fails to provide the Trustee or the Certificateholder's
securities broker with the statement necessary to establish the exemption from
federal income and withholding tax on interest on the Certificate. Backup
withholding, however, does
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not apply to payments on a Certificate made to certain exempt recipients, such
as corporations and tax-exempt organizations, and to certain foreign persons.
Certificateholders should consult their tax advisors for additional information
concerning the potential application of backup withholding to payments received
by them with respect to a Certificate.
Possible Alternative Treatment of the Certificates. If the Service were
successfully to assert that the Certificates did not represent debt for federal
income tax purposes, the Certificates would probably be treated as equity
interests in the Trust. If so treated, the Trust might be taxable as a
corporation with the adverse consequences described above (and the taxable
corporation would not be able to reduce its taxable income by deductions for
interest expense on Certificates recharacterized as equity). Alternatively,
based on the opinion of Dorsey & Whitney P.L.L.P., because the Finance I Note
will be treated as debt for federal income tax purposes, the Trust would not be
characterized as a publicly traded partnership and would therefore continue to
be treated as an entity that is not taxable as a corporation. See "Tax
Characterization of the Trust," above. Under these circumstances, the Trust
would report each Certificateholder's allocable share of items of Trust income
and expense to Certificateholders and the Service on Schedule K-1. However, any
such characterization of the Certificates as equity interests is not expected
to result in a materially different amount of taxable income being realized by
Certificateholders as compared to the amount of income expected to be realized
from treatment of the Certificates as indebtedness of the Trust. Nonetheless,
treatment of the Certificates as equity interests in such a partnership could
have adverse tax consequences to certain holders. For example, (i) a portion of
the income allocated to Certificateholders may not be offset by other
deductions on such holder's return, including net operating loss carryforwards;
(ii) a portion of the income allocated to Certificateholders who are subject to
the tax on unrelated business income imposed by Section 511 of the Code may be
treated as unrelated business taxable income; (iii) income to foreign holders
generally would be subject to federal tax and federal tax return filing and
withholding requirements and (iv) individual holders might be subject to
certain limitations on their ability to deduct their share of Trust expenses.
If the Certificates were treated as equity interests in a partnership, each
Certificateholder would be required to separately take into account such
holder's allocated share of income, gains, losses, deductions and credits of
the Trust. The Trust's income will consist primarily of interest income
attributable to the Finance I Note and income attributable to the Residual
Interests. The tax items of a partnership are allocable to its partners in
accordance with the Code, Treasury Regulations and the partnership agreement
(here, the Trust Agreement and related documents). The Trust Agreement will
provide, in general, that, if appropriate, the Certificateholders would be
allocated taxable income of the Trust for each month equal to the sum of (i)
the interest that accrues on the Certificates in accordance with their terms
for such month; and (ii) any other amounts of income payable to the
Certificateholders for such month. All remaining taxable income of the Trust
would be allocated to the Subordinated Certificateholders. Based on the
economic arrangement of the parties, this approach for allocating Trust income
should be permissible under applicable Treasury Regulations, although no
assurance can be given that the Service would not require a greater amount of
income to be allocated to Certificateholders. Moreover, even under the
foregoing method of allocation, Certificateholders may be allocated income
equal to the entire Interest Rate plus the other items described above even
though the Trust might not have sufficient cash to make current cash
distributions of such amount. Thus, cash basis holders will in effect be
required to report income from the Certificates on the accrual basis and
Certificateholders may become liable for taxes on Trust income even if they
have not received cash from the Trust to pay such taxes.
Under this approach, a Certificateholder's allocated share of expenses of the
Trust (including fees to the Trustee but not interest expense) would be
miscellaneous itemized deductions. An individual, an estate, or a trust that
holds a Certificate either directly or through a pass-through entity would be
allowed to deduct such expenses under Section 212 of the Code only to the
extent that, in the aggregate and combined with certain other itemized
deductions, they exceed 2% of the adjusted gross income of the
Certificateholder. In addition, Section 68 of the Code provides that the amount
of itemized deductions (including those provided for in Section 212 of the
Code) otherwise allowable for the taxable year for an individual whose adjusted
gross income exceeds a threshold amount specified in the Code ($111,800 in
1994, in the case of a joint return)
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will be reduced by the lesser of (i) 3% of the excess of adjusted gross income
over the specified threshold amount or (ii) 80% of the amount of itemized
deductions otherwise allowable for such taxable year. To the extent that a
Certificateholder is not permitted to deduct servicing fees allocable to a
Certificate, the taxable income of the Certificateholder attributable to that
Certificate would exceed the net cash distributions related to such income.
Other Tax Consequences. No advice has been received as to local income,
franchise, personal property, or other taxation in any state or locality, or as
to the tax effect of ownership of Certificates in any state or locality.
Certificateholders are advised to consult their own tax advisors with respect
to any state or local income, franchise, personal property, or other tax
consequences arising out of their ownership of Certificates.
THE DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON
A CERTIFICATEHOLDER'S PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF CERTIFICATES, INCLUDING THE TAX
CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE
EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on those employee benefit plans,
including individual Retirement Accounts and Individual Retirement Annuities
(collectively "IRAs"), to which they apply ("Plans") and on those persons who
are fiduciaries with respect to such Plans. In accordance with ERISA's general
fiduciary standards, before investing in the Certificates, a Plan fiduciary
should determine whether such an investment is permitted under the governing
Plan instruments and is appropriate for the Plan in view of its overall
investment policy and the composition and diversification of its portfolio.
Other provisions of ERISA and the Code prohibit certain transactions involving
the assets of a Plan and persons who have certain specified relationships to
the Plan ("parties in interest" within the meaning of ERISA or "disqualified
persons" within the meaning of the Code). Prohibited transactions may generate
excise taxes and other liabilities; prohibited transactions involving IRAs may
result in the disqualification of the IRAs. Thus, a Plan fiduciary considering
an investment in the Certificates should also consider whether such an
investment might constitute or give rise to a prohibited transaction under
ERISA or the Code.
Certain transactions involved in the operation of the Trust might be deemed
to constitute prohibited transactions under ERISA and the Code, if assets of
the Trust were deemed to be assets of an investing Plan. ERISA and the Code do
not define "plan assets." The U.S. Department of Labor (the "DOL") has
published a regulation (the "Regulation") which took effect March 13, 1987,
concerning whether or not a Plan's assets will be deemed to include an interest
in the underlying assets of an entity (such as the Trust) for purposes of the
reporting and disclosure and fiduciary responsibility provisions of ERISA and
of the excise tax provisions related to prohibited transactions in the Code if
the Plan acquires an "equity interest" in such entity. The Regulation only
applies to the purchase by a Plan of an "equity interest" in an entity. An
equity interest is defined in the Regulation as an interest in an entity other
than an instrument which is treated as debt under applicable local law, has no
substantial equity features, and which is not a beneficial interest in a trust
or a profit interest in a partnership. If under ERISA the Certificates are not
deemed to be an "equity interest" in the Trust, the Trust's assets would not be
treated as Plan assets solely as a result of the purchase of the Certificates
by a Plan.
The Regulation also contains an exception that provides that if a Plan
acquires a "publicly-offered security," the issuer of the security is not
deemed to hold Plan assets. A publicly-offered security is a security that is
(i) freely transferable, (ii) part of a class of securities that is owned by
100 or more investors
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independent of the issuer and of one another by the conclusion of the offering
and (iii) either is (A) part of a class of securities registered under section
12(b) or 12(g) of the Securities Exchange Act of 1934, or (B) sold to the Plan
as part of an offering of securities to the public pursuant to an effective
registration statement under the Securities Act of 1933 and the class of
securities of which such security is a part is registered under the Securities
Exchange Act of 1934 within 120 days (or such later time as may be allowed by
the Securities and Exchange Commission) after the end of the fiscal year of the
issuer during which the offering of such securities to the public occurred.
It is anticipated that the Certificates will meet the criteria of publicly-
offered securities as set forth above. It is expected (although no assurance
can be given) that the Certificates will be held beneficially by 100
independent persons by the conclusion of the offering; there are no
restrictions imposed on the transfer of the Certificates (other than the
prohibition on transfers to certain "disqualified organizations," as described
under ("Description of the Certificates--Restrictions on Transfer") and the
Certificates will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act of 1933, and they will be
timely registered under the Securities Exchange Act of 1934.
If the Certificates were deemed to be an extension of credit for ERISA
purposes, the purchase of the Certificates by a Plan with respect to which
Green Tree or one of its affiliates is a "party in interest" or "disqualified
person" might be considered a prohibited extension of credit under Section 406
of ERISA and Section 4975 of the Code unless an exemption is applicable. There
are at least three prohibited transaction class exemptions issued by the DOL
that might apply, depending in part on who decided to acquire the Certificates
for the Plan: DOL Prohibited Transaction Exemption ("PTE") 84-14 (Class
Exemption for Plan Asset Transactions determined by Independent Qualified
Professional Asset Managers); PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds); and PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts).
Moreover, whether the Certificates are debt or equity for ERISA purposes, a
possible violation of the prohibited transaction rules could occur if the
Certificates were purchased during the offering with assets of a Plan if Green
Tree, the Trustee, any Underwriter or any of their affiliates were a fiduciary
with respect to such Plan. Under ERISA and the Code, a person is a "fiduciary"
with respect to a Plan to the extent that such person (i) exercises any
discretionary authority or discretionary control respecting management of such
Plan or exercises any authority or control respecting management or disposition
of its assets, (ii) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any moneys or other property of such Plan,
or has any authority or responsibility to do so, or (iii) has any discretionary
authority or discretionary responsibility in the administration of such Plan.
Accordingly, the fiduciaries of any Plan should not purchase the Certificates
during the offering with assets of any Plan if Green Tree, the Trustee, the
Underwriters or any of their affiliates is a fiduciary with respect to the
Plan.
In light of the foregoing, fiduciaries of Plans, including insurance
companies (whether investing assets for their general or separate accounts),
considering the purchase of the Certificates should consult their own tax or
other appropriate counsel regarding the application of ERISA and the Code to
their purchase of the Certificates.
LEGAL INVESTMENT CONSIDERATIONS
No representations or warranties are made concerning whether the Certificates
are legal investments under any federal or state law, regulation, rule or order
of any court. The Certificates do not constitute "mortgage related securities"
within the meaning of the Secondary Mortgage Market Enhancement Act of 1984, as
amended, which may adversely affect their liquidity.
Prospective investors should consider the applicability of statutes, rules,
regulations, orders, guidelines or agreements generally governing investments
made by a particular investor including, but not limited to, "prudent investor"
provisions and percentage-of-assets limits. Investors should consult their own
legal advisors in determining whether and to what extent the Certificates
constitute legal investment for such investors.
38
<PAGE>
UNDERWRITING
The Underwriters named below have severally agreed, subject to the terms and
conditions of the Underwriting Agreement, to purchase from the Trust the
respective principal amounts of the Certificates set forth opposite their names
below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER CERTIFICATES
----------- ------------
<S> <C>
Lehman Brothers Inc. ......................................... $
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... $
-----------
Total................................................. $
===========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Certificates
offered hereby if any Certificates are purchased. In the event of default by an
Underwriter, the Underwriting Agreement provides that, in certain
circumstances, the Underwriting Agreement may be terminated.
The Underwriters propose to offer the Certificates in part directly to
purchasers at the initial public offering price set forth on the cover page of
this Prospectus and in part to certain securities dealers at such prices less
concessions not to exceed % of the original principal balance of the
Certificates. The Underwriters may allow, and such dealers may reallow,
concessions not to exceed % of the original principal balance of the
Certificates to certain brokers and dealers. After the Certificates are
released for sale to the public, the offering price and other selling terms may
be varied by the Underwriters.
The Underwriting Agreement provides that Green Tree will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or contribute to payments the Underwriters may be
required to make in respect thereof.
LEGAL MATTERS
Certain legal matters relating to the Certificates will be passed upon for
the Trust by Dorsey & Whitney P.L.L.P., Minneapolis, Minnesota, and for the
Underwriters by Brown & Wood, New York, New York. The material federal income
tax consequences of the Certificates will be passed upon for the Trust by
Dorsey & Whitney P.L.L.P.
39
<PAGE>
APPENDIX I
I. THE CONTRACTS
Set forth below is a description of certain additional characteristics of the
Contracts as of June 1, 1995 (or July 1, 1995, with respect to Contracts
included in the 1995-5 Securitized Pool) (the "Cut-off Date").
GEOGRAPHICAL DISTRIBUTION
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS % OF ALL AGGREGATE % OF ALL CONTRACTS BY
AS OF CONTRACTS BY NUMBER PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
CUT- OFF OF CONTRACTS AS OUTSTANDING AS OF BALANCE AS OF
DATE OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
--------- ------------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Alabama................. % $ %
Alaska..................
Arizona.................
Arkansas................
California..............
Colorado................
Connecticut.............
Delaware................
District of Columbia....
Florida.................
Georgia.................
Hawaii..................
Idaho...................
Illinois................
Indiana.................
Iowa....................
Kansas..................
Kentucky................
Louisiana...............
Maine...................
Maryland................
Massachusetts...........
Michigan................
Minnesota...............
Mississippi.............
Missouri................
Montana.................
Nebraska................
Nevada..................
New Hampshire...........
New Jersey..............
New Mexico..............
New York................
North Carolina..........
North Dakota............
Ohio....................
Oklahoma................
Oregon..................
Pennsylvania............
Rhode Island............
South Carolina..........
South Dakota............
Tennessee...............
Texas...................
Utah....................
Vermont.................
Virginia................
Washington..............
West Virginia...........
Wisconsin...............
Wyoming.................
Non-U.S. based service
personnel..............
------ ------ ----------------- ------
Total.................. 100.00% $ 100.00%
====== ====== ================= ======
</TABLE>
40
<PAGE>
CONTRACT TYPE
<TABLE>
<CAPTION>
AGGREGATE % OF ALL CONTRACTS BY WEIGHTED
PRINCIPAL BALANCE OUTSTANDING PRINCIPAL ORIGINAL AVERAGE
OUTSTANDING AS OF BALANCE AS OF ORIGINAL TERM WAM CONTRACT
CUT-OFF DATE CUT-OFF DATE BALANCE (MONTHS) (MONTHS) RATE
----------------- --------------------- ----------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Conventional ........... $ % $ %
FHA/VA..................
----------------- ------ ----------------- --- --- -----
Total.................. $ 100.00% $
================= ====== =================
Weighted Average.................................................................. %
=== === =====
</TABLE>
YEAR OF ORIGINATION OF CONTRACTS
<TABLE>
<CAPTION>
% OF ALL
NUMBER OF CONTRACTS BY
CONTRACTS NUMBER OF AGGREGATE % OF ALL CONTRACTS BY
AS OF CONTRACTS PRINCIPAL BALANCE OUTSTANDING PRINCIPAL
CUT-OFF AS OF CUT- OUTSTANDING AS OF BALANCE AS OF
YEAR OF ORIGINATION DATE OFF DATE CUT-OFF DATE CUT-OFF DATE
- ------------------- --------- ------------ ----------------- ---------------------
<S> <C> <C> <C> <C>
1980.................... % $ %
1981....................
1982....................
1983....................
1984....................
1985....................
1986....................
1987....................
1988....................
1989....................
1990....................
1991....................
1992....................
1993....................
1994....................
1995....................
------ ------ ----------------- ------
Total................ 100.00% $ 100.00%
====== ====== ================= ======
</TABLE>
41
<PAGE>
DISTRIBUTION OF ORIGINAL CONTRACT AMOUNTS
<TABLE>
<CAPTION>
% OF ALL CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
ORIGINAL CONTRACT NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
AMOUNT (IN DOLLARS)(1) AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ---------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Less than 10,000.00.... $ %
10,000- 19,999.99......
20,000- 29,999.99......
30,000- 39,999.99......
40,000- 49,999.99......
50,000- 59,999.99......
60,000- 69,999.99......
70,000- 79,999.99......
80,000- 89,999.99......
90,000- 99,999.99......
100,000-109,999.99......
110,000-119,999.99......
120,000-129,999.99......
---- ----- ------
Total............... $ 100.00%
==== ===== ======
</TABLE>
- --------
(1) The largest original Contract amount is $ .
DISTRIBUTION OF CURRENT CONTRACT AMOUNTS
<TABLE>
<CAPTION>
% OF ALL CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
CURRENT CONTRACT NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
AMOUNT (IN DOLLARS) AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Less than 5,000.00...... $ %
5,000- 9,999.99......
10,000- 14,999.99......
15,000- 19,999.99......
20,000- 24,999.99......
25,000- 29,999.99......
30,000- 34,999.99......
35,000- 39,999.99......
40,000- 44,999.99......
45,000- 49,999.99......
50,000- 54,999.99......
55,000- 59,999.99......
60,000- 64,999.99......
65,000- 69,999.99......
70,000- 74,999.99......
75,000- 79,999.99......
80,000- 84,999.99......
85,000- 89,999.99......
90,000- 94,999.99......
95,000- 99,999.99......
100,000-104,999.99......
105,000-109,999.99......
110,000-114,999.99......
Over 115,000............
--- ----- ------
Total............... $ 100.00%
=== ===== ======
</TABLE>
42
<PAGE>
DISTRIBUTION OF ORIGINAL LOAN-TO-VALUE RATIOS
<TABLE>
<CAPTION>
% OF ALL CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
LOAN-TO-VALUE RATIO(1) AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ---------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Less than 60.00%........ $ %
60.01%-65.00%.........
65.01%-70.00%.........
70.01%-75.00%.........
75.01%-80.00%.........
80.01%-85.00%.........
85.01%-90.00%.........
90.01%-95.00%.........
Over 95.00%...........
--- ----- ------
Total............... $ 100.00%
=== ===== ======
</TABLE>
- --------
(1) Rounded to the nearest 1%. The method of calculating loan-to-value ratios
is described under "Green Tree Financial Corporation--Contract
Origination."
43
<PAGE>
REMAINING MONTHS TO MATURITY
<TABLE>
<CAPTION>
% OF ALL CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
MONTHS REMAINING NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
AS OF CUT-OFF DATE AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ------------------ ------------------- ------------------- ---------------------
<S> <C> <C> <C>
0- 14................. $ %
15- 30.................
31- 45.................
46- 60.................
61- 75.................
76- 90.................
91-105.................
106-120.................
121-135.................
136-150.................
151-165.................
166-180.................
181-195.................
196-210.................
211-225.................
226-240.................
241-255.................
256-270.................
271-285.................
286-300.................
---- ----- ------
Total............... $ 100.00%
==== ===== ======
</TABLE>
SEASONING
<TABLE>
<CAPTION>
% OF ALL CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
MONTHS SINCE NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
ORIGINATION AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
------------ ------------------- ------------------- ---------------------
<S> <C> <C> <C>
0- 12......... $ %
13- 24.........
25- 36.........
37- 48.........
49- 60.........
61- 72.........
73- 84.........
85- 96.........
97-108.........
109-120.........
121-132.........
---- ----- ------
Total....... $ 100.00%
==== ===== ======
</TABLE>
44
<PAGE>
ORIGINAL TERM
<TABLE>
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
ORIGINAL TERM (MONTHS) AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- ---------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
13- 24.................... $ %
25- 36....................
37- 48....................
49- 60....................
61- 72....................
73- 84....................
85- 96....................
97-108....................
109-120....................
121-132....................
133-144....................
145-156....................
157-168....................
169-180....................
181-192....................
193-204....................
205-216....................
217-228....................
229-240....................
241-252....................
253-264....................
265-276....................
277-288....................
289-300....................
------ ------ ------
Total.................. $ 100.00%
====== ====== ======
ADDITIONAL COLLATERAL CHARACTERISTICS
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
WIDTH OF MANUFACTURED HOMES AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- --------------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Single Wide................ $ %
Multi Wide.................
------ ------ ------
Total.................. $ 100.00%
====== ====== ======
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
LOCATION OF PROPERTY AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- -------------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Park....................... $ %
Private....................
------ ------ ------
Total.................. $ 100.00%
====== ====== ======
<CAPTION>
% OF CONTRACTS BY
AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
NEW/USED UNITS AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
- -------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
New........................ $ %
Used.......................
------ ------ ------
Total.................. $ 100.00%
====== ====== ======
</TABLE>
45
<PAGE>
CONTRACT RATE
<TABLE>
<CAPTION>
% OF CONTRACT POOL
RANGE OF AGGREGATE PRINCIPAL OUTSTANDING PRINCIPAL
CONTRACTS BY NUMBER OF CONTRACTS BALANCE OUTSTANDING BALANCE AS OF
CONTRACT RATE AS OF CUT-OFF DATE AS OF CUT-OFF DATE CUT-OFF DATE
------------- ------------------- ------------------- ---------------------
<S> <C> <C> <C>
Less than 8.01%.. $ %
8.01%-8.25%......
8.26%-8.50%......
8.51%-8.75%......
8.76%-9.00%......
9.01%-9.25%......
9.26%-9.50%......
9.51%-9.75%......
9.76%-10.00%.....
10.01%-10.25%....
10.26%-10.50%....
10.51%-10.75%....
10.76%-11.00%....
11.01%-11.25%....
11.26%-11.50%....
11.51%-11.75%....
11.76%-12.00%....
12.01%-12.25%....
12.26%-12.50%....
12.51%-12.75%....
12.76%-13.00%....
13.01%-13.25%....
13.26%-13.50%....
13.51%-13.75%....
13.76%-14.00%....
14.01%-14.25%....
14.26%-14.50%....
14.51%-14.75%....
14.76%-15.00%....
15.01%-15.25%....
15.26%-15.50%....
15.51%-15.75%....
15.76%-16.00%....
---- ------- ------
Total........ $ 100.00%
==== ======= ======
</TABLE>
46
<PAGE>
II. THE SECURITIZED POOLS
TOTAL SECURITIZED POOL INFORMATION(1)
<TABLE>
<CAPTION>
ORIGINAL WEIGHTED AVERAGE WEIGHTED AVERAGE
POOL PRINCIPAL TOTAL CERTIFICATE WAM WAM WAC INVESTOR RATE INTEREST MARGIN
TRANSACTION BALANCE BALANCE (MONTHS) (MONTHS) (%) (%) (%)(2)
- ------------------------ -------------- ----------------- -------- -------- --- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
GTFC 1994-5............. $ $ % % %
GTFC 1994-6.............
GTFC 1994-7.............
GTFC 1994-8.............
GTFC 1995-1.............
GTFC 1995-2.............
GTFC 1995-3.............
GTFC 1995-4.............
GTFC 1995-5.............
------ ------
Total................. $ $
====== ======
Weighted Average...... % % %
=== === === === ===
</TABLE>
- ----
(1) As of the Cut-off Date.
(2) Before servicing fees, losses and expenses.
(3) Includes $ representing prepayments of principal received on the
Contracts in the 1995-4 Securitized Pool prior to June 1, 1995, which amount
will be distributed to the related certificateholders on July 15, 1995.
PREPAYMENT PROJECTIONS COMPARISON
<TABLE>
<CAPTION>
LOAN-BY-LOAN SINGLE LINE COLLATERAL POOL
PREPAY PROJECTIONS (CPR%)(1) PREPAY PROJECTIONS (CPR%)(2)
-------------------------------------- --------------------------------------
TRANSACTION 1 MO. 6 MO. 12 MO. 60 MO. 1 MO. 6 MO. 12 MO. 60 MO.
----------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GTFC 1994-5............. % % % % % % % %
GTFC 1994-6.............
GTFC 1994-7.............
GTFC 1994-8.............
GTFC 1995-1.............
GTFC 1995-2.............
GTFC 1995-3.............
GTFC 1995-4.............
GTFC 1995-5.............
<CAPTION>
SINGLE LINE COLLATERAL POOL
PREPAY PROJECTIONS (MHP%)(3)
-----------------------------------------
TRANSACTION 1 MO. 6 MO. 12 MO. 60 MO.
----------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C>
GTFC 1994-5............. % % % %
GTFC 1994-6.............
GTFC 1994-7.............
GTFC 1994-8.............
GTFC 1995-1.............
GTFC 1995-2.............
GTFC 1995-3.............
GTFC 1995-4.............
GTFC 1995-5.............
</TABLE>
- ----
(1) The CPRs have been calculated and stated on a loan-by-loan basis, for each
pool, taking into account the actual WAC and amortization schedule for
each loan in the pool.
(2) The CPRs have been calculated assuming that each transaction pool consists
of a single loan with characteristics equal to the weighted average WAM
and WAC of the pool. The CPRs are calculated using the WAC and
amortization schedule of such single loan, not the actual WAC and
amortization schedule for each loan in the pool.
(3) Prepayments on the Contracts may be measured by a prepayment standard or
model. The Manufactured Housing Prepayment Model ("MHP") is based on an
assumed rate of prepayments each month of the then unpaid principal
balance of a pool of new Contracts. A prepayment assumption of 100% MHP
assumes constant prepayment rates of 3.7% per annum of the then unpaid
principal balance of such Contracts in the first month of the life of the
Contracts and an additional 0.1% per annum in each month thereafter until
the 24th month. Beginning in the 24th month and in each month thereafter
during the life of the Contracts, 100% MHP assumes a constant prepayment
rate of 6.0% per annum each month.
47
<PAGE>
GTFC 1995-5
Issue Date: July , 1995.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Asset Value
-------- ----------
Pass-
Description of Current Through
Securities: Balance Rate
- -------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ %
Class A-2; Senior $ %
Class A-3; Senior $ %
Class A-4; Senior $ %
Class A-5; Senior $ %
Class A-6; Senior $ %
Class M-1; Subordinate $ %
Class B-1; Subordinate $ %
Class B-2; Subordinate $ %
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject
to certain conditions, holders of the Class A Certificates
will receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates
will receive payments of principal sequentially, first to
the Class A-1 Certificateholders until the Class A-1
Principal Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been
reduced to zero. On each Remittance Date on or after the
date on which the Class A Principal Balance has been reduced
to zero, holders of the Class M-1 Certificates will be
entitled to receive the Class A Percentage of the Formula
Principal Distribution Amount.
The Class B Cross-over Date is the later of (A) August 1999
or (B) the first Remittance Date on which the Class B
Principal Balance represents 12% or more of the Pool
Scheduled Principal Balance. On each Remittance Date on or
after the Class B Cross-over Date and prior to the
Remittance Date on which the Class A Principal Balance and
the Class M-1 Principal Balance are reduced to zero, holders
of the Class B-1 and Class B-2 Certificates will be entitled
to distributions of principal only if all the Class B
Principal Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the Class
B Certificates, and the Class B-1 Certificates are supported
by the subordination of the Class B-2 Certificates. The
Class B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
48
<PAGE>
[GTFC 1995-5 CASHFLOWS]
49
<PAGE>
GTFC 1995-4
Issue Date: June 22, 1995.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 6.05%
Class A-2; Senior $ 6.10%
Class A-3; Senior $ 6.30%
Class A-4; Senior $ 6.75%
Class A-5; Senior $ 6.95%
Class A-6; Senior $ 7.30%
Class M-1; Subordinate $ 7.60%
Class B-1; Subordinate $ 7.30%
Class B-2; Subordinate $ 7.70%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject
to certain conditions, holders of the Class A Certificates
will receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates
will receive payments of principal sequentially, first to
the Class A-1 Certificateholders until the Class A-1
Principal Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been
reduced to zero. On each Remittance Date on or after the
date on which the Class A Principal Balance has been reduced
to zero, holders of the Class M-1 Certificates will be
entitled to receive the Class A Percentage of the Formula
Principal Distribution Amount.
The Class B Cross-over Date is the later of (A) July 1999 or
(B) the first Remittance Date on which the Class B Principal
Balance represents 12% or more of the Pool Scheduled
Principal Balance. On each Remittance Date on or after the
Class B Cross-over Date and prior to the Remittance Date on
which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the Class
B Certificates, and the Class B-1 Certificates are supported
by the subordination of the Class B-2 Certificates. The
Class B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
50
<PAGE>
[GTFC 1995-4 CASHFLOWS]
51
<PAGE>
GTFC 1995-3
Issue Date: May 17, 1995.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 6.25%
Class A-2; Senior $ 6.45%
Class A-3; Senior $ 6.65%
Class A-4; Senior $ 7.05%
Class A-5; Senior $ 7.30%
Class A-6; Senior $ 7.65%
Class M-1; Subordinate $ 7.95%
Class B-1; Subordinate $ 7.85%
Class B-2; Subordinate $ 8.10%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject to
certain conditions, holders of the Class A Certificates will
receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates will
receive payments of principal sequentially, first to the
Class A-1 Certificateholders until the Class A-1 Principal
Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been reduced
to zero. On each Remittance Date on or after the date on
which the Class A Principal Balance has been reduced to zero,
holders of the Class M-1 Certificates will be entitled to
receive the Class A Percentage of the Formula Principal
Distribution Amount.
The Class B Cross-over Date is the later of (A) June 1999 or
(B) the first Remittance Date on which the Class B Principal
Balance represents 13.5% or more of the Pool Scheduled
Principal Balance. On each Remittance Date on or after the
Class B Cross-over Date and prior to the Remittance Date on
which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the Class
B Certificates, and the Class B-1 Certificates are supported
by the subordination of the Class B-2 Certificates. The Class
B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
52
<PAGE>
[GTFC 1995-3 CASHFLOWS]
53
<PAGE>
GTFC 1995-2
Issue Date: March 30, 1995.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Asset Value
-------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 6.80%
Class A-2; Senior $ 7.25%
Class A-3; Senior $ 7.45%
Class A-4; Senior $ 7.85%
Class A-5; Senior $ 8.00%
Class A-6; Senior $ 8.30%
Class M-1; Subordinate $ 8.65%
Class B-1; Subordinate $ 8.60%
Class B-2; Subordinate $ 8.80%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject to
certain conditions, holders of the Class A Certificates will
receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates will
receive payments of principal sequentially, first to the
Class A-1 Certificateholders until the Class A-1 Principal
Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been reduced
to zero. On each Remittance Date on or after the date on
which the Class A Principal Balance has been reduced to zero,
holders of the Class M-1 Certificates will be entitled to
receive the Class A Percentage of the Formula Principal
Distribution Amount.
The Class B Cross-over Date is the later of (A) May 1999 or
(B) the first Remittance Date on which the Class B Principal
Balance represents 13.5% or more of the Pool Scheduled
Principal Balance. On each Remittance Date on or after the
Class B Cross-over Date and prior to the Remittance Date on
which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the Class
B Certificates, and the Class B-1 Certificates are supported
by the subordination of the Class B-2 Certificates. The Class
B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. Class C Certificate (Residual).
54
<PAGE>
[GTFC 1995-2 CASHFLOWS]
55
<PAGE>
GTFC 1995-1
Issue Date: February 16, 1995.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 7.25%
Class A-2; Senior $ 7.80%
Class A-3; Senior $ 7.95%
Class A-4; Senior $ 8.20%
Class A-5; Senior $ 8.40%
Class A-6; Senior $ 8.70%
Class M-1; Subordinate $ 9.05%
Class B-1; Subordinate $ 9.00%
Class B-2; Subordinate $ 9.20%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject to
certain conditions, holders of the Class A Certificates will
receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates will
receive payments of principal sequentially, first to the
Class A-1 Certificateholders until the Class A-1 Principal
Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been reduced
to zero. On each Remittance Date on or after the date on
which the Class A Principal Balance has been reduced to zero,
holders of the Class M-1 Certificates will be entitled to
receive the Class A Percentage of the Formula Principal
Distribution Amount.
The Class B Cross-over Date is the later of (A) March 2000 or
(B) the first Remittance Date on which the Class B Principal
Balance represents 17.5% or more of the Pool Scheduled
Principal Balance. On each Remittance Date on or after the
Class B Cross-over Date and prior to the Remittance Date on
which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the
Class B Certificates, and the Class B-1 Certificates are
supported by the subordination of the Class B-2 Certificates.
The Class B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
56
<PAGE>
[GTFC 1995-1 CASHFLOWS]
57
<PAGE>
GTFC 1994-8
Issue Date: December 22, 1994.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 7.75%
Class A-2; Senior $ 8.15%
Class A-3; Senior $ 8.25%
Class A-4; Senior $ 8.50%
Class A-5; Senior $ 8.60%
Class A-6; Senior $ 8.90%
Class M-1; Subordinate $ 9.25%
Class B-1; Subordinate $ 9.10%
Class B-2; Subordinate $ 9.40%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject to
certain conditions, holders of the Class A Certificates will
receive the Class A Percentage (as defined in the Pooling and
Servicing Agreement) of the Formula Principal Distribution
Amount. Holders of the Class A Certificates will receive
payments of principal sequentially, first to the Class A-1
Certificateholders until the Class A-1 Principal Balance is
reduced to zero, then to the Class A-2 Certificateholders
until the Class A-2 Principal Balance is reduced to zero, and
so on until the Class A-6 Principal Balance is reduced to
zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been reduced
to zero. On each Remittance Date on or after the date on
which the Class A Principal Balance has been reduced to zero,
holders of the Class M-1 Certificates will be entitled to
receive the Class A Percentage of the Formula Principal
Distribution Amount.
The Class B Cross-over Date is the later of (A) January 2000
or (B) the first Remittance Date on which the Class B
Principal Balance represents 23% or more of the Pool
Scheduled Principal Balance. On each Remittance Date on or
after the Class B Cross-over Date and prior to the Remittance
Date on which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the
Class B Certificates, and the Class B-1 Certificates are
supported by the subordination of the Class B-2 Certificates.
The Class B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
58
<PAGE>
[GTFC 1994-8 CASHFLOWS]
59
<PAGE>
GTFC 1994-7
Issue Date: November 3, 1994.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 6.70%
Class A-2; Senior $ 7.60%
Class A-3; Senior $ 8.00%
Class A-4; Senior $ 8.35%
Class A-5; Senior $ 8.55%
Class A-6; Senior $ 8.95%
Class M-1; Subordinate $ 9.25%
Class B-1; Subordinate $ 9.00%
Class B-2; Subordinate $ 9.35%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject to
certain conditions, holders of the Class A Certificates will
receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates will
receive payments of principal sequentially, first to the
Class A-1 Certificateholders until the Class A-1 Principal
Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been reduced
to zero. On each Remittance Date on or after the date on
which the Class A Principal Balance has been reduced to zero,
holders of the Class M-1 Certificates will be entitled to
receive the Class A Percentage of the Formula Principal
Distribution Amount.
The Class B Cross-over Date is the later of (A) December 1999
or (B) the first Remittance Date on which the Class B
Principal Balance represents 23% or more of the Pool
Scheduled Principal Balance. On each Remittance Date on or
after the Class B Cross-over Date and prior to the Remittance
Date on which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the Class
B Certificates, and the Class B-1 Certificates are supported
by the subordination of the Class B-2 Certificates. The Class
B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
60
<PAGE>
[GTFC 1994-7 CASHFLOWS]
61
<PAGE>
GTFC 1994-6
Issue Date: September 29, 1994.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 6.35%
Class A-2; Senior $ 7.25%
Class A-3; Senior $ 7.70%
Class A-4; Senior $ 8.05%
Class A-5; Senior $ 8.25%
Class A-6; Senior $ 8.60%
Class M-1; Subordinate $ 8.90%
Class B-1; Subordinate $ 8.65%
Class B-2; Subordinate $ 9.00%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject to
certain conditions, holders of the Class A Certificates will
receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates will
receive payments of principal sequentially, first to the
Class A-1 Certificateholders until the Class A-1 Principal
Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-6 Principal
Balance is reduced to zero.
Payments of principal on the Class M-1 Certificates will not
commence until the Class A Principal Balance has been reduced
to zero. On each Remittance Date on or after the date on
which the Class A Principal Balance has been reduced to zero,
holders of the Class M-1 Certificates will be entitled to
receive the Class A Percentage of the Formula Principal
Distribution Amount.
The Class B Cross-over Date is the later of (A) October 1999
or (B) the first Remittance Date on which the Class B
Principal Balance represents 24% or more of the Pool
Scheduled Principal Balance. On each Remittance Date on or
after the Class B Cross-over Date and prior to the Remittance
Date on which the Class A Principal Balance and the Class M-1
Principal Balance are reduced to zero, holders of the Class
B-1 and Class B-2 Certificates will be entitled to
distributions of principal only if all the Class B Principal
Distribution Tests are satisfied. The Class B-2
Certificateholders are not entitled to any distributions of
principal until the Class B-1 Principal Balance has been
reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class M-1 and Class B Certificates, the Class M-1
Certificates are supported by the subordination of the Class
B Certificates, and the Class B-1 Certificates are supported
by the subordination of the Class B-2 Certificates. The Class
B-2 Certificateholders are entitled to a Green Tree
Guarantee. To the extent that funds in the Certificate
Account are insufficient to distribute the Class B-2 Formula
Distribution Amount, Green Tree is obligated to pay the
Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
62
<PAGE>
[GTFC 1994-6 CASHFLOWS]
63
<PAGE>
GTFC 1994-5
Issue Date: August 11, 1994.
<TABLE>
<CAPTION>
Bond Value Segmentation
-----------------------
Residual Total Bond
Guarantee Fee Asset Value
------------- -------- ----------
Pass-
Current Through
Description of Securities: Balance Rate
- -------------------------- ------- -------
<S> <C> <C>
Class A-1; Senior $ 6.60%
Class A-2; Senior $ 7.30%
Class A-3; Senior $ 7.60%
Class A-4; Senior $ 7.95%
Class A-5; Senior $ 8.30%
Class B-1; Subordinate $ 8.25%
Class B-2; Subordinate $ 8.55%
</TABLE>
Principal Amortization:
Prior to the Class B Cross-over Date (as defined below),
holders of the Class A Certificates will receive 100% of the
Formula Principal Distribution Amount; thereafter, subject
to certain conditions, holders of the Class A Certificates
will receive the Class A Percentage of the Formula Principal
Distribution Amount. Holders of the Class A Certificates
will receive payments of principal sequentially, first to
the Class A-1 Certificateholders until the Class A-1
Principal Balance is reduced to zero, then to the Class A-2
Certificateholders until the Class A-2 Principal Balance is
reduced to zero, and so on until the Class A-5 Principal
Balance is reduced to zero.
The Class B Cross-over Date is the later of (A) September
1999 or (B) the first Remittance Date on which the Class B
Principal Balance represents 21% or more of the Pool
Scheduled Principal Balance. On each Remittance Date on or
after the Class B Cross-over Date and prior to the
Remittance Date on which the Class A Principal Balance is
reduced to zero, holders of the Class B-1 and Class B-2
Certificates will be entitled to distributions of principal
only if all the Class B Principal Distribution Tests are
satisfied. The Class B-2 Certificateholders are not entitled
to any distributions of principal until the Class B-1
Principal Balance has been reduced to zero.
Credit Enhancement:
The Class A Certificates are supported by the subordination
of the Class B Certificates, and the Class B-1 Certificates
are supported by the subordination of the Class B-2
Certificates. The Class B-2 Certificateholders are entitled
to a Green Tree Guarantee. To the extent that funds in the
Certificate Account are insufficient to distribute the Class
B-2 Formula Distribution Amount, Green Tree is obligated to
pay the Guarantee Payment.
Nature of Net Excess Cashflow:
1. A Guarantee Fee equal to the lesser of Monthly Excess
Cashflow and 300 basis points.
2. Class C Certificate (Residual).
64
<PAGE>
[GTFC 1994-5 CASHFLOWS]
65
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE TRUST OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CERTIFICATES IN
ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
AFFAIRS OF THE TRUST SINCE THE DATE HEREOF.
---------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Certificateholders.............................................. 2
Additional Information..................................................... 2
Summary of Terms........................................................... 3
Risk Factors............................................................... 8
Summary of Transaction..................................................... 9
Green Tree Financial Corporation........................................... 11
The Trust.................................................................. 13
The Trust Property......................................................... 14
Historical and Projected Net Excess Cashflow............................... 16
Yield, Average Life and Prepayment Considerations.......................... 18
Description of the Certificates............................................ 27
Description of the Trust Documents......................................... 31
Use of Proceeds............................................................ 33
Certain Federal Income Tax Consequences.................................... 33
ERISA Considerations....................................................... 37
Legal Investment Considerations............................................ 38
Underwriting............................................................... 39
Legal Matters.............................................................. 39
Appendix I................................................................. 40
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[LOGO OF GREEN TREE FINANCIAL CORPORATION APPEARS HERE]
GREEN TREE SECURITIZED NET INTEREST MARGIN TRUST 1995-A
% SECURITIZED NET INTEREST MARGIN CERTIFICATES
---------------
PROSPECTUS
July , 1995
---------------
LEHMAN BROTHERS
MERRILL LYNCH & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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.................................. 500,000.00*
Attorney's fees and expenses.................................... 50,000.00*
Trustee's fees and expenses..................................... 15,000.00*
Printing and engraving expenses................................. 150,000.00*
Rating Agency fees.............................................. 150,000.00*
Miscellaneous................................................... 137.93*
-----------
Total......................................................... $
===========
</TABLE>
- --------
* Estimated
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Green Tree Financial Corporation ("Green Tree") and Green Tree Manufactured
Housing Net Interest Margin Finance Corp. I ("Finance I") are incorporated
under the laws of Delaware. Section 145 of the Delaware General Corporation Law
provides that a Delaware corporation may indemnify any persons, including
officers and directors, who are, or are threatened to be made, parties to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of such corporation, by reason of the fact that such person was an
officer, director, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise). The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, for criminal proceedings, had no reasonable cause to believe that his
conduct was illegal. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which such officer or director actually and
reasonably incurred.
The Certificate of Incorporation and Bylaws of Green Tree and Finance I each
provide, in effect, that, subject to certain limited exceptions, such
corporation will indemnify its officers and directors to the extent permitted
by the Delaware General Corporation Law.
Green Tree maintains a directors' and officers' insurance policy.
Pursuant to the form of Underwriting Agreement, a copy of which is included
as Exhibit 1.1 hereto, the Underwriters will agree, subject to certain
conditions, to indemnify Green Tree and Finance I, each of their directors,
certain of their officers and any persons who control Green Tree or Finance I
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"), against certain liabilities.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Listed below are the unregistered securities sold by Green Tree since June
1992. These Certificates were distributed by the underwriters listed below and
privately placed by such underwriters with institutional investors in
transactions exempt from the registration provisions of the Securities Act of
1933, as amended. In the table below, the Series entitled "RV" refers to
Recreational Vehicle Asset Backed Certificates, "MC" refers to Certificates for
Motorcycle Contracts and "HI" refers to Certificates for FHA Title I Home
Improvement Loans.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT UNDERWRITERS AND
SERIES ISSUE DATE OF CERTIFICATES OTHER PURCHASERS
------ ---------- ---------------- ----------------
<S> <C> <C> <C>
1.MC 1992-1...... June 12, 1992 $14,007,114 The First Boston Corporation
2.HI 1992-A...... June 18, 1992 32,489,932 The First Boston Corporation
3.RV 1992-2...... June 19, 1992 14,858,272 Lehman Brothers
4.HI 1992-B...... Sept. 17, 1992 21,135,359 The First Boston Corporation
5.MC 1992-2...... Oct. 9, 1992 10,542,200 The First Boston Corporation
6.HI 1992-C...... Dec. 15, 1992 18,720,675 The First Boston Corporation
7.MC 1992-3...... Dec. 17, 1992 7,461,646 The First Boston Corporation
8.HI 1993-A...... March 30, 1993 14,428,655 Merrill Lynch & Co.
9.HI 1993-B...... June 29, 1993 28,416,577 Merrill Lynch & Co.
</TABLE>
II-2
<PAGE>
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 Financial Corporation
3.1c Certificate of Merger of Incorporation of Green Tree Financial
Corporation, as filed with the Delaware Secretary of State on June
30, 1995
3.2 Bylaws of Green Tree Financial Corporation
**3.3 Certificate of Incorporation of Green Tree Manufactured Housing Net
Interest Margin Finance Corp. I
**3.4 Bylaws of Green Tree Manufactured Housing Net Interest Margin
Finance Corp. I
*4.1 Form of Trust Agreement
*4.2 Form of Assignment made by Green Tree Financial Corporation in
favor of Finance I
*4.3 Form of Assignment made by Green Tree Financial Corporation in
favor of Finance I and Finance II
*4.4 Form of Transfer Agreement among Finance I, Finance II and the
Trust
*4.5 Form of Finance I Note
*4.6 Form of Servicing Agreement between Green Tree Financial
Corporation and the Trust
*4.7 Form of Security Agreement between Finance I and the Trust
*4.8 Form of Administration Agreement among the Trust, the Administrator
and the Trustee
5.1 Opinion and consent of Dorsey & Whitney P.L.L.P. as to legality
8.1 Opinion of Dorsey & Whitney P.L.L.P. as to tax matters
***21.1 Subsidiaries of the Registrant
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 (included on page II-4)
</TABLE>
--------
* To be filed by amendment.
** Incorporated by reference to the similarly numbered exhibit to Green
Tree and Finance I's Registration Statement on Form S-1 (File No. 33-
51935), as amended, which became effective on March 18, 1994.
*** Incorporated by reference to Exhibit 21.1 of Green Tree's Annual Report
on Form 10-K for the year ended December 31, 1994.
(b) Financial Statements:
Not Applicable
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the registrants
of expenses incurred or paid by a director, officer or controlling person of
the registrants in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
them is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as a part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-1 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SAINT PAUL, STATE OF MINNESOTA ON JUNE 30, 1995.
Green Tree Financial Corporation
By: /s/ Lawrence M. Coss
------------------------------------
LAWRENCE M. COSS
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED. EACH PERSON WHOSE SIGNATURE TO THIS REGISTRATION STATEMENT
APPEARS BELOW HEREBY CONSTITUTES AND APPOINTS JOHN W. BRINK AND RICHARD G.
EVANS, AND EACH OF THEM, AS HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT,
WITH FULL POWER OF SUBSTITUTION, TO SIGN ON HIS BEHALF INDIVIDUALLY AND IN THE
CAPACITY STATED BELOW AND TO PERFORM ANY ACTS NECESSARY TO BE DONE IN ORDER TO
FILE ALL AMENDMENTS AND POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION
STATEMENT, AND ANY AND ALL INSTRUMENTS OR DOCUMENTS FILED AS PART OF OR IN
CONNECTION WITH THIS REGISTRATION STATEMENT OR THE AMENDMENTS THERETO AND EACH
OF THE UNDERSIGNED DOES HEREBY RATIFY AND CONFIRM ALL THAT SAID ATTORNEY-IN-
FACT AND AGENT, OR HIS SUBSTITUTES, SHALL DO OR CAUSE TO BE DONE BY VIRTUE
HEREOF.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Lawrence M. Coss Chairman of the June 30, 1995
- ------------------------------------- Board and Chief
LAWRENCE M. COSS Executive Officer
(Principal
Executive Officer)
and Director
/s/ Robert D. Potts President and June 30, 1995
- ------------------------------------- Director
ROBERT D. POTTS
/s/ John W. Brink Executive Vice June 30, 1995
- ------------------------------------- President,
JOHN W. BRINK Treasurer and Chief
Financial Officer
(Principal
Financial Officer)
/s/ Robley D. Evans Vice President and June 30, 1995
- ------------------------------------- Controller
ROBLEY D. EVANS (Principal
Accounting Officer)
/s/ Richard G. Evans Director June 30, 1995
- -------------------------------------
RICHARD G. EVANS
II-5
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Tania A. Modic Director June 30, 1995
- -------------------------------------
TANIA A. MODIC
/s/ W. Max McGee Director June 30, 1995
- -------------------------------------
W. MAX MCGEE
/s/ Robert S. Nickoloff Director June 30, 1995
- -------------------------------------
ROBERT S. NICKOLOFF
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-1 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF SAINT PAUL, STATE OF MINNESOTA ON JUNE 30, 1995.
Green Tree Manufactured Housing Net
Interest Margin Finance Corp. I
By: /s/ Lawrence M. Coss
----------------------------------
LAWRENCE M. COSS
CHAIRMAN OF THE BOARD AND
PRESIDENT
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED. EACH PERSON WHOSE SIGNATURE TO THIS REGISTRATION STATEMENT
APPEARS BELOW HEREBY CONSTITUTES AND APPOINTS JOHN W. BRINK AND RICHARD G.
EVANS, AND EACH OF THEM, AS HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT,
WITH FULL POWER OF SUBSTITUTION, TO SIGN ON HIS BEHALF INDIVIDUALLY AND IN THE
CAPACITY STATED BELOW AND TO PERFORM ANY ACTS NECESSARY TO BE DONE IN ORDER TO
FILE ALL AMENDMENTS AND POST-EFFECTIVE AMENDMENTS TO THIS REGISTRATION
STATEMENT, AND ANY AND ALL INSTRUMENTS OR DOCUMENTS FILED AS PART OF OR IN
CONNECTION WITH THIS REGISTRATION STATEMENT OR THE AMENDMENTS THERETO AND EACH
OF THE UNDERSIGNED DOES HEREBY RATIFY AND CONFIRM ALL THAT SAID ATTORNEY-IN-
FACT AND AGENT, OR HIS SUBSTITUTES, SHALL DO OR CAUSE TO BE DONE BY VIRTUE
HEREOF.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Lawrence M. Coss Chairman of the June 30, 1995
- ------------------------------------ Board and
LAWRENCE M. COSS President
(Principal
Executive Officer)
/s/ John W. Brink Vice President and June 30, 1995
- ------------------------------------ Treasurer
JOHN W. BRINK (Principal
Financial Officer)
and Director
/s/ Richard G. Evans Director June 30, 1995
- ------------------------------------
RICHARD G. EVANS
/s/ William B. Doepke Director June 30, 1995
- ------------------------------------
WILLIAM B. DOEPKE
/s/ Theodore P. Janulis Director June 30, 1995
- ------------------------------------
THEODORE P. JANULIS
II-7
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
GREEN TREE FINANCIAL CORPORATION
A DELAWARE CORPORATION
ARTICLE 1.
Name
The name of the Corporation is "Green Tree Financial Corporation."
ARTICLE 2.
Registered Office
The address of the registered office of the Corporation in Delaware is The
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and
the name of its registered agent at such address is The Corporation Company.
ARTICLE 3.
Purpose
The purpose of this Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware.
ARTICLE 4.
Authorized Shares
The aggregate number of shares which this Corporation shall have authority to
issue is 165,000,000 shares, divided into 150,000,000 common shares with a par
value of $0.01 per share, which shall be known as "Common Stock," and
15,000,000 preferred shares with a par value of $0.01 per share, which shall be
known as "Preferred Stock."
A. Common Stock. The holders of the Common Stock shall be entitled to
receive, when and as declared by the Board of Directors, out of earnings or
surplus legally available therefor, dividends payable either in cash, in
property, or in shares of the capital stock of the Corporation. Each holder of
record of the Common Stock shall have one vote for each share of Common Stock
standing in such holder's name on the books of the Corporation and entitled to
vote. The Common Stock shall have no special powers, preferences, or rights, or
qualifications, limitations, or restrictions thereof.
B. Preferred Stock. Shares of Preferred Stock may be issued from time to time
in one or more series as the Board of Directors may determine, as hereinafter
provided. The Board of Directors is hereby authorized, by resolution or
resolutions, to provide from time to time, out of the unissued shares of
Preferred Stock not then allocated to any series of Preferred Stock, for series
of the Preferred Stock. Before any shares of any such series of Preferred Stock
are issued, the Board of Directors shall fix and determine, and is hereby
expressly empowered to fix and determine, by resolution or resolutions, the
designations, powers, preferences, and relative participating, optional, and
other special rights, and the qualifications, limitations, and restrictions
thereof, of the shares of such series including, without limiting the
generality of the foregoing, any of the following provisions with respect to
which the Board of Directors shall determine to make affirmative provision:
B-1
<PAGE>
1. The designation and name of such series and the number of shares that
shall constitute such series;
2. The annual dividend rate or rates payable on shares of such series,
the date or dates from which such dividends shall commence to accrue, and
the dividend payment dates for such dividends;
3. Whether dividends on such series are to be cumulative or
noncumulative, and the participating or other special rights, if any, with
respect to the payment of dividends;
4. Whether such series shall be subject to redemption and, if so, the
manner of redemption, the redemption price or prices and the terms and
conditions on which shares of such series may be redeemed;
5. Whether such series shall have a sinking fund or other retirement
provisions for the redemption or purchase of shares of such series, and, if
so, the terms and amount of such sinking fund or other retirement
provisions and the extent to which the charges therefore are to have
priority over the payment of dividends on or the making of sinking fund or
other like retirement provisions for shares of any other series or over the
payment of dividends on the Common Stock;
6. The amounts payable on shares of such series on voluntary or
involuntary dissolution, liquidation, or winding up of the affairs of the
Corporation and the extent to which such payment shall have priority over
the payment of any amount on voluntary or involuntary dissolution,
liquidation, or winding up of affairs of the Corporation on shares of any
other series or on the Common Stock;
7. The terms and conditions, if any, on which shares of such series may
be converted into, or exchanged for, shares of any other series or of
Common Stock;
8. The extent of the voting powers, if any, of the shares of such series;
9. The stated value, if any, for the shares of such series, the
consideration for which shares of such series may be issued and the amount
of such consideration that shall be credited to the capital account; and
10. Any other preferences and relative, participating, optional, or other
special rights, and qualifications, limitations, or restrictions thereof,
of the shares of such series.
The Board of Directors is expressly authorized to vary the provisions
relating to the foregoing matters between the various series of Preferred
Stock.
All shares of Preferred Stock of any one series shall be identical in all
respects with all other shares of such series, except that shares of any one
series issued at different times may differ as to the dates from which
dividends thereon shall be payable, and if cumulative, shall cumulate.
Shares of any series of Preferred Stock that shall be issued and thereafter
acquired by the Corporation through purchase, redemption (whether through the
operation of a sinking fund or otherwise), conversion, exchange, or otherwise,
shall, upon appropriate filing and recording to the extent required by law,
have the status of authorized and unissued shares of Preferred Stock and may be
reissued as part of such series or as part of any other series of Preferred
Stock. Unless otherwise provided in the resolution or resolutions of the Board
of Directors providing for the issuance thereof, the number of authorized
shares of stock of any series of Preferred Stock may be increased or decreased
(but not below the number of shares thereof then outstanding) by resolution or
resolutions of the Board of Directors and appropriate filing and recording to
the extent required by law. In case the number of shares of any such series of
Preferred Stock shall be decreased, the shares representing such decrease
shall, unless otherwise provided in the resolution or resolutions of the Board
of Directors providing for the issuance thereof, resume the status of
authorized but unissued shares of Preferred Stock, undesignated as to series.
2
<PAGE>
ARTICLE 5.
No Cumulative Voting
There shall be no cumulative voting by the stockholders of the Corporation.
ARTICLE 6.
No Preemptive Rights
The stockholders of the Corporation shall not have preemptive rights to
subscribe for or acquire securities or rights to purchase securities of any
kind, class or series of the Corporation.
ARTICLE 7.
Stockholder Voting Requirement
Except as provided elsewhere in this Certificate of Incorporation, any
agreement for consolidation or merger with one or more foreign or domestic
corporations, amendment of this Certificate of Incorporation or dissolution of
this Corporation may be authorized by the affirmative vote of the holders of a
majority of the voting power of all shares entitled to vote.
ARTICLE 8.
Certain Business Combinations
A. In addition to an affirmative vote required by law or this Certificate of
Incorporation, and except as otherwise expressly provided in paragraph B of
this Article 8,
1. any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (a) an Interested Stockholder (as hereinafter
defined) or (b) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be, an
Affiliate or Associate (as such terms are hereinafter defined) of an
Interested Stockholder, or
2. any sale, lease, exchange, mortgage, pledge, grant of a security
interest, transfer, or other disposition (in one transaction or a series of
transactions), other than in the ordinary course of business, to or with
(a) an Interested Stockholder or (b) any other person (whether or not
itself an Interested Shareholder) which is, or after such sale, lease,
exchange, mortgage, pledge, grant of a security interest, transfer, or
other disposition would be, an Affiliate or Associate of an Interested
Stockholder, directly or indirectly, of all or any Substantial Part (as
hereinafter defined) of the assets of the Corporation (including, without
limitation, any voting securities of a Subsidiary) or any Subsidiary, or
both, or
3. the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities (except pursuant
to stock dividends, stock splits, or similar transactions which would not
have the effect of increasing the proportionate voting power of an
Interested Stockholder) of the Corporation or any Subsidiary, or both, to
(a) an Interested Stockholder or (b) any other person (whether or not
itself an Interested Stockholder) which is, or after such issuance or
transfer would be, an Affiliate or Associate of an Interested Stockholder,
or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate or Associate of an Interested Stockholder, or
5. any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
3
<PAGE>
transaction (whether or not with or into or otherwise involving an
Interested Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any Subsidiary
directly or indirectly beneficially owned by (a) an Interested Stockholder
or (b) any other person (whether or not itself an Interested Stockholder)
which is, or after such reclassification, recapitalization, merger, or
consolidation, or other transaction would be, an Affiliate or Associate of
an Interested Stockholder,
shall not be consummated unless such consummation shall have been approved by
the affirmative vote of the holders of at least 80% of the combined voting
power of the then outstanding shares of Voting Stock (as hereinafter defined),
voting together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law, in this Certificate of Incorporation, in
any agreement with any national securities exchange, or otherwise.
B. The provisions of paragraph (A) of this Article 8 shall not be applicable
to any particular Business Combination (as hereinafter defined) and such
Business Combination shall require only such affirmative vote as is required by
law and any other provision of this Certificate of Incorporation, if the
Business Combination shall have been approved by a majority of the Continuing
Directors (as hereinafter defined) or all of the following conditions shall
have been met:
1. The transaction constituting the Business Combination shall provide
for a consideration to be received by all holders of Common Stock in
exchange for all their shares of Common Stock and the aggregate amount of
the cash and the Fair Market Value (as hereinafter defined) as of the date
of the consummation of the Business Combination of consideration other than
cash to be received per share by holders of Common Stock in such Business
Combination shall be at least equal to the higher of the following:
(a) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common Stock beneficially owned
by an Interested Stockholder (i) within the two-year period immediately
prior to the Announcement Date (as hereinafter defined), (ii) within
the two-year period immediately prior to the Determination Date (as
hereinafter defined), or (iii) in the transaction in which it became an
Interested Stockholder, whichever is highest; or
(b) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is higher;
2. If the transaction constituting the Business Combination shall provide
for a consideration to be received by holders of any class or series of
outstanding Voting Stock other than Common Stock, the aggregate amount of
the cash and the Fair Market Value as of the date of the consummation of
the Business Combination of consideration other than cash to be received
per share by holders of shares of such class or series of Voting Stock
shall be at least equal to the highest of the following (it being intended
that the requirements of this subparagraph 2 shall be required to be met
with respect to every class and series of outstanding Voting Stock, whether
or not an Interested Stockholder has previously acquired any shares of a
particular class of Voting Stock):
(a) (if applicable) the highest per share price (including any brokerage
commissions, transfer taxes, and soliciting dealers' fees) paid in order to
acquire any shares of such class or series of Voting Stock beneficially
owned by an Interested Stockholder (i) within the two-year period
immediately prior to the Announcement Date, (ii) within the two-year period
immediately prior to the Determination Date, or (iii) in the transaction in
which it became an Interested Stockholder, whichever is highest; or
(b) the Fair Market Value per share of such class or series of Voting
Stock on the Announcement Date or the Determination Date, whichever is
higher; or
(c) (if applicable) the highest preferential amount per share to which
the holders of shares of such class or series of Voting Stock are entitled
in the event of any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation;
4
<PAGE>
3. The consideration to be received by holders of a particular class or
series of outstanding Voting Stock (including Common Stock) shall be in
cash or in the same form as was previously paid in order to acquire shares
of such class or series of Voting Stock which are beneficially owned by an
Interested Stockholder and, if an Interested Stockholder beneficially owns
shares of any class or series of Voting Stock which were acquired with
varying forms of consideration, the form of consideration for such class or
series of Voting Stock shall be either cash or the form used to acquire the
largest number of shares of such class or series of Voting Stock
beneficially owned by it. The price determined in accordance with
subparagraphs 1 and 2 of this paragraph shall be subject to appropriate
adjustment in the event of any recapitalization, stock dividend, stock
split, combination of shares, or similar event;
4. After an Interested Stockholder has become an Interested Stockholder
and prior to the consummation of such Business Combination:
(a) except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the regular date
therefor the full amount of any dividends (whether or not cumulative)
payable on any outstanding preferred stock;
(b) there shall have been (i) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock) other than as approved by a majority
of the Continuing Directors and (ii) an increase in such annual rate of
dividends as necessary to prevent any such reduction in the event of
any reclassification (including any reverse stock split),
recapitalization, reorganization, or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate is approved
by a majority of the Continuing Directors; and
(c) such Interested Stockholder shall not have become the beneficial
owner of any additional shares of Voting Stock except as part of the
transaction in which it became an Interested Stockholder;
5. After an Interested Stockholder has become an Interested Stockholder,
such Interested Stockholder shall not have received the benefit, directly
or indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges, or other financial assistance or any tax
credits or other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination or
otherwise; and
6. A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to the
stockholders of the Corporation, no later than the earlier of (a) 30 days
prior to any vote on the proposed Business Combination or (b) if no vote on
such Business Combination is required, 60 days prior to the consummation of
such Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or subsequent
provisions). Such proxy statement shall contain at the front thereof, in a
prominent place, any recommendations as to the advisability (or
inadvisability) of the Business Combination which the Continuing Directors,
or any of them, may have furnished in writing and, if deemed advisable by a
majority of the Continuing Directors, an opinion of a reputable investment
banking firm as to the fairness (or lack of fairness) of the terms of such
Business Combination, from the point of view of the holders of Voting Stock
other than an Interested Stockholder (such investment banking firm to be
selected by a majority of the Continuing Directors, to be furnished with
all information it reasonable requests and to be paid a reasonable fee for
its services upon receipt by the Corporation of such opinion).
C. For the purposes of this Article 8:
1. "Business Combination" shall mean any transaction which is referred to
in any one or more of subparagraphs 1 through 5 of paragraph (A) of this
Article 8.
2. "Voting Stock" shall mean stock of all classes and series of the
Corporation entitled to vote generally in the election of directors.
5
<PAGE>
3. "Person" shall mean any individual, firm, trust, partnership,
association, corporation, or other entity.
4. "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more than 10%
of the combined voting power of the then outstanding Voting Stock; or
(b) is an Affiliate or Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of more than 10% of
the combined voting power of the then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to the beneficial
ownership of any shares of Voting Stock which were at any time within
the two-year period immediately prior to the date in question
beneficially owned by an Interested Stockholder, unless such assignment
or succession shall have occurred pursuant to a Public Transaction (as
hereinafter defined) or any series of Public Transactions.
For the purposes of determining whether a person is an Interested
Stockholder, the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through application of subparagraph 6
below but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
5. "Public Transaction" shall mean any (a) purchase of shares offered
pursuant to an effective registration statement under the Securities Act of
1933 or (b) open-market purchase of shares on a national securities
exchange or in the over-the-counter market if, in either such case, the
price and other terms of sale are not negotiated by the purchaser and the
seller of the beneficial interest in the shares.
6. A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement,
or understanding or upon the exercise of conversion rights, exchange
rights, warrants, or options, or otherwise or (ii) the right to vote or
to direct the voting thereof pursuant to any agreement, arrangement or
understanding; or
(c) which is beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates
has any agreement, arrangement, or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting Stock.
7. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on January 1, 1995.
8. "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined In Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
January 1, 1995) is owned, directly or indirectly, by the Corporation;
provided, however, that, for purposes of the definition of Interested
Stockholder set forth in subparagraph 4, the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity security is
owned, directly or indirectly, by the Corporation.
9. "Continuing Director" shall mean (A) any member of the Board of
Directors of the Corporation who (1) is not an Affiliate or Associate of,
and not a nominee of, an Interested Stockholder, and (2) was a member of
the board prior to the time that any Interested Stockholder became an
Interested
6
<PAGE>
Stockholder, and (B) any successor of any such member who is not an
Affiliate or an Associate of, and not a nominee of, such Interested
Stockholder and is recommended to succeed any such member by a majority of
all such members then on the Board of Directors.
10. "Announcement Date" shall mean the date of the first public
announcement of the proposed Business Combination.
11. "Determination Date" shall mean the date on which an Interested
Stockholder became an Interested Stockholder.
12. "Fair Market Value" shall mean: (a) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date
in question of a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest
closing bid quotation or last reported sale price, whichever is applicable,
with respect to a share of such stock during the 30-day period preceding
the date in question on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date in question of
a share of such stock as determined by a majority of the Continuing
Directors in good faith; and (b) in the case of property other than cash or
stock, the fair market value of such property on the date in question as
determined by a majority of the Continuing Directors in good faith.
13. "Substantial Part" shall mean more than 30 percent of the fair market
value of the total assets of the Corporation as of the end of its most
recent fiscal year ending prior to the time the determination is being
made.
D. A majority of the Continuing Directors shall have the power and duty to
determine for the purposes of this Article 8, on the basis of information known
to them after reasonable inquiry, all facts necessary to determine compliance
with this Article 8, including, without limitation, (1) whether a person is an
Interested Stockholder, (2) the number of shares of Voting Stock beneficially
owned by any person, (3) whether a person is an Affiliate or Associate of
another, (4) whether the assets which are the subject of any Business
Combination constitute a Substantial Part of the assets of the Corporation or
the Subsidiary, or both, (5) whether the requirements of paragraph (B) of this
Article 8 have been met, and (6) such other matters with respect to which a
determination is required under this Article 8. The good faith determination of
a majority of the Continuing Directors on such matters shall be conclusive and
binding for all purposes of this Article 8.
E. Nothing contained in this Article 8 shall be construed to relieve an
Interested Stockholder from any fiduciary obligation imposed by law.
F. Notwithstanding any other provisions of this Certificate of Incorporation
or the Bylaws of the Corporation or the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or the Bylaws of the
Corporation, the affirmative vote of the holders of at least 80% of the
combined voting power of the then outstanding Voting Stock, voting as a single
class, shall be required to amend, alter, adopt any provision inconsistent with
or repeal this Article 8.
ARTICLE 9.
Purchases of Stock of the Corporation
A. Except as otherwise expressly provided in this Article 9, the Corporation
may not purchase any shares of Common Stock at a per-share price in excess of
the Fair Market Price (as hereinafter defined) as of the time of such purchase
from a person known by the Corporation to be a Substantial Stockholder (as
hereinafter
7
<PAGE>
defined), unless such purchase has been approved by the affirmative vote of the
holders of at least two-thirds of the shares of Common Stock voted thereon held
by Disinterested Stockholders (as hereinafter defined). Such affirmative vote
shall be required notwithstanding the fact that no vote may be required or that
a lesser percentage may be specified by law, in this Certificate of
Incorporation or in any agreement with any national securities exchange or
otherwise.
B. The provisions of this Article 9 shall not apply to (1) any purchase
pursuant to an offer to purchase which is made on the same terms and conditions
to the holders of all of the outstanding shares of Common Stock, (2) any open
market purchase that constitutes a Public Transaction (as hereinafter defined).
C. For the purposes of this Article 9:
1. The terms "Person", "Public Transaction", "Beneficial Owner",
"Affiliate", and "Associate" shall have the meanings given to them in
Article 8 of this Certificate of Incorporation.
2. "Substantial Stockholder" shall mean any person (other than any
employee benefit plan or trust of the Corporation or any similar entity)
who or which is the beneficial owner of shares of Common Stock constituting
more than 10% of the combined voting power of the then outstanding Common
Stock, and who or which acquired beneficial ownership of any such shares
within the two-year period immediately prior to the date on which the
Corporation purchases any such shares.
For the purposes of determining whether a person is a Substantial
Stockholder, the number of shares of Common Stock deemed to be outstanding
shall include shares deemed owned through application of subparagraph 5
below but shall not include any other shares of Common Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
3. "Disinterested Stockholders" shall mean those holders of Common Stock
who are not Substantial Stockholders.
4. "Fair Market Price" shall mean the highest closing sale price on the
Composite Tape for New York Stock Exchange-Listed Stocks during the 30-day
period immediately preceding the date in question of a share of Common
Stock or, if such stock is not quoted on the Composite Tape, on the New
York Stock Exchange or, if such stock is not listed on such Exchange, on
the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation
or last reported sale price, whichever is applicable, with respect to a
share of such stock during the 30-day period preceding the date in question
on the National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or, if no such quotations are
available, the fair market value on the date in question of a share of such
stock as determined by a majority of the Board of Directors in good faith.
5. A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates of Associates
beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates of Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement,
or understanding or upon the exercise of conversion rights, exchange
rights, warrants, or options, or otherwise or (ii) the right to vote or
to direct the voting thereof pursuant to any agreement, arrangement or
understanding; or
(c) which is beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates
has any agreement, arrangement, or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting Stock.
8
<PAGE>
D. A majority of the Board of Directors shall have the power and duty to
determine for the purposes of this Article 9, on the basis of information known
to them after reasonable inquiry, all facts necessary to determine compliance
with this Article 9, including without limitation (1) whether a person is a
Substantial Stockholder, (2) the number of shares of Common Stock beneficially
owned by any person, (3) whether a person is an Affiliate or Associate of
another, (4) whether a price is in excess of the Fair Market Price, (5) whether
a purchase constitutes a Public Transaction and (6) such other matters with
respect to which a determination is required under this Article 9. The good
faith determination of a majority of the Board of Directors on such matters
shall be conclusive and binding for all purposes of this Article 9.
E. Nothing contained in this Article 9 shall be construed to relieve a
Substantial Stockholder from any fiduciary obligation imposed by law.
F. Notwithstanding any other provisions of this Certificate of Incorporation
or the Bylaws of the Corporation or the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or the Bylaws of the
Corporation, the affirmative vote of the holders of at least 80% of the
combined voting power of the then outstanding voting stock, voting as a single
class, shall be required to amend, alter, adopt any provision inconsistent
with, or repeal this Article 9.
ARTICLE 10.
Directors
A director may be removed by the holders of the majority of shares then
entitled to vote at an election of directors, with or without cause.
ARTICLE 11.
Stockholders' Actions
No action shall be taken by the stockholders of the Corporation except at an
annual or special meeting of stockholders called in accordance with the Bylaws,
and no action shall be taken by the stockholders by written consent.
ARTICLE 12.
Bylaws
The Board of Directors shall have the power to adopt, amend or repeal the
Bylaws of this Corporation, subject to the power of the shareholders to adopt,
amend, or repeal such bylaws. Bylaws fixing the number of directors or their
classifications, qualifications, or terms of office, or prescribing procedures
for removing directors or filling vacancies in the Board may be adopted,
amended or repealed only by (i) the Board of Directors, to the extent permitted
by law, or (ii) the affirmative vote of the holders of 80% of the combined
voting power of the then outstanding voting stock of this Corporation, voting
as a single class, or such lesser percentage of the outstanding voting stock as
may from time to time be provided in such Bylaws. Notwithstanding any other
provisions of this Certificate of Incorporation or the Bylaws of the
Corporation or the fact that a lesser percentage may be specified by law, this
Certificate of Incorporation or the Bylaws of the Corporation, the affirmative
vote of the holders of at least 80% of the combined voting power of the then
outstanding voting stock, voting as a single class, shall be required to amend,
alter, adopt any provision inconsistent with or repeal this Article 12.
9
<PAGE>
ARTICLE 13.
Limitation of Directors' Liability
A Director of this Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its shareholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law; (iii) for the payment of an improper dividend or
improper repurchase of the Corporation's stock under Section 174 of the General
Corporation Law of the State of Delaware; (iv) for any transaction from which
the Director derived an improper personal benefit. If the General Corporation
Law of the State of Delaware is hereafter amended to authorize the further
elimination or limitation of the liability of directors, then the liability of
a director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be limited to the fullest extent permitted by
the amended General Corporation Law. Any repeal or modification of the
foregoing provisions of this Article 13 by the shareholders of the Corporation
shall be prospective only and shall not adversely affect any right or
protection of a Director of the Corporation existing at the time of such repeal
or modification.
ARTICLE 14.
Incorporator
The name and the mailing address of the sole incorporator is:
Name
Drew S. Backstrand
Mailing Address
Green Tree Financial Corporation
300 Landmark Towers
St. Paul, MN 55102-1637
In Witness Whereof, this Certificate has been subscribed this 21st day of
March, 1995 by the undersigned who affirms that the statements made herein are
true and correct.
/s/ Drew S. Backstrand
-------------------------------------
Drew S. Backstrand
Sole Incorporator
10
<PAGE>
Exhibit 3.1c
ARTICLES OF MERGER
OF
GREEN TREE FINANCIAL CORPORATION,
a Minnesota corporation
INTO
GREEN TREE FINANCIAL CORPORATION,
a Delaware corporation
Pursuant to Section 302A.615 of the Minnesota Statutes, as amended, Green
Tree Financial Corporation, a corporation organized under the laws of the State
of Minnesota (the "Merging Corporation") which is being merged into Green Tree
Financial Corporation, a corporation organized under the laws of the State of
Delaware (the "Surviving Corporation"), hereby executes, with the Surviving
Corporation, the following Articles of Merger:
1. The Plan of Merger, attached hereto as Exhibit A (the "Plan of
Merger"), was approved by resolution of the board of directors of the Merging
Corporation as of April 8, 1995, and by resolution of the shareholders of the
Merging Corporation adopted as of May 17, 1995, and was approved by combined
resolutions of the shareholder and board of directors of the Surviving
Corporation as of June 26, 1995.
2. The Plan of Merger was approved in accordance with Chapter 302A of the
Minnesota Statutes.
IN WITNESS WHEREOF, the undersigned corporations have caused these Articles
of Merger to be executed in their respective corporate names by the duly
authorized officers of each of the corporations as of this 28th day of June,
1995.
<PAGE>
GREEN TREE FINANCIAL CORPORATION,
a Minnesota Corporation
By /s/ Richard G. Evans
------------------------
Name Richard G. Evans
------------------
Its Secretary
------------------
GREEN TREE FINANCIAL CORPORATION,
a Delaware Corporation
By /s/ Richard G. Evans
------------------------
Name Richard G. Evans
------------------
Its Secretary
------------------
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
Agreement and Plan of Merger and Reorganization, dated as of April 10, 1995,
between Green Tree Financial Corporation, a Minnesota corporation ("Green
Tree"), and Green Tree Financial Corporation, a Delaware corporation and a
wholly-owned subsidiary of Green Tree (the "Surviving Corporation").
Whereas, Green Tree, as of the date hereof, has authority to issue
165,000,000 shares of capital stock of which 150,000,000 are designated as
common shares, $.01 par value, and 15,000,000 shares are designated as
Preferred Shares, $.01 par value (the "Green Tree Preferred") and of which, as
of the date hereof, 68,210,085 shares of Green Tree Common Stock are issued and
outstanding, and no shares of Green Tree Preferred are issued and outstanding;
and
Whereas, the Surviving Corporation, as of the date hereof, has authority to
issue 165,000,000 shares of capital stock, of which 150,000,000 shall be
designated Common Shares, $.01 par value, and of which 15,000,000 shall be
designated Preferred Shares, $.01 par value (the "Surviving Corporation
Preferred"); and
Whereas, as of the date hereof, 100 shares of the Surviving Corporation
Common Stock are issued and outstanding and held by Green Tree and no shares of
the Surviving Corporation Preferred are issued and outstanding; and
Whereas, Green Tree and the Surviving Corporation desire that Green Tree
merge with and into the Surviving Corporation and that the Surviving
Corporation shall continue as the Surviving Corporation in such merger, upon
the terms and subject to the conditions set forth herein and in accordance with
the laws of the State of Delaware and the laws of the State of Minnesota; and
Whereas, the respective Boards of Directors of Green Tree and the Surviving
Corporation have approved this Agreement and directed that it be submitted to a
vote of their stockholders.
Now, Therefore, in consideration of the mutual agreements and covenants set
forth herein, the parties hereto agree to merge as follows:
ARTICLE 1
Merger
1.1 Merger. Subject to the terms and conditions of this Agreement, Green Tree
shall be merged with and into the Surviving Corporation (the "Merger") in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL") and the Business Corporation Act of the State of Minnesota (the
"MBCA"), the separate existence of Green Tree shall cease and the Surviving
Corporation shall be the surviving corporation and continue its corporate
existence under the laws of the State of Delaware.
1.2 Effect of the Merger. At the Effective Time of the Merger (as hereinafter
defined), the Surviving Corporation shall possess all the rights, privileges,
immunities and franchises, of a public as well as of a private nature, of each
of Green Tree and the Surviving Corporation; all property, real, personal and
mixed, and all debts due on any account, including subscriptions for shares,
and all other choses in action, and every other interest of or belonging to or
due to each of Green Tree and the Surviving Corporation shall vest in the
Surviving Corporation without any further act or deed; the title to any real
estate or any interest therein vested in Green Tree shall not revert nor in any
way become impaired by reason of the Merger; the Surviving Corporation shall be
responsible and liable for all the liabilities and obligations of each of Green
Tree and the Surviving Corporation; a claim of or against or a pending
proceeding by or against Green Tree or the
A-1
<PAGE>
Surviving Corporation may be prosecuted as if the Merger had not taken place,
or the Surviving Corporation may be substituted in the place of Green Tree; and
neither the rights of creditors nor any liens upon the property of Green Tree
or the Surviving Corporation shall be impaired by the Merger.
1.3 Effective Time of the Merger. The Merger shall become effective as of the
date and time (the "Effective Time of the Merger") the following actions are
completed: (a) this Agreement or an appropriate certificate of merger is filed
in accordance with Section 252 of the DGCL; and (b) appropriate articles of
merger are filed in accordance with Sections 302A.611, 302A.613 and 302A.641 of
the MBCA.
ARTICLE 2
Name, Articles of Incorporation, Bylaws,
Directors and Officers of the Surviving Corporation
2.1 Name of Surviving Corporation. The name of the Surviving Corporation
shall be "Green Tree Financial Corporation."
2.2 Certificate of Incorporation. The Certificate of Incorporation of the
Surviving Corporation shall be the certificate of incorporation of the
Surviving Corporation from and after the Effective Time of the Merger until
amended thereafter as provided therein or by law.
2.3 Bylaws. The Bylaws of the Surviving Corporation shall be the Bylaws of
the Surviving Corporation from and after the Effective Time of the Merger until
amended thereafter as provided therein or by law.
2.4 Directors and Officers. The directors and officers of Green Tree at the
Effective Time of the Merger shall be the directors and officers, respectively,
of the Surviving Corporation from and after the Effective Time of the Merger
and shall hold office in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation until the expiration of the terms to which
they were elected to serve as directors and officers of Green Tree and until
their successors are duly elected and qualified.
ARTICLE 3
Conversion and Exchange of Certificates
3.1 Conversion. At the Effective Time of the Merger, each of the following
transactions shall be deemed to occur simultaneously:
(a) Each share of Green Tree Common Stock (other than shares as to which
the holder thereof has properly exercised appraisal rights under Minnesota
law) issued and outstanding immediately prior to the Effective Time of the
Merger shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and become one validly issued, fully
paid and non-assessable share of the Surviving Corporation Common Stock.
The shares of Green Tree Common Stock so converted shall cease to exist as
such and shall exist only as shares of the Surviving Corporation Common
Stock.
(b) Each stock option to purchase shares of Green Tree Common Stock
granted by Green Tree or any of its subsidiaries under any of the stock
option or stock purchase plans of Green Tree and outstanding immediately
prior to the Effective Time of the Merger shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into
and become a stock option to purchase, upon the same terms and conditions,
the number of shares of the Surviving Corporation Common Stock which is
equal to the number of shares of Green Tree Common Stock which the optionee
would have received had he exercised his option or right in full
immediately prior to the Effective Time of the Merger (whether or not such
option or right was then exercisable). The exercise price per share under
each of such options or warrants shall be equal to the exercise price per
share thereunder immediately prior to the Effective Time of the Merger.
A-2
<PAGE>
(c) Each share of the Surviving Corporation Common Stock issued and
outstanding immediately prior to the Effective Time of the Merger and held
by Green Tree, without any action on the part of Green Tree or any other
person, shall be canceled, and no shares of the Surviving Corporation or
other securities of the Surviving Corporation shall be issued or other
consideration paid in respect thereof.
3.2 Exchange of Certificates.
(a) From and after the Effective Time of the Merger, each holder of an
outstanding certificate which immediately prior to the Effective Time of
the Merger represented shares of Green Tree Common Stock shall be entitled
to receive in exchange therefor, upon surrender thereof to the transfer
agent designated by the Surviving Corporation, a certificate or
certificates representing the number of shares of the Surviving Corporation
Common Stock into which such holder's shares of Green Tree Common Stock
were converted.
(b) If any certificate for shares of the Surviving Corporation capital
stock is to be issued in a name other than that in which the certificate
for shares of Green Tree capital stock surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the certificate
so surrendered shall be properly endorsed and otherwise in proper form for
transfer and the person requesting such exchange shall pay any transfer and
other taxes required by reason of the issuance of certificates for such
shares of the Surviving Corporation capital stock in a name other than that
of the registered holder of the certificate surrendered, or shall establish
to the satisfaction of the Surviving Corporation or its agent that such tax
has been paid or is not applicable. Notwithstanding the foregoing, no party
hereto shall be liable to a holder of shares of Green Tree capital stock
for any shares of the Surviving Corporation capital stock or dividends or
distributions thereon delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
ARTICLE 4
Employee Benefit and Compensation Plans
At the Effective Time of the Merger, any employee benefit plan or incentive
compensation plan, including any stock option plan, to which Green Tree is then
a party shall be assumed by, and continue to be the plan of the Surviving
Corporation. To the extent any employee benefit plan or incentive compensation
plan of Green Tree or any of its subsidiaries provides for the issuance or
purchase of, or otherwise relates to, Green Tree capital stock, from and after
the Effective Time of the Merger such plan shall be deemed to provide for the
issuance or purchase of, or otherwise to relate to, the Surviving Corporation
capital stock.
ARTICLE 5
Conditions
Consummation of the Merger is subject to the satisfaction at or prior to the
Effective Time of the Merger of the following conditions:
5.1 Green Tree Stockholder Approval. This Agreement and the Merger shall have
been adopted and approved by the stockholders of Green Tree in accordance with
the applicable provisions of the Minnesota Business Corporation Act.
5.2 The Surviving Corporation Stockholder Approval. This Agreement and the
Merger shall have been adopted and approved by Green Tree as the holder of all
the outstanding shares of the Surviving Corporation capital stock prior to the
Effective Time of the Merger.
5.3 Consents, etc. Any and all consents, permits, authorizations, approvals
and orders deemed in the sole discretion of Green Tree to be material to the
consummation of the Merger shall have been obtained.
A-3
<PAGE>
ARTICLE 6
General
6.1 Termination and Abandonment. This Agreement may be terminated and the
Merger and other transactions herein provided for abandoned at any time prior
to the Effective Time of the Merger, whether before or after adoption and
approval of this Agreement by the stockholders of Green Tree, by action of the
Board of Directors of Green Tree, if the Board of Directors of Green Tree
determines that the consummation of the transactions provided for herein would
not, for any reason, be in the best interests of Green Tree and its
stockholders. In the event of termination of this Merger Agreement, this Merger
Agreement shall become void and of no effect and there shall be no liability on
the part of either Green Tree or the Surviving Corporation or their respective
Boards of Directors or shareholders, except that Green Tree shall pay all
expenses incurred in connection with the Merger or in respect of this Merger
Agreement or relating thereto.
6.2 Amendment. This Agreement may be amended at any time prior to the
Effective Time of the Merger with the mutual consent of the Boards of Directors
of Green Tree and the Surviving Corporation; provided, however, that after it
has been adopted by the stockholders of Green Tree, this Agreement may not be
amended in any manner which, in the judgment of the Board of Directors of Green
Tree, would have a material adverse effect on the rights of such stockholders
or in any manner not permitted under applicable law; provided further, however,
that any amendment of this Agreement after its adoption by the sole stockholder
of the Surviving Corporation shall require the prior approval of such
stockholder.
6.3 Deferral. Consummation of the transactions herein provided for may be
deferred by the Board of Directors of Green Tree for a reasonable period of
time if the Board of Directors or officer determines that such deferral would
be, for any reason, in the best interests of Green Tree and its stockholders.
6.4 Headings. The headings set forth herein are inserted for convenience or
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
6.5 Counterparts. This Agreement may be executed in two counterparts, each of
which shall constitute an original, and all of which, when taken together,
shall constitute one and the same instrument.
6.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota without giving effect to the
principles of conflicts of law thereof, except to the extent the laws of the
State of Delaware are applicable to the Surviving Corporation in respect of the
Merger, in which case the laws of the State of Delaware shall apply without
giving effect to the principles of conflicts of law thereof.
A-4
<PAGE>
In Witness Whereof, each of the parties hereto has caused this Agreement to
be executed on its behalf and attested by its officers hereunto duly
authorized, all as of the day and year first above written.
Green Tree Financial Corporation
A Minnesota Corporation
By /s/ Robert D. Potts
----------------------------------
Its President and Chief Operating
Officer
Attest:
/s/ Richard G. Evans
- -------------------------------
Secretary
Green Tree Financial Corporation
A Delaware Corporation
By /s/ Robert D. Potts
----------------------------------
Its President and Chief Operating
Officer
Attest:
/s/ Richard G. Evans
- -------------------------------
Secretary
A-5
<PAGE>
EXHIBIT 3.2
BYLAWS
OF
GREEN TREE FINANCIAL CORPORATION,
A DELAWARE CORPORATION
ARTICLE I
Offices, Corporate Seal
Section 1.01. Offices. The address of the registered office of the
Corporation and the name of its registered agent, if any, at the address of the
registered office shall be set forth in the Certificate of Incorporation or in
the latest statement filed with the Secretary of State. The Corporation may
have such other offices, within or without the State of Delaware, as the Board
of Directors shall, from time to time, determine.
Section 1.02. Corporate Seal. The corporate seal shall be circular in form
and shall have inscribed thereon the name of the Corporation and the word
"Delaware" and the words "Corporate Seal". It shall not be necessary for the
Corporation to use the corporate seal on any document.
ARTICLE II
Meetings of Stockholders
Section 2.01. Place of Meeting. Meetings of the stockholders of the
Corporation shall be held at such place, either within or without the state of
Delaware, as may be designated from time to time by the Board of Directors, or
if not so designated, then at the office of the Corporation required to be
maintained pursuant to Section 1.01 hereof.
Section 2.02. Annual Meetings. The Corporation shall hold meetings of the
stockholders on an annual basis on such day or date and at such time and place
as the Board of Directors shall determine by resolution. At annual meetings,
the stockholders shall elect qualified successors for directors whose terms are
expiring and may transact such other business as may be appropriate for
stockholders' action.
Section 2.03. Special Meetings. The Corporation may hold special meetings of
the stockholders at any time and for any purpose. The Chief Executive Officer,
the Chief Financial Officer, two or more directors, or a stockholder or
stockholders holding at least 10% of the voting power of all shares entitled to
vote may call a special meeting. A stockholder or stockholders holding 10% or
more of the voting power of all shares entitled to vote may demand a special
meeting of the stockholders by written notice of demand given to the Chief
Executive Officer or Chief Financial Officer of the Corporation and containing
the purposes of the meeting. If the Board of Directors fails to cause a special
meeting to be called and held as required by this Section 2.03, the stockholder
or stockholders making the demand may call the meeting by giving notice as
required by Section 2.05, all at the expense of the Corporation. The
Corporation shall hold special meetings on the date and at the time and place
fixed by the Chief Executive Officer or the Board of Directors, except that the
Corporation shall hold a special meeting called by or at demand of a
stockholder or stockholders in the county where the Principal Executive Office
is located. The business transacted at a special meeting shall be limited to
the purposes as stated in the notice of the meeting. Any business transacted at
a special meeting that is not included in the purposes stated in the notice of
the meeting is voidable by or on behalf of the Corporation, unless all
stockholders have waived notice of the meeting.
Section 2.04. Record Date. The Board of Directors shall fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors,
<PAGE>
and which record date shall not be more than sixty days nor less than ten days
preceding the date of any meeting of stockholders as the record date for the
determination of the stockholders entitled to notice of, and to vote at, such
meeting. When a record date is so fixed, only stockholders as of that date are
entitled to notice of and permitted to vote at that meeting of stockholders. In
the absence of action by the Board of Directors, such record date shall be the
forty-fifth day prior to a meeting, unless such forty-fifth day is not a
business day in which event the record date shall be the last business day
immediately prior to such forty-fifth day.
Section 2.05. Notice of Meeting. Except as otherwise specified in Section
2.07 or required by law, notice of each meeting of the stockholders stating the
date, time, and place and, in the case of a special meeting, the purpose or
purposes, shall be given at least ten days and not more than sixty days prior
to the meeting to every holder of shares entitled to vote at such meeting.
Section 2.06. Quorum. The holders of a majority of the voting power of the
shares entitled to vote at a meeting, whether present in person or by proxy,
shall constitute a quorum for the transaction of business at any annual or
special meeting. If a quorum is present when a duly called or held meeting is
convened, the stockholders present may continue to transact business until
adjournment, even though the withdrawal of a number of stockholders originally
present leaves less than the proportion or number otherwise required for a
quorum.
Section 2.07. Adjourned Meetings. Those present at a meeting may adjourn the
meeting from time to time, whether or not a quorum is present. The Corporation
shall not be required to give notice of the reconvened meeting to the
stockholders if the date, time, and place of the reconvened meeting is
announced at the meeting being adjourned; provided, however, that if the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. At reconvened meetings at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
noticed.
Section 2.08. Act of the Stockholders. At any meeting of stockholders, the
stockholders shall take action by the affirmative vote of the holders of a
majority of the voting power of the shares present and entitled to vote, except
to the extent otherwise required by Delaware General Corporation Law. In the
event the Corporation shall have outstanding a class or series of shares that
are entitled to vote as a class or series by Delaware General Corporation Law,
the Certificate of Incorporation, these Bylaws, or the terms of such shares,
the matter being voted upon must also receive the affirmative vote of the
holders of the same proportion of the shares of that class or series as is
required pursuant to the preceding sentence.
Section 2.09. Voting. At each meeting of the stockholders every stockholder
having the right to vote shall be entitled to vote either in person or by proxy
meeting the requirements of Section 2.10. Unless otherwise provided in the
Certificate of Incorporation, or according to the terms of the shares, each
stockholder shall have one vote for each share having voting power registered
in such stockholder's name on the books of the Corporation. Holders of shares
entitled to vote may vote any portion of the shares in any way the stockholder
chooses. If a stockholder votes without designating the proportion or number of
shares voted in a particular way, the stockholder is deemed to have voted all
of the shares in that way. Jointly owned shares may be voted by any joint owner
unless the Corporation receives written notice from any one of them denying the
authority of that person to vote the shares. Upon the demand of any
stockholder, the vote upon any question before the meeting shall be by ballot.
Section 2.10. Proxies. A stockholder may cast or authorize the casting of a
vote by filing a written appointment of a proxy with an officer of the
Corporation at or before the meeting at which the appointment is to be
effective. No proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. An appointment of a proxy
for shares held jointly by two or more stockholders
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is valid if signed by any one of them, unless the Corporation receives from any
one of those stockholders written notice either denying the authority of that
person to appoint a proxy or appointing a different proxy. To be valid, all
proxies must meet the requirements of, and shall be governed by, Delaware
General Corporation Law.
Section 2.11. Waiver Of Notice. Any stockholder may waive notice of any
regular or special meeting, either before, at, or after such meeting, orally or
in a writing signed by such stockholder or a representative entitled to vote
the share, of such stockholder. Attendance by a stockholder at any meeting of
stockholders is a waiver of notice of such meeting, except where the
stockholder objects at the beginning of the meeting to the transaction of
business because the meeting is not lawfully called or convened or objects
before a vote on an item of business because the item may not lawfully be
considered at that meeting and the stockholder does not participate in the
consideration of the item at that meeting.
Section 2.12. List of Stockholders. The Secretary shall prepare and make, at
least 10 days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at said meeting, arranged in alphabetical order,
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 10 days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not specified, at the place where the
meeting is to be held. The list shall be produced and kept at the time and
place of meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
ARTICLE III
Directors
Section 3.01. General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors.
Section 3.02. Number, Qualification and Term of Office. The number of
directors shall not be less than three nor more than eleven and shall be
established by resolution of the Board of Directors. Directors need not be
stockholders. The number of directors may be increased beyond eleven or
decreased below three from time to time by a resolution adopted by the
stockholders of at least 80% of the shares of the Corporation entitled to vote
or, to the extent permitted by law, by the Board of Directors. The directors
shall be divided into three classes, as equal in number as possible. Directors
in the first class (currently two directors) shall serve until the 1996 regular
meeting of stockholders; directors in the second class (currently two
directors) shall serve until the 1997 regular meeting of stockholders; and
directors in the third class (currently two directors) shall serve until the
1998 regular meeting of stockholders. At each regular meeting of the
stockholders each director elected to succeed a director whose term has expired
shall hold office until the third succeeding regular meeting of the
stockholders after such director's election and until such directors successor
has been duly elected and qualified, or until the earlier death, resignation,
removal or disqualification of such director. In case of any increase or
decrease in the number of directors, the increase or decrease shall be
distributed among the several classes as equally as possible as shall be
determined by the Board of Directors or by the stockholders of at least 80% of
the shares of the Corporation entitled to vote; provided that any increase
shall first be applied to the class of directors having the shortest unexpired
term and any decrease shall first be applied to the class of directors having
the longest unexpired term.
Notwithstanding the foregoing, whenever the holders of any one or more series
of Preferred Stock issued by the Corporation pursuant to Article 4 of the
Certificate of Incorporation of the Corporation shall have the right, voting
separately as a class or by series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be
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governed by the terms of the series of Preferred Stock applicable thereto, and
such directors so elected shall not be divided into classes pursuant to this
Section 3.02 or Article III unless expressly provided by the terms of the
applicable series.
(a) Amendment. No provision of this Section 3.02 of Article III may be
amended or rescinded, except by the affirmative vote of the stockholders of
at least 80% of the outstanding shares of the Corporation entitled to vote,
or by the Board of Directors, to the extent permitted by law.
Section 3.03. Board Meetings. The Board of Directors may hold meetings from
time to time at such time and place as the notice of such meeting may designate
or at the place announced if no notice is required. The Board of Directors
shall meet each year immediately after the annual meeting of the stockholders
at the same place. No notice of any kind to either old or new members of the
Board of Directors shall be necessary for such annual meeting or for any
regular meeting of the directors fixed from time to time by resolution of a
majority of the Board of Directors.
Section 3.04. Calling Meetings, Notice. Meetings of the Board of Directors
may be called by the Chief Executive Officer, by giving at least twenty-four
hours notice of the date, time and place thereof to each director by mail,
telephone, telegram or in person. If the date, time and place of a Board of
Directors meeting have been announced at a previous meeting of the Board of
Directors, no notice is required. Notice of an adjourned meeting need not be
given other than by announcement at the meeting at which adjournment is taken
of the date, time and place at which the meeting will be reconvened.
Section 3.05. Waiver of Notice. Any director may waive notice of any meeting
of the Board of Directors either before, at, or after such meeting orally or in
writing signed by such director. A director, by the director's attendance at
any meeting of the Board of Directors, shall be deemed to have waived notice of
such meeting, except when the director objects at the beginning of the meeting
to the transaction of business because the meeting is not lawfully called or
convened and does not participate thereafter in the meeting.
Section 3.06. Quorum. A majority of the directors holding office immediately
prior to a meeting of the Board of Directors shall constitute a quorum for the
transaction of business at such meeting.
Section 3.07. Conference Communications. Any or all directors may participate
in any meeting or conference of the Board of Directors, or of any duly
constituted committee thereof, by any means of communication through which the
directors may simultaneously hear each other during such meeting and
participation in a meeting pursuant to this Section shall constitute presence
in person at the meeting.
Section 3.08. Vacancies. Vacancies in the Board of Directors of this
Corporation occurring by reason of death, resignation, removal, or
disqualification shall be filled for the unexpired term by a majority of the
remaining directors, even though less than a quorum. Vacancies resulting from
newly created directorships may be filled by a majority vote of the remaining
directors. Each director elected to fill a vacancy shall hold office, subject
to provisions of these Bylaws, until a qualified successor is elected by the
stockholders at a regular or special meeting. The stockholders shall elect a
director to fill the remainder of any unexpired term for which a director has
been elected to fill a vacancy by the Board of Directors at their next regular
or special meeting. No provision of this Section 3.08 of Article III may be
amended or repealed except by the affirmative vote of the holders of at least
80% of the outstanding shares of the Corporation entitled to vote, or by the
Board of Directors, to the extent permitted by law.
Section 3.09. Removal. The affirmative vote of the stockholders holding at
least 80% of the shares entitled to vote at an election of directors may remove
any or all of the directors from office at any time with or without cause. In
the event that the Board of Directors or any one or more directors be so
removed, new directors shall be elected at the same meeting. A director named
by the Board of Directors to fill a vacancy may be removed from office at any
time, with or without cause, by the affirmative vote of the remaining directors
if the stockholders have not elected directors in the interim between the time
of the appointment to fill such vacancy and the time of the removal. No
provision of this Section may be amended or repealed except
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by the affirmative vote of the holders of at least 80% of the outstanding
shares of the Corporation entitled to vote, or by the Board of Directors, to
the extent permitted by law.
Section 3.10. Committees. A resolution approved by the affirmative vote of a
majority of the whole Board of Directors may establish committees having the
authority of the Board of Directors in the management of the business of the
Corporation to the extent provided in the resolution except for those powers
expressly reserved to the Board of Directors under Delaware law. No such
committee shall have this power or authority in reference to amending the
Certificate of Incorporation (except as otherwise permitted by law); adopting
an agreement of merger or consolidation under Sections 251 or 252 of the
Delaware General Corporation Law; recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets; recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution; or amending the bylaws of the Corporation. A
committee shall consist of one or more directors appointed by affirmative vote
of a majority of the whole Board of Directors. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the event of the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. A majority of
the members of the committee present at a meeting is a quorum for the
transactions of business, unless a larger or smaller proportion or number is
provided in the resolution establishing the committee.
Section 3.11. Committee of Disinterested Persons. Pursuant to the procedure
set forth in Section 3.10, the Board of Directors may establish a committee
composed of two or more disinterested directors or other disinterested persons
to determine whether it is in the best interests of the Corporation to pursue a
particular legal right or remedy of the Corporation and whether to cause the
dismissal or discontinuance of a particular proceeding that seeks to assert a
right or remedy on behalf of the Corporation. The committee, once established,
is not subject to the direction or control of, or termination by, the Board of
Directors. The vacancy on the committee may be filled by a majority of the
remaining committee members. The good faith determinations of the committee are
binding upon the Corporation and its directors, officers and stockholders. The
committee shall terminate when it issues a written report of its determination
to the Board of Directors.
Section 3.12 Written Action. Any action which might be taken at a meeting of
the Board of Directors, or any duly constituted committee thereof, may be taken
without a meeting if done in writing and signed by all of the directors or
committee members, unless the Articles provide otherwise, and such action need
not be approved by the stockholders.
Section 3.13. Nomination of Director Candidates. Nominations of candidates
for election to the Board of Directors of the Corporation at any annual meeting
of the shareholders may be made only by or at the direction of the Board of
Directors or by a shareholder entitled to vote at such annual meeting. All such
nominations, except those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, such notice must be received at the principal
executive offices of the Corporation not less than sixty days prior to the date
of such annual meeting and must set forth (i) the name, age, business address,
residence address and the principal occupation or employment of each nominee
proposed in such notice, (ii) the name and address of the shareholder giving
the notice as the same appears in the Corporation's stock register, (iii) the
number of shares of capital stock of the Corporation which are beneficially
owned by each such nominee and by such shareholder and (iv) such other
information concerning each such nominee as would be required soliciting
proxies for the election of such nominee. Such notice must also include a
signed consent of each such nominee to serve as a director of the Corporation,
if elected.
If the officer of the Corporation presiding at an annual meeting of the
shareholders determines that a director nomination was not made in accordance
with the foregoing procedures, such nomination shall be void and shall be
disregarded for all purposes.
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Section 3.14. Determination of Contested Elections. In the event that there
are more candidates for election to the Board of Directors at a meeting of the
shareholders than there are directors to be elected at such meeting (a
"Contested Election"), the vote for election of directors shall be by ballot
and the officer of the Corporation presiding at the meeting shall appoint two
persons, who need not be shareholders, to act as Inspectors of Election at such
meeting.
The Inspectors so appointed, before entering on the discharge of their
duties, shall take and subscribe on oath or affirmation faithfully to execute
the duties of Inspectors at such meeting with strict impartiality and according
to the best of their ability, and thereupon the Inspectors shall take charge of
the polls and after the balloting shall canvas the votes and determine in
accordance with law and make a certificate to the Corporation of the results of
the vote taken. No director or candidate for the office of director shall be
appointed an Inspector.
The nominees for election to the Board of Directors in a Contested Election
who are certified by the Inspectors as having been elected shall be deemed to
be duly elected and qualified upon the expiration of three business days
following the date of such certification, provided that, in the event any court
proceedings are commenced which challenge the results of such Contested
Election, such nominees shall not be deemed to be duly elected and qualified
until all such court proceedings, including appeals, shall have been finally
concluded.
ARTICLE IV
Officers
Section 4.01. Number and Designation. The Corporation shall have one or more
natural persons exercising the functions of the offices of Chief Executive
Officer and Chief Financial Officer. The Board of Directors may elect or
appoint such other officers or agents as it deems necessary for the operation
and management of the Corporation, with such powers, rights, duties, and
responsibilities as may be determined by the Board of Directors, including,
without limitation, a President, one or more Vice Presidents, a Secretary, a
Treasurer, and such assistant officers or other officers as may from time to
time be elected or appointed by the Board of Directors. Each such officer shall
have the powers, rights, duties and responsibilities set forth in these Bylaws
unless otherwise determined by the Board of Directors. Any number of offices
may be held by the same person.
Section 4.02. Chief Executive Officer. Unless provided otherwise by a
resolution adopted by the Board of Directors, the Chief Executive Officer: (a)
shall have general active management of the business of the Corporation, (b)
shall, when present, preside at all meetings of the stockholders, (c) shall see
that all orders and resolutions of the Board of Directors are carried into
effect; (d) shall sign and deliver in the name of the Corporation any deed,
mortgages, bonds, contracts or other instruments pertaining to the business of
the Corporation, except in cases in which the authority to sign and deliver is
required by law to be exercised by another person or is expressly delegated by
these Bylaws or the Board of Directors to some other officer or agent of the
Corporation; and (e) shall perform such other duties as, from time to time,
that may be assigned by the Board of Directors.
Section 4.03. Chief Financial Officer. Unless provided otherwise by a
resolution adopted by the Board of Directors, the Chief Financial Officer or
Treasurer: (a) shall cause to be kept accurate financial records, for the
Corporation; (b) shall cause to be deposited all monies, drafts, and checks in
the name of and to the credit of the Corporation in such banks, and
depositories as the Board of Directors shall designate from time to time; (c)
shall cause to be endorsed for deposit all notes, checks and drafts received by
the Corporation as ordered by the Board of Directors, making proper vouchers
therefore; (d) shall cause to be disbursed corporate funds and shall cause to
be issued checks and drafts in the name of the Corporation, as ordered by the
Board of Directors; (e) shall render to the Chief Executive Officer and the
Board of Directors, whenever
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requested, an account of all the transactions as Chief Financial Officer and of
the financial condition of the Corporation; and (f) shall perform such other
duties as may be prescribed by the Board of Directors or the Chief Executive
Officer from time to time.
Section 4.04. President. Unless otherwise determined by the Board of
Directors, the President shall be the Chief Executive Officer of the
Corporation. If an officer other than the President is designated Chief
Executive Officer, the President shall perform such duties as may from time to
time be assigned by the Board of Directors.
Section 4.05. Vice President. Each Vice President shall perform such duties
as may be prescribed from time to time by these Bylaws or by the Board of
Directors.
Section 4.06. Secretary. Unless provided otherwise by a resolution adopted by
the Board of Directors, the Secretary: (a) shall attend all meetings of the
stockholders and Board of Directors, and shall record all the proceedings of
such meetings in the minute book of the Corporation; (b) shall give proper
notice of meetings of stockholders and Board of Directors and other notices
required by law or these Bylaws, and (c) shall perform such other duties as
from time to time may be assigned by the Board of Directors.
Section 4.07. Treasurer. Unless otherwise determined by the Board of
Directors, the Treasurer shall be the Chief Financial Officer of the
Corporation. If an officer other than the Treasurer is designated Chief
Financial Officer, the Treasurer shall perform such duties as may from time to
time be assigned by the Board of Directors.
Section 4.08. Authority and Duties. In addition to the foregoing authority
and duties, all officers of the Corporation shall respectively have such
authority and perform such duties in the management of the business of the
Corporation as may be determined from time to time by the Board of Directors.
Unless prohibited by a resolution of the Board of Directors, an officer elected
or appointed by the Board of Directors may, without specific approval of the
Board of Directors, delegate some or all of the duties and powers of an office
to other persons.
Section 4.09. Removal and Vacancies. The Board of Directors may remove any
officer from office at any time, with or without cause, by a resolution
approved by the affirmative vote of a majority of the directors present. Such
removal, however, shall be without prejudice to the contract rights of the
person so removed. A vacancy in an office of the Corporation by reason of
death, resignation, removal, disqualification, or otherwise may, or in the case
of a vacancy in the office of the Chief Executive Officer or Chief Financial
Officer shall, be filled for the unexpired term by the Board of Directors.
Section 4.10. Compensation. The officers of this Corporation shall receive
such compensation for their services as may be determined by or in accordance
with resolutions of the Board of Directors.
ARTICLE V
Shares and Their Transfer
Section 5.01. Certificates for Shares. All shares of the Corporation shall be
certificated shares. Each holder of shares of the Corporation shall be entitled
to a certificate, to be in such form as shall be prescribed by the Board of
Directors, certifying the number of shares of the Corporation owned by such
stockholder. The certificates for such shares shall be numbered in the order in
which they shall be issued and shall be signed, in the name of the Corporation,
by the Chairman and Chief Executive Officer and by the Secretary or an
Assistant Secretary or by such officers as the Board of Directors may
designate. If the certificate is signed by a transfer agent or registrar, such
signatures of the corporate officers may be facsimiles, engraved or printed. A
certificate representing shares issued by this Corporation, if it is authorized
to issue shares of more than one class or series, shall set forth upon the face
or back of the certificate, or shall state that the
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Corporation will furnish to any stockholder upon request and without charge, a
full statement of the designations, preferences, limitations, and relative
rights of the shares of each class or series authorized to be issued, so far as
they have been determined, and the authority of the Board of Directors to
determine relative rights and preferences of subsequent classes or series.
Every certificate surrendered to the Corporation for exchange or transfer shall
be canceled, and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
canceled, except in cases provided for in Section 5.03.
Section 5.02. Transfer of Shares. Transfer of shares on the books of the
Corporation may be authorized only by the stockholder named in the certificate,
or the stockholder's legal representative, or the stockholder's duly authorized
attorney-in-fact, and upon surrender of the certificate or the certificates for
such shares. The Corporation may treat as the absolute owner of shares of the
Corporation the person or persons in whose name shares are registered on the
books of the Corporation. The Board of Directors may appoint one or more
transfer agents and registrars to maintain the share records of the Corporation
and to effect share transfers on its behalf.
Section 5.03. Loss of Certificates. Any stockholder claiming a certificate
for shares to be lost, stolen or destroyed shall make an affidavit of that fact
in such form as the Board of Directors shall require and shall, if the Board of
Directors so requires, give the Corporation a bond of indemnity in form, in an
amount, and with one or more securities satisfactory to the Board of Directors,
to indemnify the Corporation against any claim which may be made against it on
account of the reissue of such certificate, whereupon a new certificate may be
issued in the same tenor and for the same number of shares as the one alleged
to have been lost, stolen or destroyed.
ARTICLE VI
Dividends, Record Date
Section 6.01. Dividends. The Board of Directors shall have the authority, to
declare dividends and other distributions upon shares to the extent permitted
by law.
Section 6.02. Record Date. The Board of Directors may fix a date not
exceeding sixty days nor less than ten days preceding the date fixed for the
payment of any dividend as the record date for the determination of the
stockholders entitled to receive payment of the dividend and, in such case,
only shareholders of record on the date so fixed shall be entitled to receive
payment of such dividend.
ARTICLE VII
Corporate Records
Section 7.01. Share Register. The Corporation shall keep at the office of its
transfer agent a share register not more than one year old, containing the
names and addresses of the many stockholders and the number and classes of
shares held by each stockholder. The Corporation shall also keep at the office
of its transfer agent a record of the dates on which certificates or
transaction statements representing shares were issued.
Section 7.02. Other Records. The Corporation shall keep at the office where
its Chief Executive Officer maintains his principal office originals or copies
of: (a) records of all proceeding of stockholders for the last three years; (b)
records of all proceedings of the Board of Directors for the last three years;
(c) the Articles of Incorporation and all amendments currently in effect; (d)
the Bylaws and all amendments currently in effect; (e) financial statements;
(f) reports made to stockholders generally within the last three years; (g) a
statement
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of the names and usual business addresses of the directors and principal
officers; (h) voting trust agreements described in Section 218 of the Delaware
General Corporation Law and (i) such other documents, instruments and records
required by Delaware General Corporation Law.
ARTICLE VIII
Securities of Other Corporations
Section 8.01. Voting Securities Held by the Corporation. The Chief Executive
Officer shall have full power and authority on behalf of the Corporation (a) to
attend any meeting of security holders of other corporations in which the
Corporation may hold securities and to vote such securities on behalf of the
Corporation; (b) to execute any proxy for such meeting on behalf of the
Corporation; or (c) to execute a written action in lieu of a meeting of such
other corporation on behalf of this Corporation. At such meeting, the Chief
Executive Officer shall possess and may exercise any and all rights and powers
incident to the ownership of such securities that the Corporation possesses.
The Board of Directors or the Chief Executive Officer may, from time to time,
confer or delegate such powers to one or one or more other persons.
Section 8.02. Purchase and Sale of Securities. The Chief Executive Officer
shall have full power and authority on behalf of the Corporation to purchase,
sell, transfer or encumber any and all securities of any other corporation
owned by the Corporation, and may execute and deliver such documents as may be
necessary to effectuate such purchase, sale, transfer or encumbrance. The Board
of Directors or the Chief Executive Officer may, from time to time, confer or
delegate such power to one or more other persons.
ARTICLE IX
Indemnification of Certain Persons
Section 9.01. Right to Indemnification. 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 (hereinafter a "proceeding"), by reason of the fact that he or
she is or was a director or officer of the Corporation or is or was serving at
the request of the Corporation as a director or officer of another corporation
or of a partnership, joint venture, trust, or other enterprise, including
service with respect to an employee benefit plan (hereinafter an "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 permitted prior thereto), against all expense, 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 or officer and shall inure to
the benefit of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in paragraph (b) hereof 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 of the Corporation. The right to
indemnification conferred in this Section 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 (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her 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 only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"),
by or on behalf of such
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indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under this Section or otherwise.
Section 9.02. Right of Indemnitee to Bring Suit. If a claim under paragraph
(a) of this Section is not paid in full by the Corporation within sixty days
after a written claim has been received by the Corporation, except in the case
of a claim for an advancement of expenses, in which case the applicable period
shall be twenty 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
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and (ii) any suit by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking the Corporation shall be
entitled to recover such expenses upon a final adjudication that, the
indemnitee has not met the applicable standard of conduct set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit 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 its Board of Directors, independent legal counsel, or
its stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Section or otherwise shall be on the Corporation.
Section 9.03. Non-Exclusivity of Rights. The rights to indemnification and to
the advancement of expenses conferred in this Section shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Corporation's Certificate of Incorporation, these bylaws,
agreement, vote of stockholders or disinterested directors, or otherwise.
Section 9.04. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee, or agent of the
Corporation or subsidiary or related entity against any expense, liability, or
loss, whether or not the Corporation would have the power to indemnity such
person against such expense, liability, or loss under the Delaware General
Corporation Law.
Section 9.05. Indemnification of Directors, Officers, Employees, and Agents
of Subsidiaries and Related Entities and Employees and Agents of the
Corporation. The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and to the advancement
of expenses to any director, officer, employee, or agent of a subsidiary or
related entity of the Corporation or to any employee or agent of the
Corporation to the fullest extent of the provisions of this Section with
respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
Section 9.06. Amendment. Notwithstanding any other provisions of these
Bylaws, the Certificate of Incorporation of the Corporation or the fact that a
lesser percentage may be specified by law, by these Bylaws, or by the
Certificate of Incorporation of this Corporation, the affirmative vote of the
holders of at least 80% of the combined voting power of the then outstanding
voting stock, voting as a single class, shall be required to amend, alter,
adopt any provision inconsistent with, or repeal this Article IX.
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ARTICLE X
Fiscal Year
Section 10.01. The fiscal year of the Corporation shall begin on the 1st day
of January of each year and end on the 31st day of December.
ARTICLE XI
Amendments
Section 11.01. These Bylaws may be amended at any meeting of the Board of
Directors if notice of such proposed amendment shall have been given in the
notice of such meeting. Such authority in the Board of Directors is subject to
(a) the limitations imposed by the Delaware General Corporation Law, as now
enacted or hereafter amended, or other applicable law and (b) the power of the
stockholders to change or repeal such Bylaws by a majority vote (except to the
extent a greater percentage of stockholders shall be required by these Bylaws
or by the Certificate of Incorporation) of the stockholders present or
represented at any meeting of stockholders called for such purpose.
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