<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 1995
REGISTRATION NO. 33-63575
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
GREEN TREE FINANCIAL CORPORATION
(ORIGINATOR OF THE TRUSTS DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
41-1263905 (I.R.S. EMPLOYER IDENTIFICATION
NO.)
DELAWARE (STATE OR OTHER
JURISDICTION OF INCORPORATION OR
ORGANIZATION)
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
JOEL H. GOTTESMAN, ESQ.
1100 LANDMARK TOWERS
345 ST. PETER STREET
SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
CHARLES F. SAWYER, ESQ. DORSEY &
WHITNEY P.L.L.P. 220 SOUTH SIXTH
STREET MINNEAPOLIS, MINNESOTA
55402 (612) 340-2600
CATHY M. KAPLAN, ESQ. BROWN & WOOD ONE WORLD
TRADE CENTER NEW YORK, NEW YORK 10048 (212)
839-5531
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
--------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Asset Backed Securi-
ties.................. $400,000,000 100% $400,000,000 $80,144.83(2)
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Limited Guaranty of
Green Tree Financial
Corporation........... (3) (3) (3) (3)
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Of this amount, the Registrant has previously paid a filing fee of $344.83
with respect to $1,000,000 of the Asset-Backed Securities (calculated at
the rate of 1/29th of 1%) and is paying herewith an additional filing fee
of $79,800 with respect to $399,000,000 of the Asset-Backed Securities
(calculated at the rate of 1/50th of 1%).
(3) No additional consideration will be paid for the Limited Guarantee;
accordingly, no additional filing fee is being paid herewith pursuant to
Rule 457(n).
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 15, 1995
PROSPECTUS
GREEN TREE ASSET RECEIVABLES TRUSTS
ASSET-BACKED CERTIFICATES
ASSET-BACKED NOTES
-----------
GREEN TREE FINANCIAL CORPORATION
(SELLER AND SERVICER)
-----------
The Asset-Backed Certificates (the "Certificates") and the Asset-Backed Notes
(the "Notes" and, collectively with the Certificates, the "Securities")
described herein may be sold from time to time in one or more series, in
amounts, at prices and on the terms to be determined at the time of sale and to
be set forth in a supplement to this Prospectus (a "Prospectus Supplement").
Each series of Securities will include either one or more classes of
Certificates or, if Notes are issued as part of a series, one or more classes
of Notes and one or more classes of Certificates, as set forth in the related
Prospectus Supplement.
The Certificates and the Notes, if any, of any series of Securities will be
issued by a trust (a "Trust") to be formed with respect to such series by Green
Tree Financial Corporation ("Green Tree"). The assets of each Trust (the "Trust
Property") will include a pool of retail installment sales contracts and
promissory notes (the "Contracts") for the purchase of a variety of consumer
products, as further described under "Green Tree Financial Corporation" herein
(collectively, the "Products"). The Trust Property will also include certain
monies paid or payable under the Contracts after the Cutoff Date set forth in
the related Prospectus Supplement (the "Cutoff Date"), an assignment of Green
Tree's security interests in the Products financed thereby, and certain other
property, as more fully described herein and in the related Prospectus
Supplement. In addition, if so specified in the related Prospectus Supplement,
the Trust Property will include monies on deposit in one or more trust accounts
to be established with an Indenture Trustee, which may include a Pre-Funding
Account which would be used to purchase additional Contracts (the "Subsequent
Contracts") from the Seller from time to time during the Pre-Funding Period
specified in the related Prospectus Supplement.
Each Trust will be formed pursuant to either (i) a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement") to be entered into between
Green Tree, as Seller and Servicer, and the Owner Trustee specified in the
related Prospectus Supplement (the "Owner Trustee") or (ii) a Trust Agreement
(the "Trust Agreement") to be entered into among the Seller, the Owner Trustee
and certain other parties as specified in the related Prospectus Supplement. If
the Trust is formed pursuant to a Trust Agreement, a Sale and Servicing
Agreement (the "Sale and Servicing Agreement") will be entered into among Green
Tree, as Seller and Servicer, the Trust and the Backup Servicer (as defined
herein). In either case, the Pooling and Servicing Agreement or the Trust
Agreement and the Sale and Servicing Agreement are collectively referred to
herein as the "Trust Documents." The Notes, if any, of a series will be issued
and secured pursuant to an Indenture (the "Indenture") between the Trust and
the Indenture Trustee specified in the related Prospectus Supplement (the
"Indenture Trustee").
Except as otherwise provided in the related Prospectus Supplement, each class
of Securities of any series will represent the right to receive a specified
amount of payments of principal and interest on the related Contracts in the
manner described herein and in the related Prospectus Supplement. The right of
each class of Securities to receive payments may be senior or subordinate to
the rights of one or more of the other classes of such series. A series may
include two or more classes of Certificates or Notes which differ as to the
timing and priority of payment, interest rate or amount of distributions in
respect of principal or interest or both. A series may include one or more
classes of Certificates or Notes entitled to distributions in respect of
principal, with disproportionate, nominal or no interest distributions, or to
interest distributions, with disproportionate, nominal or no distributions in
respect of principal. Distributions on Certificates of any series will be
subordinated in priority to payments due on the related Notes, if any, to the
extent described herein and in the related Prospectus Supplement. The
Certificates will represent fractional undivided interests in the related
Trust.
Each class of Securities will represent the right to receive distributions or
payments in the amounts, at the rates, and on the dates set forth in the
related Prospectus Supplement. The rate of distributions in respect of
principal on Certificates and payment in respect of principal on Notes, if any,
of any class will depend on the priority of payment of such class and the rate
and timing of payments (including prepayments, liquidations and repurchases of
Contracts) on the related Contracts.
If specified in the related Prospectus Supplement, a financial guaranty
insurance policy, letter of credit, surety bond, Green Tree guaranty, cash
reserve fund, or other form of credit enhancement, or any combination thereof,
may be provided with respect to a Trust or any class of Securities.
Unless otherwise provided in the related Prospectus Supplement, the
Certificates and the Notes, if any, of any series initially will be represented
by certificates and notes registered in the name of Cede & Co., the nominee of
The Depository Trust Company ("DTC"). The interests of beneficial owners of the
Securities will be represented by book entries on the records of the
participating members of DTC. Definitive Securities will be available only
under limited circumstances.
There currently is no secondary market for the Securities. There can be no
assurance that any such market will develop or, if it does develop, that it
will continue. The Securities will not be listed on any securities exchange.
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SECURITIES, SEE "RISK FACTORS" AT PAGE 10 HEREIN AND AT PAGE
S-14 IN THE RELATED PROSPECTUS SUPPLEMENT.
-----------
THE CERTIFICATES REPRESENT INTERESTS IN AND THE NOTES REPRESENT OBLIGATIONS
OF THE RELATED TRUST AND DO NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF GREEN
TREE (EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN AND IN THE RELATED
PROSPECTUS SUPPLEMENT) OR ANY AFFILIATE OF GREEN TREE.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------
Retain this Prospectus for future reference. This Prospectus may not be used
to consummate sales of securities offered hereby unless accompanied by a
Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS , 1995
<PAGE>
AVAILABLE INFORMATION
Green Tree, as originator of each Trust, has filed with the Securities and
Exchange Commission (the "Commission") a Registration Statement (together with
all amendments and exhibits thereto, referred to herein as the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
Securities offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement which is available for
inspection without charge at the office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the Commission at
Seven World Trade Center, Suite 1300, New York, New York 10048 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and copies of which may be obtained from the Commission
at prescribed rates.
REPORTS TO SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, unless and
until Definitive Certificates or Definitive Notes are issued, unaudited
monthly and annual reports, containing information concerning each Trust and
prepared by the Servicer, will be sent on behalf of the Trust to the Owner
Trustee for the Certificateholders, the Indenture Trustee for the Noteholders
and Cede & Co., as registered holder of the Certificates and the Notes and the
nominee of DTC. See "Certain Information Regarding the Securities--Statements
to Securityholders" and "--Book-Entry Registration." Certificateholders and
Noteholders are collectively referred to herein as the "Securityholders."
Certificate Owners or Note Owners may receive such reports, upon written
request, together with a certification that they are Certificate Owners or
Note Owners and payment of any expenses associated with the distribution of
such reports, from the Owner Trustee, with respect to Certificate Owners, or
the Indenture Trustee, with respect to Note Owners, at the addresses specified
in the related Prospectus Supplement. Such reports will not constitute
financial statements prepared in accordance with generally accepted accounting
principles. Green Tree does not intend to send any of its financial reports to
Securityholders. The Servicer, on behalf of each Trust, will file with the
Commission periodic reports concerning each Trust to the extent required under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations of the Commission thereunder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
With respect to any class of Securities that is supported by a Green Tree
guaranty, Green Tree's Annual Report on Form 10-K for the year ended December
31, 1994, and Quarterly Reports on Form 10-Q for the periods ended March 31
and June 30, 1995, which have been filed with the Commission, are hereby
incorporated by reference in this Prospectus and the related Prospectus
Supplement.
All documents filed by the Servicer on behalf of each Trust pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the related
Securities shall be deemed to be incorporated by reference into this
Prospectus and the related Prospectus Supplement and to be a part hereof and
thereof from the respective dates of filing of such documents. Any statement
contained herein or in a document all or any portion of which is deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and the related Prospectus Supplement to the
extent that a statement contained herein or in any other subsequently filed
document which also is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus or the related Prospectus Supplement.
Green Tree will provide without charge to any person to whom this Prospectus
is delivered, upon the written or oral request of such person, a copy of any
or all of the foregoing documents incorporated herein by reference (other than
certain exhibits to such documents). Requests for such copies should be
directed to Chief Financial Officer, Green Tree Financial Corporation, 1100
Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639,
telephone number (612) 293-3400.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus and by reference to
the information with respect to the Securities contained in the related
Prospectus Supplement to be prepared and delivered in connection with the
offering of each series of Securities. Certain capitalized terms used in this
Prospectus Summary are defined elsewhere in this Prospectus and in the related
Prospectus Supplement.
<TABLE>
<S> <C>
Issuer.............................. With respect to each series of Securities,
a trust (the "Trust") will be formed by
Green Tree pursuant to either a Pooling and
Servicing Agreement between Green Tree, in
its capacity as Seller and as Servicer (in
such capacity referred to herein as the
"Servicer"), and the Owner Trustee
specified in the related Prospectus
Supplement, or a Trust Agreement between
the Seller, the Owner Trustee specified in
the related Prospectus Supplement and
certain other parties as specified in the
related Prospectus Supplement.
Seller and Servicer................. Green Tree Financial Corporation. See
"Green Tree Financial Corporation."
Owner Trustee....................... The Owner Trustee specified in the related
Prospectus Supplement (the "Owner
Trustee"). See "Description of the Trust
Documents--The Owner Trustee."
Backup Servicer..................... Green Tree may be terminated as Servicer
under certain circumstances, at which time
the Backup Servicer specified in the
related Prospectus Supplement (the "Backup
Servicer") will automatically become the
Servicer. See "Description of the Trust
Documents--Servicer Termination Events" and
"--The Backup Servicer."
Indenture Trustee................... With respect to any Series of Securities
including one or more classes of Notes, the
Indenture Trustee specified in the related
Prospectus Supplement (the "Indenture
Trustee").
The Certificates.................... Each series of Securities will include one
or more classes of Certificates which will
be issued pursuant to the related Trust
Documents.
Unless otherwise specified in the related
Prospectus Supplement, Certificates will be
available for purchase in denominations of
$1,000 and in integral multiples thereof
and will be available in book-entry form
only. Unless otherwise specified in the
related Prospectus Supplement, holders of
Certificates ("Certificateholders") will be
able to receive Definitive Certificates
only in the limited
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
circumstances described herein or in the
related Prospectus Supplement. See "Certain
Information Regarding the Securities--Book-
Entry Registration."
Unless otherwise specified in the related
Prospectus Supplement, each class of
Certificates will have a stated Certificate
Balance (as defined in the related
Prospectus Supplement) and will accrue
interest on such Certificate Balance at a
specified rate (with respect to each class
of Certificates, the "Pass-Through Rate").
Each class of Certificates may have a
different Pass-Through Rate, which may be a
fixed, variable or adjustable Pass-Through
Rate, or any combination of the foregoing.
The related Prospectus Supplement will
specify the Pass-Through Rate for each
class of Certificates, or the initial Pass-
Through Rate and the method for determining
subsequent changes to the Pass-Through
Rate.
A series may include two or more classes of
Certificates which differ as to timing of
distributions, sequential order, priority
of payment, seniority, allocation of loss,
Pass-Through Rate or amount of
distributions in respect of principal or
interest, or as to which distributions in
respect of principal or interest on any
class may or may not be made upon the
occurrence of specified events or on the
basis of collections from designated
portions of the Contract Pool. In addition,
a series may include one or more classes of
Certificates ("Strip Certificates")
entitled to (i) distributions in respect of
principal with disproportionate, nominal or
no interest distributions, or (ii) interest
distributions, with disproportionate,
nominal or no distributions in respect of
principal.
With respect to any series of Securities
including one or more classes of Notes,
distributions in respect of the
Certificates may be subordinated in
priority of payment to payments on the
Notes, to the extent specified in the
related Prospectus Supplement.
If the Seller or Servicer exercises its
option to purchase the Contracts of a Trust
on the terms and conditions described below
under "Description of the Trust Documents--
Termination," Certificateholders will
receive an amount in respect of the
Certificates as specified in the related
Prospectus Supplement. In addition, if the
related Prospectus Supplement provides that
the property of a Trust will include a Pre-
Funding Account (as such term is defined in
the related Prospectus Supplement, the
"Pre-Funding Account"),
</TABLE>
4
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<TABLE>
<S> <C>
Certificateholders will receive a
distribution in respect of principal on or
immediately following the end of the
funding period specified in the related
Prospectus Supplement (the "Pre-Funding
Period") in an amount and manner specified
in the related Prospectus Supplement.
The Notes........................... With respect to any series of Securities
including one or more classes of Notes,
such Notes will be issued pursuant to an
Indenture.
Unless otherwise specified in the related
Prospectus Supplement, Notes will be
available for purchase in denominations of
$1,000 and integral multiples thereof, and
will be available in book-entry form only.
Unless otherwise specified in the related
Prospectus Supplement, holders of Notes
("Noteholders") will be able to receive
Definitive Notes only in the limited
circumstances described herein or in the
related Prospectus Supplement. See "Certain
Information Regarding the Securities--Book-
Entry Registration."
Unless otherwise specified in the related
Prospectus Supplement, each class of Notes
will have a stated principal amount and
will bear interest at a specified rate or
rates (with respect to each class of Notes,
the "Interest Rate"). Each class of Notes
may have a different Interest Rate, which
may be a fixed, variable or adjustable
Interest Rate, or any combination of the
foregoing. The related Prospectus
Supplement will specify the Interest Rate
and the method for determining subsequent
changes to the Interest Rate.
A series may include two or more classes of
Notes which differ as to the timing and
priority of payment, seniority, allocations
of loss, Interest Rate or amount of
payments of principal or interest, or as to
which payments of principal or interest may
or may not be made upon the occurrence of
specified events or on the basis of
collections from designated portions of the
Contract Pool. In addition, a series may
include one or more classes of Notes
("Strip Notes") entitled to (i) principal
payments with disproportionate, nominal or
no interest payments or (ii) interest
payments with disproportionate, nominal or
no principal payments.
If the Seller or the Servicer exercises its
option to purchase the Contracts of a Trust
on the terms and conditions described below
under "Description of the Trust Documents--
Termination," the outstanding Notes, if
any, of such series will be redeemed as set
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
forth in the related Prospectus Supplement.
In addition, if the related Prospectus
Supplement provides that the property of a
Trust will include a Pre-Funding Account,
the outstanding Notes, if any, of such
series will be subject to partial
redemption on or immediately following the
end of the Pre-Funding Period in an amount
and manner specified in the related
Prospectus Supplement. In the event of such
partial redemption, the Noteholders may be
entitled to receive a prepayment premium
from the Trust, in the amount and to the
extent provided in the related Prospectus
Supplement.
Trust Property...................... Each Certificate will represent a
fractional undivided interest in, and each
Note, if any, will represent an obligation
of, the related Trust. The assets of each
Trust (the "Trust Property") will include,
among other things, a pool (the "Contract
Pool") of retail installment sales
contracts and promissory notes (the
"Contracts") for the purchase of a variety
of consumer products, as further described
under "Green Tree Financial Corporation"
herein (collectively, the "Products"),
certain monies paid or payable thereunder
on or after the Cutoff Date (as specified
in the related Prospectus Supplement), an
assignment of Green Tree's security
interests in the Products and of the right
to receive proceeds from claims on certain
insurance policies covering the Products or
the Obligors, the assignment of certain
rights of Green Tree against the Dealers
originating such Contracts, the Collection
Account, including all investments therein,
all income from the investment of funds
therein and all proceeds thereof, certain
other accounts and the proceeds thereof and
certain other rights under the Trust
Documents. In addition, if so specified in
the related Prospectus Supplement, the
Trust Property will include monies on
deposit in a Pre-Funding Account to be
established with the Indenture Trustee or
the Owner Trustee, which will be used to
purchase Subsequent Contracts (as defined
below) from the Seller from time to time
during the Pre-Funding Period specified in
the related Prospectus Supplement, as well
as any Subsequent Contracts so purchased.
See "The Trusts."
If and to the extent provided in the
related Prospectus Supplement, the related
Trust will be obligated to purchase from
Green Tree (subject to the satisfaction of
certain conditions described in the
applicable Sale and Servicing Agreement),
additional Contracts (the "Subsequent
Contracts") from time to time (as
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
frequently as daily) during the Pre-Funding
Period specified in the related Prospectus
Supplement having an aggregate principal
balance approximately equal to the amount
on deposit in the Pre-Funding Account (the
"Pre-Funded Amount") on such Closing Date.
Green Tree will be obligated to repurchase
Contracts upon the occurrence of certain
breaches of representations and warranties
(a "Repurchase Event"). See "Description of
the Trust Documents--Sale and Assignment of
the Contracts" and "--Servicing
Procedures."
Credit Enhancement.................. If and to the extent specified in the
related Prospectus Supplement, credit
enhancement with respect to a Trust or any
class of Securities may include any one or
more of the following: a financial guaranty
insurance policy, letter of credit, Green
Tree guaranty, cash reserve fund, or other
form of credit enhancement, or any
combination thereof. Unless otherwise
specified in the related Prospectus
Supplement, any form of credit enhancement
will have certain limitations and
exclusions from coverage thereunder, which
will be described in the related Prospectus
Supplement. "Description of the Trust
Documents--Credit Enhancement."
Servicing........................... The Servicer will be responsible for
managing, administering, servicing and
making collections on the Contracts held by
each Trust. Unless otherwise specified in
the related Prospectus Supplement, with
respect to each series of Securities
compensation to the Servicer will include a
monthly fee (the "Servicing Fee") which
will be payable from the related Trust to
the Servicer on each Distribution Date, in
an amount equal to the product of one-
twelfth of % per annum multiplied by the
aggregate principal balance of the
Contracts (the "Aggregate Principal
Balance") as of the first day of the prior
calendar month, plus any late fees and
other administrative fees and expenses or
similar charges collected with respect to
the Contracts during such Monthly Period.
See "Description of the Trust Documents--
Servicing Compensation."
Contracts........................... The Contracts forming part of the Trust
Property of each Trust were or will have
been originated by Dealers and sold by the
Dealers to Green Tree in the ordinary
course of business. The Contracts will
generally be prepayable at any time without
penalty to the purchaser of the related
Product or other person or persons who are
obligated to make payments
</TABLE>
7
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<TABLE>
<S> <C>
thereunder (each, an "Obligor"). See "The
Contracts." Information with respect to
each Contract Pool, including the types of
Products financed, the weighted average
annual percentage rate and the weighted
average remaining maturity, will be set
forth in the related Prospectus Supplement.
Collection Account................ With respect to each series of Securities,
the Servicer will establish and maintain
one or more separate accounts (the
"Collection Account") in the name of the
Owner Trustee or, in the case of any series
including one or more classes of Notes, in
the name of the Indenture Trustee for the
benefit of the Certificateholders and the
Noteholders, if any. All payments from
Obligors that are received by the Servicer
on behalf of each Trust will be deposited
in the related Collection Account no later
than two Business Days after receipt
thereof. Unless otherwise specified in the
related Prospectus Supplement, all payments
from Obligors and all proceeds (net of
reasonable expenses of collection) with
respect to Liquidated Contracts
("Liquidation Proceeds") that are received
by the Servicer will be deposited in the
related Collection Account no later than
one Business Day after receipt thereof.
Unless otherwise specified in the related
Prospectus Supplement, the Servicer will be
permitted to use any alternative remittance
schedule acceptable to the Rating Agencies
(as defined below). See "Description of the
Trust Documents--Collections."
Mandatory Purchase of Certain With respect to each series of Securities,
Contracts........................ Green Tree will make certain
representations and warranties relating to
the Contracts held by the related Trust to
the Owner Trustee for the benefit of the
related Trust and if such series of
Securities includes one or more classes of
Notes, the Owner Trustee will assign its
right to enforce such representations and
warranties to the related Indenture Trustee
as collateral for the Notes. The Owner
Trustee and the Indenture Trustee, if any,
will be entitled to require that Green Tree
repurchase any Contract if the interests of
the Certificateholders, the Noteholders, if
any, or the related Trust therein are
materially and adversely affected by a
breach of any such representation or
warranty (a "Repurchase Event"). See
"Description of the Trust Documents--Sale
and Assignment of the Contracts."
Optional Purchase of Contracts.... Unless otherwise specified in the related
Prospectus Supplement, with respect to each
series of Securities, the Seller or the
Servicer may purchase all the
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<S> <C>
Contracts held by the related Trust on any
Distribution Date following the first
Monthly Period as of which the Aggregate
Principal Balance has declined to 10% or
less (or such other percentage as may be
specified in the related Prospectus
Supplement) of the Cutoff Date Principal
Balance, subject to certain provisions in
the related Trust Documents. See
"Description of the Trust Documents--
Termination."
Tax Status......................... The anticipated federal income tax
consequences of the purchase, ownership and
disposition of Securities issued by a Trust
will be discussed in the related Prospectus
Supplement. See "Certain Federal Income Tax
Consequences" herein and in the related
Prospectus Supplement.
ERISA Considerations .............. Subject to the considerations discussed
under "ERISA Considerations" herein and in
the related Prospectus Supplement, and
unless otherwise specified in the related
Prospectus Supplement, the Notes will be
eligible for purchase by employee benefit
plans. The related Prospectus Supplement
will provide further information with
respect to the eligibility of a class of
Certificates for purchase by employee
benefit plans. See "ERISA Considerations"
herein and in the related Prospectus
Supplement.
Rating............................. Unless otherwise provided in the related
Prospectus Supplement, as a condition of
issuance, the Securities of each series
will be rated in one of the four highest
rating categories by at least one
nationally recognized rating agency (a
"Rating Agency"). There is no assurance
that the rating initially assigned to such
Securities will not be subsequently lowered
or withdrawn by the Rating Agency. In the
event the rating initially assigned to any
Securities is subsequently lowered for any
reason, no person or entity will be
obligated to provide any credit enhancement
in addition to the credit enhancement, if
any, specified in the related Prospectus
Supplement.
Registration of Certificates....... Unless otherwise specified in the related
Prospectus Supplement, the Certificates and
the Notes, if any, of each series will be
registered in the name of Cede & Co., as
the nominee of DTC, and will be available
for purchase only in book-entry form on the
records of DTC and participating members
thereof. Certificates and Notes will be
issued in definitive form only under the
limited circumstances described herein. All
references herein to "Holders" or
"Certificateholders" or
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<TABLE>
<S> <C>
"Noteholders" shall reflect the rights of
beneficial owners of Certificates (the
"Certificate Owners") or of Notes ("Note
Owners"), as the case may be, as they may
indirectly exercise such rights through DTC
and participating members thereof, except
as otherwise specified herein or in the
related Prospectus Supplement. See
"Description of the Trust Documents--Book-
Entry Registration."
</TABLE>
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RISK FACTORS
CERTAIN LEGAL ASPECTS
With respect to each series of Securities, the transfer of the Contracts to
the related Trust will be subject to the requirements of the Uniform
Commercial Code (the "UCC") as in effect in Minnesota. The Seller will take or
cause to be taken such action as is required to perfect the Trust's rights in
the Contracts.
Unless otherwise provided in the related Prospectus Supplement, Green Tree
will hold the Contract Files (as defined below) on behalf of each Trust under
a custodian agreement with the Trust. To facilitate servicing and save
administrative costs, the documents will not be physically segregated from
other similar documents that are in Green Tree's possession. UCC financing
statements will be filed in Minnesota reflecting the sale and assignment of
the Contracts to the Trustee, and Green Tree's accounting records and computer
systems will also reflect such sale and assignment. In addition, the Contracts
will be stamped or otherwise marked to indicate that such Contracts have been
sold to the related Trust. Despite these precautions, if, through inadvertence
or otherwise, any of the Contracts were sold to another party (or a security
interest therein were granted to another party) that purchased (or took such
security interest in) any of such Contracts in the ordinary course of its
business and took possession of such Contracts, the purchaser (or secured
party) would acquire an interest in the Contracts superior to the interest of
the related Trust if the purchaser (or secured party) acquired (or took a
security interest in) the Contracts for new value and without actual knowledge
of such Trust's interest.
Due to the administrative burden and expense, the certificates of title for,
or UCC financing statements reflecting Green Tree's security interest in, the
Products will not be amended to reflect the assignment of the security
interests in the Products by Green Tree to the Owner Trustee. In the absence
of such an amendment, the Owner Trustee may not have a perfected security
interest in the Products. Moreover, statutory liens for repairs or unpaid
taxes may have priority even over perfected security interests in the
Products. See "Description of the Trust Documents--Sale and Assignment of the
Contracts" and "Certain Legal Aspects of the Contracts."
INSOLVENCY RISKS
Green Tree intends that any transfer of Contracts to the related Trust will
constitute a sale, rather than a pledge of the Contracts to secure
indebtedness of Green Tree. However, if Green Tree were to become a debtor
under the federal bankruptcy code or similar applicable state laws
(collectively, "Insolvency Laws"), a creditor or trustee in bankruptcy of
Green Tree or Green Tree as debtor-in-possession might argue that such sale of
Contracts by Green Tree was a pledge of the Contracts rather than a sale. This
position, if presented to or accepted by a court, could cause the related
Trust to experience a delay in or reduction of collections on the Contracts.
A case decided by the United States Court of Appeals for the Tenth Circuit
contains language to the effect that accounts sold by an entity that
subsequently became bankrupt remained property of the debtor's bankruptcy
estate. Although the Contracts constitute chattel paper rather than accounts
under the UCC, sales of chattel paper, like sales of accounts, are governed by
Article 9 of the UCC. If Green Tree were to become a debtor under any
Insolvency Law and a court were to follow the reasoning of the Tenth Circuit
Court of Appeals and apply such reasoning to chattel paper, a Trust could
experience a delay in or reduction of collections on the Contracts.
SUBORDINATION; LIMITED ASSETS
To the extent specified in the related Prospectus Supplement, distributions
of interest and principal on some or all classes of Certificates of such
series may be subordinated in priority of payment to interest and principal
due on the Notes (if any) of such series and/or to distributions of interest
and principal on other classes of Certificates of such series. In addition,
holders of certain classes of Securities of any series may have the right to
take actions that are detrimental to the interests of the holders of
Securities of certain other classes of Securities of such series. Moreover, no
Trust will have any significant assets or sources of funds other than the
Contracts and, to the extent provided in the related Prospectus Supplement, a
Pre-Funding Account and any credit
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enhancement specified in the related Prospectus Supplement. The Notes, if any,
of any series will represent obligations solely of, and the Certificates of
such series will represent interests solely in, the related Trust, and neither
the Notes nor the Certificates of any such series will be insured or
guaranteed by Green Tree, the Servicer, the applicable Owner Trustee, the
applicable Indenture Trustee or, except as specified in the related Prospectus
Supplement, any other person or entity. Consequently, holders of the
Securities of any series must rely for payment upon payments on the related
Contracts and, if and to the extent available, amounts on deposit in the Pre-
Funding Account, if any, and any credit enhancement, if any, as specified in
the related Prospectus Supplement.
YIELD AND PREPAYMENT CONSIDERATIONS
The weighted average life of the Securities will be reduced by full or
partial prepayments on the Contracts. The Contracts will generally be
prepayable at any time without penalty. Prepayments (or, for this purpose,
equivalent payments to the related Trust) may result from payments by
Obligors, liquidations due to default, the receipt of proceeds from physical
damage or credit insurance, repurchases by Green Tree as a result of certain
uncured breaches of the warranties made by it with respect to the Contracts,
purchases by the Servicer as a result of certain uncured breaches of the
covenants made by it with respect to the Contracts in the related Agreement,
or Green Tree or the Servicer exercising its option to purchase all of the
remaining Contracts.
Unless otherwise specified in the related Prospectus Supplement, the amounts
paid to Securityholders in respect of principal on any Distribution Date will
include all prepayments on the Contracts during the corresponding Monthly
Periods. The Certificateholders and the Noteholders will bear all reinvestment
risk resulting from the timing of payments of principal on the Securities.
LIMITED LIQUIDITY
There is currently no market for the Securities of any series. There can be
no assurance that any such market will develop or, if it does develop, that it
will provide Securityholders with liquidity of investment or will continue for
the life of the Securities. The Securities will not be listed on any
securities exchange.
Unless otherwise specified in the related Prospectus Supplement, the
Securities will be issued in book-entry, rather than physical, form and, as a
result, in certain circumstances, the liquidity of the Securities in the
secondary market and the ability of the Certificate Owners and Note Owners to
pledge them may be adversely affected. See "Plan of Distribution" and "Certain
Information Regarding the Securities--Book-Entry Registration."
THE TRUSTS
With respect to each series of Securities, Green Tree will establish a Trust
pursuant to the related Trust Documents. Prior to the sale and assignment of
the related Contracts pursuant to the related Trust Documents, the Trust will
have no assets or obligations. The Trust will not engage in any business
activity other than acquiring and holding the Trust Property, issuing the
Certificates and the Notes, if any, of such series and distributing payments
thereon.
Each Certificate will represent a fractional undivided interest in, and each
Note, if any, will represent an obligation of, the related Trust. The Trust
Property of each Trust will include, among other things, (i) a Contract Pool;
(ii) all monies paid or payable thereon on or after the Cutoff Date (as
specified in the related Prospectus Supplement); (iii) such amounts as from
time to time may be held in the Collection Account (including all investments
in the Collection Account and all income from the investment of funds therein
and all proceeds thereof) and certain other accounts (including the proceeds
thereof); (iv) an assignment of the security interests of Green Tree in the
Products securing the related Contracts; (v) an assignment of the right to
receive proceeds from the exercise of rights against Dealers under agreements
between Green Tree and such Dealers (the "Dealer Agreements") and the
assignment of rights in respect of each related Contract from the applicable
Dealer to Green Tree (the "Dealer Assignments"); (vi) an assignment of the
right to receive proceeds from claims on
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certain insurance policies covering the related Products or Obligors; and
(vii) certain other rights under the related Trust Documents. See "The
Contracts" and "Description of the Trust Documents--Collections." The Trust
Property will also include, if so specified in the related Prospectus
Supplement, monies on deposit in a Pre-Funding Account to be established with
the Indenture Trustee or the Owner Trustee, which will be used to purchase
Subsequent Contracts from the Seller from time to time (and as frequently as
daily) during the Pre-Funding Period specified in the related Prospectus
Supplement. Any Subsequent Contracts so purchased will be included in the
related Contract Pool forming part of the Trust Property, subject to the prior
rights of the related Indenture Trustee and the Noteholders therein. In
addition, to the extent specified in the related Prospectus Supplement, a form
of credit enhancement may be issued to or held by the Owner Trustee or the
Indenture Trustee for the benefit of holders of one or more classes of
Securities.
The Servicer will service the Contracts held by each Trust and will receive
fees for such services. See "Description of the Trust Documents--Servicing
Compensation." Unless otherwise specified in the related Prospectus
Supplement, Green Tree, on behalf of each Trust, will hold the original
installment sales contract or promissory note as well as copies of documents
and instruments relating to each Contract and evidencing the security interest
in the Product securing each Contract (the "Contract Files"). In order to
protect the Trust's ownership interest in the Contracts, Green Tree will file
a UCC-1 financing statement in Minnesota to give notice of such Trust's
ownership of the related Contracts and the related Trust Property.
THE OWNER TRUSTEE
The Owner Trustee for each Trust will be specified in the related Prospectus
Supplement. The Owner Trustee's liability in connection with the issuance and
sale of the Securities of such series will be limited solely to the express
obligations of such Owner Trustee set forth in the related Trust Documents. An
Owner Trustee may resign at any time, in which event the General Partner, if
any, specified in the related Prospectus Supplement, or if no such General
Partner is specified, the Servicer or its successor, will be obligated to
appoint a successor trustee. The General Partner, if any, specified in the
related Prospectus Supplement, or if no such General Partner is specified, the
Servicer, may also remove the Owner Trustee if the Owner Trustee ceases to be
eligible to continue as Owner Trustee under the related Trust Documents or if
the Owner Trustee becomes insolvent. In such circumstances, the General
Partner, if any, specified in the related Prospectus Supplement, or if no such
General Partner is specified, the Servicer will be obligated to appoint a
successor trustee. Any resignation or removal of an Owner Trustee and
appointment of a successor trustee will be subject to any conditions or
approvals specified in the related Prospectus Supplement and will not become
effective until acceptance of the appointment by the successor trustee.
THE CONTRACTS
Except as otherwise specified in the related Prospectus Supplement, each
pool of Contracts with respect to a Trust (a "Contract Pool") will consist of
retail installment sales contracts or installment loan agreements
(collectively, the "Contracts") to finance the purchase of Products (described
below). The Contracts will be originated by Green Tree on an individual basis
in the ordinary course of business. Except as otherwise specified in the
related Prospectus Supplement, the Contracts will be fully amortizing and will
bear interest at a fixed or variable rate (the "Contract Rate").
The Products financed by the Contracts included in a Contract Pool are
expected to include all the types of consumer products Green Tree is then
financing. The types of Products securing a Contract Pool and the relative
concentrations of each such type will be specified in the related Prospectus
Supplement. Because Green Tree has limited experience in underwriting and
servicing retail installment sales contracts for items such as the Products,
Green Tree has no basis to distinguish the expected delinquency, default or
prepayment experience of Contracts secured by different types of Products.
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<PAGE>
GREEN TREE FINANCIAL CORPORATION
GENERAL
Green Tree is a Delaware corporation that, as of June 30, 1995, had
stockholders' equity of approximately $844,992,000. Through its various
divisions, Green Tree purchases, pools, sells and services retail conditional
sales contracts for manufactured housing and retail installment sales
contracts for home improvements, a variety of consumer products and equipment
finance, and provides credit to manufactured housing dealers for purposes of
purchasing manufactured home inventory from manufacturers. Green Tree conducts
its business throughout the United States through 50 manufactured housing
offices, 80 home improvement locations and 3 regional wholesale lending
centers, as well as centralized operations in St. Paul, Minnesota and Rapid
City, South Dakota. Its principal executive offices are located at 1100
Landmark Towers, St. Paul, Minnesota 55102-1639 (telephone (612) 293-3400).
Green Tree's Annual Report on Form 10-K for the year ended December 31, 1994,
most recent Proxy Statement and, when available subsequent quarterly and
annual reports are available from Green Tree upon written request.
PURCHASE OF CONTRACTS
Green Tree arranges to purchase certain contracts originated by dealers of
Products located throughout the United States. Green Tree's personnel contact
dealers and explain Green Tree's available financing plans, terms, prevailing
rates and credit and financing policies. If the dealer wishes to utilize Green
Tree's available customer financing, the dealer must make an application for
dealer approval.
All contracts that Green Tree purchases are written on forms provided or
approved by Green Tree and are purchased on an individually approved basis in
accordance with Green Tree's guidelines. The dealer submits the customer's
credit application and purchase order to Green Tree's office where an analysis
of the creditworthiness of the proposed buyer is made. The analysis includes a
review of the applicant's paying habits, length and likelihood of continued
employment and certain other procedures. Green Tree's underwriting guidelines
for consumer products focus primarily on the obligor's ability to repay the
loan rather than the collateral value of the product financed. The maximum
loan amount for an obligor will depend on a variety of factors, including the
type of product, whether the product is new or used, the obligor's debt-to-
income ratio, and the manufacturer's invoice price of the product (plus
certain dealer-installed accessories, sales taxes, title fees, registration
fees, and certain other items). Green Tree management may revise these
guidelines from time to time, and the underwriting guidelines may be exceeded
in certain cases with the approval of Green Tree management. Green Tree will
also finance premiums for the term of the contract on optional credit life and
accident and health insurance and up to $ of premiums for extended warranty
insurance, and may finance premiums for required physical damage insurance on
the product. If the application meets Green Tree's guidelines and the credit
is approved, Green Tree purchases the contract when the customer accepts
delivery of the Product.
Currently, Green Tree will finance the purchase of motorcycles; marine
products (including boats, boat trailers and outboard motors); pianos and
organs; horse trailers; sport vehicles (including snowmobiles, personal
watercraft and all-terrain vehicles); trucks; personal aircraft; and
recreational vehicles.
LOSS AND DELINQUENCY INFORMATION
Each Prospectus Supplement will include Green Tree's loss and delinquency
experience with respect to its entire servicing portfolio of consumer product
contracts. However, there can be no assurance that such experience will be
indicative of the performance of the Contracts included in a particular
Contract Pool.
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YIELD AND PREPAYMENT CONSIDERATIONS
Unless otherwise specified in the related Prospectus Supplement, the
Contracts will be simple interest retail installment sales contracts and
promissory notes. Payments on simple interest obligations are applied first to
interest accrued through the payment date, and the remainder is applied to
reduce the unpaid principal balance. Accordingly, if an Obligor pays an
installment before its due date, the portion of the payment allocable to
interest for the period will be less than if the payment had been made on the
due date, the portion of the payment applied to reduce the principal balance
will be correspondingly greater, and the principal balance will be amortized
more rapidly than scheduled. Conversely, if an Obligor pays an installment
after its due date, the portion of the payment allocable to interest will be
greater than if the payment had been made on the due date, the portion of the
payment applied to reduce the principal balance will be correspondingly less,
and the principal balance will be amortized slower than scheduled, in which
case a larger portion of the principal balance may be due on the final
scheduled payment date. Any interest shortfalls resulting from early payment
or prepayment of a Contract will be funded by collections on other Contracts
or, to the extent collections are insufficient, by payments under the
applicable form of credit enhancement, if any, described in the related
Prospectus Supplement.
The Contracts will be prepayable, without premium or penalty, by Obligors at
any time. Prepayments (or, for this purpose, equivalent payments to a Trust)
also may result from liquidations due to default, receipt of proceeds from
insurance policies, repurchases by Green Tree due to breach of a
representation or warranty, or as a result of Green Tree or the Servicer
exercising its option to purchase the Contract Pool. See "Description of the
Trust Documents." The rate of prepayments on the Contracts may be influenced
by a variety of economic, social and other factors. No assurance can be given
that prepayments on the Contracts will conform to any estimated or actual
historical experience, and no prediction can be made as to the actual
prepayment rates which will be experienced on the Contracts.
Certificateholders and Noteholders will bear all reinvestment risk resulting
from the timing of payments of principal on the Certificates or the Notes, as
the case may be.
POOL FACTOR
The "Certificate Pool Factor" for each class of Certificates will be an
eight-digit decimal which the Servicer will compute indicating the Certificate
Balance with respect to such Certificates as of each Distribution Date (after
giving effect to all distributions of principal made on such Distribution
Date), as a fraction of the Cutoff Date Certificate Principal Balance. The
"Note Pool Factor" for each class of Notes, if any, will be an eight-digit
decimal which the Servicer will compute indicating the remaining outstanding
principal balance with respect to such Notes as of each Distribution Date
(after giving effect to all distributions of principal on such Distribution
Date) as a fraction of the initial outstanding principal balance of such class
of Notes. Each Certificate Pool Factor and each Note Pool Factor will
initially be 1.00000000; thereafter, the Certificate Pool Factor and the Note
Pool Factor will decline to reflect reductions in the Certificate Balance of
the applicable class of Certificates or reductions in the outstanding
principal balance of the applicable class of Notes, as the case may be. The
amount of a Certificateholder's pro rata share of the Certificate Balance for
the related class of Certificates can be determined by multiplying the
original denomination of the Certificateholder's Certificate by the then
applicable Certificate Pool Factor. The amount of a Noteholder's pro rata
share of the aggregate outstanding principal balance of the applicable class
of Notes can be determined by multiplying the original denomination of such
Noteholder's Note by the then applicable Note Pool Factor.
With respect to each Trust and pursuant to the related Trust Documents, on
each Distribution Date or Distribution Date, as the case may be, the
Certificateholders and the Noteholders will receive periodic reports from the
Owner Trustee stating the Certificate Pool Factor or the Note Pool Factor, as
the case may be, and containing various other items of information. Unless and
until Definitive Certificates or Definitive Notes are issued, such reports
will be sent on behalf of the Trust to the Owner Trustee and the Indenture
Trustee and Cede & Co., as registered holder of the Certificates and the Notes
and the nominee of DTC. Certificate Owners and Note Owners may receive such
reports, upon written request, together with a certification that they are
Certificate Owners or Note Owners and payment of any expenses associated with
the distribution of such reports, from the Owner Trustee and the Indenture
Trustee at the addresses specified in the related Prospectus Supplement. See
"Certain Information Regarding the Securities--Statements to Securityholders."
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USE OF PROCEEDS
Unless otherwise specified in the related Prospectus Supplement, the net
proceeds to be received by the Trust from the sale of each series of
Securities will be used to pay to Green Tree the purchase price for the
Contracts and to make the deposit of the Pre-Funded Amount into the Pre-
Funding Account, if any, to repay warehouse lenders and/or to provide for
other forms of credit enhancement specified in the related Prospectus
Supplement. The net proceeds to be received by Green Tree will be used to pay
its warehouse loans, and any additional proceeds will be added to Green Tree's
general funds and used for its general corporate purposes.
THE CERTIFICATES
GENERAL
With respect to each Trust, one or more classes of Certificates of a given
series will be issued pursuant to Trust Documents to be entered into between
Green Tree, as Seller and as Servicer, and the Owner Trustee, forms of which
have been filed as exhibits to the Registration Statement of which this
Prospectus forms a part. The following summary does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all of
the material provisions of the Trust Documents. Where particular provisions of
or terms used in the Trust Documents are referred to, the actual provisions
(including definitions of terms) are incorporated by reference as part of this
summary.
Unless otherwise specified in the related Prospectus Supplement, each class
of Certificates will initially be represented by a single Certificate
registered in the name of the nominee of DTC (together with any successor
depository selected by the Seller, the "Depository"). See "Certain Information
Regarding the Securities--Book-Entry Registration." Unless otherwise specified
in the related Prospectus Supplement, the Certificates evidencing interests in
a Trust will be available for purchase in denominations of $1,000 initial
principal amount and integral multiples thereof, except that one Certificate
evidencing an interest in such Trust may be issued in a denomination that is
less than $1,000 initial principal amount. Certificates may be transferred or
exchanged without the payment of any service charge other than any tax or
governmental charge payable in connection with such transfer or exchange.
Unless otherwise specified in the related Prospectus Supplement, the Owner
Trustee will initially be designated as the registrar for the Certificates.
DISTRIBUTIONS OF INTEREST AND PRINCIPAL
The timing and priority of distributions, seniority, allocations of loss,
Pass-Through Rate and amount of or method of determining distributions with
respect to principal and interest (or, where applicable, with respect to
principal only or interest only) on the Certificates of any series will be
described in the related Prospectus Supplement. Distributions of interest on
the Certificates will be made on the dates specified in the related Prospectus
Supplement (each, a "Distribution Date") and, unless otherwise specified in
the related Prospectus Supplement, will be made prior to distributions with
respect to principal. A series may include one or more classes of Strip
Certificates entitled to (i) distributions in respect of principal with
disproportionate, nominal or no interest distribution, or (ii) interest
distributions, with disproportionate, nominal or no distributions in respect
of principal. Each class of Certificates may have a different Pass-Through
Rate, which may be a fixed, variable or adjustable Pass-Through Rate (and
which may be zero for certain classes of Strip Certificates), or any
combination of the foregoing. The related Prospectus Supplement will specify
the Pass-Through Rate for each class of Certificate, or the initial Pass-
Through Rate and the method for determining the Pass-Through Rate. Unless
otherwise specified in the related Prospectus Supplement, interest on the
Certificates will be calculated on the basis of a 360-day year consisting of
twelve 30-day months. Unless otherwise specified in the related Prospectus
Supplement, distributions in respect of the Certificates will be subordinate
to payments in respect of the Notes, if any, as more fully described in the
related Prospectus Supplement. Distributions in respect of principal of any
class of Certificates will be made on a pro rata basis among all of the
Certificateholders of such class.
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In the case of a series of Certificates which includes two or more classes
of Certificates, the timing, sequential order, priority of payment or amount
of distributions in respect of principal, and any schedule or formula or other
provisions applicable to the determination thereof, of each such class shall
be as set forth in the related Prospectus Supplement.
THE NOTES
GENERAL
A series of Securities may include one or more classes of Notes issued
pursuant to the terms of an Indenture, a form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Unless otherwise specified in the related Prospectus Supplement, no Notes will
be issued as a part of any series. The following summary does not purport to
be complete and is subject to, and is qualified in its entirety by reference
to, all of the provisions of the Notes and the Indenture, and the following
summary may be supplemented or superseded in whole or in part by the related
Prospectus Supplement. Where particular provisions of or terms used in the
Indenture are referred to, the actual provisions (including definition of
terms) are incorporated by reference as part of this summary.
Unless otherwise specified in the related Prospectus Supplement, each class
of Notes will initially be represented by a single Note registered in the name
of the nominee of the Depository. See "Certain Information Regarding the
Securities--Book-Entry Registration." Unless otherwise specified in the
related Prospectus Supplement, Notes will be available for purchase in
denominations of $1,000 and integral multiples thereof. Notes may be
transferred or exchanged without the payment of any service charge other than
any tax or governmental charge payable in connection with such transfer or
exchange. Unless otherwise provided in the related Prospectus Supplement, the
Indenture Trustee will initially be designated as the registrar for the Notes.
PRINCIPAL AND INTEREST ON THE NOTES
The timing and priority of payment, seniority, allocations of loss, Interest
Rate and amount of or method of determining payments of principal and interest
on the Notes will be described in the related Prospectus Supplement. The right
of holders of any class of Notes to receive payments of principal and interest
may be senior or subordinate to the rights of holders of any class or classes
of Notes of such series, or any class of Certificates, as described in the
related Prospectus Supplement. Unless otherwise provided in the related
Prospectus Supplement, payments of interest on the Notes will be made prior to
payments of principal thereon. A series may include one or more classes of
Strip Notes entitled to (i) principal payments with disproportionate, nominal
or no interest payment, or (ii) interest payments with disproportionate,
nominal or no principal payments. Each class of Notes may have a different
Interest Rate, which may be a fixed, variable or adjustable Interest Rate (and
which may be zero for certain classes of Strip Notes), or any combination of
the foregoing. The related Prospectus Supplement will specify the Interest
Rate for each class of Notes, or the initial Interest Rate and the method for
determining the Interest Rate. One or more classes of Notes of a series may be
redeemable under the circumstances specified in the related Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, payments in
respect of interest to Noteholders of all classes within a series will have
the same priority. Under certain circumstances, the amount available for such
payments could be less than the amount of interest payable on the Notes on any
of the dates specified for payments in the related Prospectus Supplement
(each, a "Distribution Date"), in which case each class of Noteholders will
receive their ratable share (based upon the aggregate amount of interest due
to such class of Noteholders) of the aggregate amount available to be
distributed in respect of interest on the Notes.
In the case of a series of Securities which includes two or more classes of
Notes, the sequential order and priority of payment in respect of principal
and interest, and any schedule or formula or other provisions applicable to
the determination thereof, of each such class will be set forth in the related
Prospectus Supplement.
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Unless otherwise specified in the related Prospectus Supplement, payments in
respect of principal and interest of any class of Notes will be made on a pro
rata basis among all of the Notes of such class.
THE INDENTURE
A form of Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Green Tree will provide a
copy of the applicable Indenture (without exhibits) upon request to a holder
of Notes issued thereunder.
Modification of Indenture Without Noteholder Consent. Each Trust and related
Indenture Trustee (on behalf of such Trust) may, without consent of the
related Noteholders, enter into one or more supplemental indentures for any of
the following purposes: (i) to correct or amplify the description of the
collateral or add additional collateral; (ii) to provide for the assumption of
the Note and the Indenture obligations by a permitted successor to the Trust;
(iii) to add additional covenants for the benefit of the related Noteholders,
or to surrender any rights or power conferred upon the Trust; (iv) to convey,
transfer, assign, mortgage or pledge any property to or with the Indenture
Trustee; (v) to cure any ambiguity or correct or supplement any provision in
the Indenture or in any supplemental indenture; (vi) to provide for the
acceptance of the appointment of a successor Indenture Trustee or to add to or
change any of the provisions of the Indenture or in any supplemental indenture
which may be inconsistent with any other provision of the Indenture as shall
be necessary and permitted to facilitate the administration by more than one
trustee; (vii) to modify, eliminate or add to the provisions of the Indenture
in order to comply with the Trust Indenture Act of 1939, as amended; and
(viii) to add any provisions to, change in any manner, or eliminate any of the
provisions of, the Indenture or modify in any manner the rights of Noteholders
under such Indenture; provided that any action specified in this clause (viii)
shall not, as evidenced by an opinion of counsel, adversely affect in any
material respect the interests of any related Noteholder unless Noteholder
consent is otherwise obtained as described below.
Modifications of Indenture With Noteholder Consent. With respect to each
Trust, with the consent of the holders representing a majority of the
principal balance of the outstanding related Notes (a "Note Majority"), the
Owner Trustee and the Indenture Trustee may execute a supplemental indenture
to add provisions to change in any manner or eliminate any provisions of, the
related Indenture, or modify in any manner the rights of the related
Noteholders.
Without the consent of the holder of each outstanding related Note affected
thereby, however, no supplemental indenture may: (i) change the due date of
any installment of principal of or interest on any Note or reduce the
principal amount thereof, the interest rate specified thereon or the
redemption price with respect thereto or change the manner of calculating any
such payment or any place of payment where the coin or currency in which any
Note or any interest thereon is payable; (ii) impair the right to institute
suit for the enforcement of certain provisions of the Indenture regarding
payment; (iii) reduce the percentage of the aggregate amount of the
outstanding Notes the consent of the holders of which is required for any such
supplemental indenture or the consent of the holders of which is required for
any waiver of compliance with certain provisions of the Indenture or of
certain defaults thereunder and their consequences as provided for in the
Indenture; (iv) modify or alter the provisions of the Indenture regarding the
voting of Notes held by the related Trust, any other obligor on the Notes, the
Seller or an affiliate of any of them; (v) reduce the percentage of the
aggregate outstanding amount of the Notes the consent of the holders of which
is required to direct the Indenture Trustee to sell or liquidate the Contracts
if the proceeds of such sale would be insufficient to pay the principal amount
and accrued but unpaid interest on the outstanding Notes; (vi) decrease the
percentage of the aggregate principal amount of the Notes required to amend
the sections of the Indenture which specify the applicable percentage of
aggregate principal amount of the Notes necessary to amend the Indenture or
certain other related agreements; or (vii) permit the creation of any lien
ranking prior to or on a parity with the lien of the Indenture with respect to
any of the collateral for the Notes or, except as otherwise permitted or
contemplated in the Indenture, terminate the lien of the Indenture on any such
collateral or deprive the holder of any Note of the security afforded by the
lien of the Indenture.
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Events of Default; Rights Upon Event of Default. With respect to each Trust,
unless otherwise specified in the related Prospectus Supplement, "Events of
Default" under the Indenture will consist of: (i) a default for five days or
more in the payment of any interest on any Note; (ii) a default in the payment
of the principal of or any installment of the principal of any Note when the
same becomes due and payable; (iii) a default in the observance or performance
in any material respect of any covenant or agreement of the Trust made in the
Indenture, or any representation or warranty made by the Trust in the
Indenture or in any certificate delivered pursuant thereto or in connection
therewith having been incorrect as of the time made, and the continuation of
any such default or the failure to cure such breach of a representation or
warranty for a period of 30 days after notice thereof is given to the Trust by
the Indenture Trustee or to the Trust and the Indenture Trustee by the holders
of at least 25% in principal amount of the Notes then outstanding; or (iv)
certain events of bankruptcy, insolvency, receivership or liquidation of the
Trust. However, the amount of principal due and payable on any class of Notes
on any Distribution Date (prior to the Final Scheduled Distribution Date, if
any, for such class) will generally be determined by amounts available to be
deposited in the Note Distribution Account for such Distribution Date.
Therefore, unless otherwise specified in the related Prospectus Supplement,
the failure to pay principal on a class of Notes generally will not result in
the occurrence of an Event of Default unless such class of Notes has a Final
Scheduled Distribution Date, and then not until such Final Scheduled
Distribution Date for such class of Notes.
Unless otherwise specified in the related Prospectus Supplement, if an Event
of Default should occur and be continuing with respect to the Notes of any
series, the related Indenture Trustee or a Note Majority may declare the
principal of the Notes to be immediately due and payable. Such declaration
may, under certain circumstances, be rescinded by a Note Majority.
Unless otherwise specified in the related Prospectus Supplement, if the
Notes of any series have been declared due and payable following an Event of
Default with respect thereto, the related Indenture Trustee may institute
proceedings to collect amounts due or foreclose on Trust Property, exercise
remedies as a secured party, sell the related Contracts or elect to have the
Trust maintain possession of such Contracts and continue to apply collections
on such Contracts as if there had been no declaration of acceleration. Unless
otherwise specified in the related Prospectus Supplement, the Indenture
Trustee, however, will be prohibited from selling the related Contracts
following an Event of Default, unless (i) the holders of all the outstanding
related Notes consent to such sale; (ii) the proceeds of such sale are
sufficient to pay in full the principal of and the accrued interest on such
outstanding Notes at the date of such sale; or (iii) the Indenture Trustee
determines that the proceeds of the Contracts would not be sufficient on an
ongoing basis to make all payments on the Notes as such payments would have
become due if such obligations had not been declared due and payable, and the
Indenture Trustee obtains the consent of the holders of 66 2/3% of the
aggregate outstanding amount of the Notes. Unless otherwise specified in the
related Prospectus Supplement, following a declaration upon an Event of
Default that the Notes are immediately due and payable, (i) Noteholders will
be entitled to ratable repayment of principal on the basis of their respective
unpaid principal balances and (ii) repayment in full of the accrued interest
on and unpaid principal balances of the Notes will be made prior to any
further payment of interest or principal on the Certificates.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee, if an Event of Default occurs and is continuing with
respect to a series of Notes, the Indenture Trustee will be under no
obligation to exercise any of the rights or powers under the Indenture at the
request or direction of any of the holders of such Notes, if the Indenture
Trustee reasonably believes it will not be adequately indemnified against the
costs, expenses and liabilities which might be incurred by it in complying
with such request. Subject to the provisions for indemnification and certain
limitations contained in the Indenture, a Note Majority in a series will have
the right to direct the time, method and place of conducting any proceeding or
any remedy available to the Indenture Trustee, and a Note Majority may, in
certain cases, waive any default with respect thereto, except a default in the
payment of principal or interest or a default in respect of a covenant or
provision of the Indenture that cannot be modified without the waiver or
consent of all of the holders of such outstanding Notes.
No holder of a Note of any series will have the right to institute any
proceeding with respect to the related Indenture, unless (i) such holder
previously has given to the Indenture Trustee written notice of a continuing
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Event of Default, (ii) the holders of not less than 25% in principal amount of
the outstanding Notes of such series have made written request of the
Indenture Trustee to institute such proceeding in its own name as Indenture
Trustee, (iii) such holder or holders have offered the Indenture Trustee
reasonable indemnity, (iv) the Indenture Trustee has for 60 days failed to
institute such proceeding, and (v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 60-day period by
the holders of a majority in principal amount of such outstanding Notes.
If an Event of Default occurs and is continuing and if it is known to the
Indenture Trustee, the Indenture Trustee will mail to each Noteholder notice
of the Event of Default within 90 days after it occurs. Except in the case of
a failure to pay principal of or interest on any Note, the Indenture Trustee
may withhold the notice if and so long as it determines in good faith that
withholding the notice is in the interests of the Noteholders.
In addition, each Indenture Trustee and the related Noteholders, by
accepting the related Notes, will covenant that they will not at any time
institute against the Seller or the related Trust any bankruptcy,
reorganization or other proceeding under any federal or state bankruptcy or
similar law.
Neither the Indenture Trustee nor the Owner Trustee in its individual
capacity, nor any holder of a Certificate including, without limitation, the
Seller, nor any of their respective owners, beneficiaries, agents, officers,
directors, employees, affiliates, successors or assigns will, in the absence
of an express agreement to the contrary, be personally liable for the payment
of the related Notes or for any agreement or covenant of the related Trust
contained in the Indenture.
Certain Covenants. Each Indenture will provide that the related Trust may
not consolidate with or merge into any other entity, unless (i) the entity
formed by or surviving such consolidation or merger is organized under the
laws of the United States or any state, (ii) such entity expressly assumes the
Trust's obligation to make due and punctual payments upon the Notes and the
performance or observance of every agreement and covenant of the Trust under
the Indenture, (iii) no Event of Default shall have occurred and be continuing
immediately after such merger or consolidation, (iv) the Owner Trustee has
been advised that the then current rating of the related Notes or Certificates
then in effect would not be reduced or withdrawn by the Rating Agencies as a
result of such merger or consolidation, (v) the Owner Trustee has received an
opinion of counsel to the effect that such consolidation or merger would have
no material adverse tax consequence to the Trust or to any related Noteholder
or Certificateholder.
Each Trust will not, among other things, (i) except as expressly permitted
by the Indenture, the Trust Documents or certain related documents for such
Trust (collectively, the "Related Documents"), sell, transfer, exchange or
otherwise dispose of any of the assets of the Trust, (ii) claim any credit on
or make any deduction from the principal and interest payable in respect of
the related Notes (other than amounts withheld under the Code or applicable
state law) or assert any claim against any present or former holder of such
Notes because of the payment of taxes levied or assessed upon the Trust, (iii)
dissolve or liquidate in whole or in part, (iv) permit the validity or
effectiveness of the related Indenture to be impaired or permit any person to
be released from any covenants or obligations with respect to the related
Notes under such Indenture except as may be expressly permitted thereby, or
(v) except as expressly permitted by the Related Documents, permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance to be
created on or extend to or otherwise arise upon or burden the assets of the
Trust or any part thereof, or any interest therein or proceeds thereof.
No Trust may engage in any activity other than as specified under the
section of the related Prospectus Supplement entitled "The Trust." No Trust
will incur, assume or guarantee any indebtedness other than indebtedness
incurred pursuant to the related Notes and the related Indenture or otherwise
in accordance with the Related Documents.
Annual Compliance Statement. Each Trust will be required to file annually
with the related Indenture Trustee a written statement as to the fulfillment
of its obligations under the Indenture.
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Indenture Trustee's Annual Report. The Indenture Trustee will be required to
mail each year to all related Noteholders a brief report relating to its
eligibility and qualification to continue as Indenture Trustee under the
related Indenture, any amounts advanced by it under the Indenture, the amount,
interest rate and maturity date of certain indebtedness owing by the Trust to
the Indenture Trustee in its individual capacity, the property and funds
physically held by the Indenture Trustee as such and any action taken by it
that materially affects the Notes and that has not been previously reported.
Satisfaction and Discharge of Indenture. The Indenture will be discharged
with respect to the collateral securing the related Notes upon the delivery to
the related Indenture Trustee for cancellation of all such Notes or, with
certain limitations, upon deposit with the Indenture Trustee of funds
sufficient for the payment in full of all of such Notes.
THE INDENTURE TRUSTEE
The Indenture Trustee for a series of Notes will be specified in the related
Prospectus Supplement. The Indenture Trustee may resign at any time, in which
event the Seller will be obligated to appoint a successor trustee. Green Tree
may also remove the Indenture Trustee if the Indenture Trustee ceases to be
eligible to continue as such under the Indenture or if the Indenture Trustee
becomes insolvent. In such circumstances, Green Tree will be obligated to
appoint a successor trustee. Any resignation or removal of the Indenture
Trustee and appointment of a successor trustee will be subject to any
conditions or approvals, if any, specified in the related Prospectus
Supplement and will not become effective until acceptance of the appointment
by a successor trustee.
CERTAIN INFORMATION REGARDING THE SECURITIES
BOOK-ENTRY REGISTRATION
Unless otherwise provided in the related Prospectus Supplement, the
Securities of each series will be registered in the name of Cede & Co., the
nominee of DTC. DTC is a limited-purpose trust company organized under the
laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC accepts securities for deposit from its
participating organizations ("Participants") and facilitates the clearance and
settlement of securities transactions between Participants in such securities
through electronic book-entry changes in accounts of Participants, thereby
eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, banks and trust companies and clearing
corporations and may include certain other organizations. Indirect access to
the DTC system is also available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly ("indirect participants").
Certificate Owners and Note Owners who are not Participants but desire to
purchase, sell or otherwise transfer ownership of Securities may do so only
through Participants (unless and until Definitive Certificates or Definitive
Notes, each as defined below, are issued). In addition, Certificate Owners and
Note Owners will receive all distributions of principal of, and interest on,
the Securities from the Owner Trustee or the Indenture Trustee, as applicable,
through DTC and Participants. Certificate Owners and Note Owners will not
receive or be entitled to receive certificates representing their respective
interests in the Securities, except under the limited circumstances described
below and such other circumstances, if any, as may be specified in the related
Prospectus Supplement.
Unless and until Definitive Securities are issued, it is anticipated that
the only Certificateholder of the Certificates and the only Noteholder of the
Notes, if any, will be Cede & Co., as nominee of DTC. Certificate Owners and
Note Owners will not be recognized by the Owner Trustee as Certificateholders
or by the Indenture Trustee as Noteholders as those terms are used in the
related Trust Documents or Indenture. Certificate Owners
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and Note Owners will be permitted to exercise the rights of Certificateholders
or Noteholders, as the case may be, only indirectly through Participants and
DTC.
With respect to any series of Securities, while the Securities are
outstanding (except under the circumstances described below), under the rules,
regulations and procedures creating and affecting DTC and its operations (the
"Rules"), DTC is required to make book-entry transfers among Participants on
whose behalf it acts with respect to the Securities and is required to receive
and transmit distributions of principal of, and interest on, the Securities.
Participants with whom Certificate Owners or Note Owners have accounts with
respect to Securities are similarly required to make book-entry transfers and
receive and transmit such distributions on behalf of their respective
Certificate Owners and Note Owners. Accordingly, although Certificate Owners
and Note Owners will not possess Securities, the Rules provide a mechanism by
which Certificate Owners and Note Owners will receive distributions and will
be able to transfer their interests.
With respect to any series of Securities, unless otherwise specified in the
related Prospectus Supplement, Certificates and Notes (if any) will be issued
in registered form to Certificate Owners and Note Owners, or their nominees,
rather than to DTC (such Certificates and Notes being referred to herein as
"Definitive Certificates" and "Definitive Notes," respectively), only if (i)
DTC, the Seller or the Servicer advises the Owner Trustee or the Indenture
Trustee, as the case may be, in writing that DTC is no longer willing or able
to discharge properly its responsibilities as nominee and depository with
respect to the Certificates or the Notes, and the Seller, the Servicer, the
Owner Trustee or the Indenture Trustee, as the case may be, is unable to
locate a qualified successor, (ii) the Seller or the Administrator (if any) at
its sole option has advised the Owner Trustee or the Indenture Trustee, as the
case may be, in writing that it elects to terminate the book-entry system
through DTC and (iii) after the occurrence of a Servicer Termination Event,
the holders representing a majority of the Certificate Balance (a "Certificate
Majority") or a Note Majority advises the Owner Trustee or the Indenture
Trustee, as the case may be, through DTC, that continuation of a book-entry
system is no longer in their best interests. Upon issuance of Definitive
Certificates or Definitive Notes to Certificate Owners or Note Owners, such
Certificates or Notes will be transferable directly (and not exclusively on a
book-entry basis) and registered holders will deal directly with the Owner
Trustee or the Indenture Trustee, as the case may be, with respect to
transfers, notices and distributions.
DTC has advised the Seller that, unless and until Definitive Certificates or
Definitive Notes are issued, DTC will take any action permitted to be taken by
a Certificateholder or a Noteholder under the related Trust Documents or
Indenture only at the direction of one or more Participants to whose DTC
accounts the Certificates or Notes are credited. DTC has advised the Seller
that DTC will take such action with respect to any fractional interest of the
Certificates or the Notes only at the direction of and on behalf of such
Participants beneficially owning a corresponding fractional interest of the
Certificates or the Notes. DTC may take actions, at the direction of the
related Participants, with respect to some Certificates or Notes which
conflict with actions taken with respect to other Certificates or Notes.
Issuance of Certificates and Notes in book-entry form rather than as
physical certificates or notes may adversely affect the liquidity of
Certificates or Notes in the secondary market and the ability of the
Certificate Owners or Note Owners to pledge them. In addition, since
distributions on the Certificates and the Notes will be made by the Owner
Trustee or the Indenture Trustee to DTC and DTC will credit such distributions
to the accounts of its Participants, with the Participants further crediting
such distributions to the accounts of indirect participants or Certificate
Owners or Note Owners, Certificate Owners and Note Owners may experience
delays in the receipt of such distributions.
STATEMENTS TO SECURITYHOLDERS
On or prior to each Distribution Date, the Servicer will prepare and provide
to the Owner Trustee a statement to be delivered to the related
Certificateholders on such Distribution Date. On or prior to each Distribution
Date, the Servicer will prepare and provide to the Indenture Trustee a
statement to be delivered to the related Noteholders on such Distribution
Date. Such statements will be based on the information in the related
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Servicer's Certificate setting forth certain information required under the
Trust Documents (the "Servicer's Certificate"). Unless otherwise specified in
the related Prospectus Supplement, each such statement to be delivered to
Certificateholders will include the following information as to the
Certificates with respect to such Distribution Date or the period since the
previous Distribution Date, as applicable, and each such statement to be
delivered to Noteholders will include the following information as to the
Notes with respect to such Distribution Date or the period since the previous
Distribution Date, as applicable:
(i) the amount of the distribution allocable to interest on or with
respect to each class of Securities;
(ii) the amount of the distribution allocable to principal on or with
respect to each class of Securities;
(iii) the Certificate Balance and the Certificate Pool Factor for each
class of Certificates and the aggregate outstanding principal balance and
the Note Pool Factor for each class of Notes, after giving effect to all
payments reported under (ii) above on such date;
(iv) the amount of the Servicing Fee paid to the Servicer with respect to
the related Monthly Period or Periods, as the case may be;
(v) the Pass-Through Rate or Interest Rate for the next period for any
class of Certificates or Notes with variable or adjustable rates;
(vi) the amount, if any, distributed to Certificateholders and
Noteholders applicable to payments under the related form of credit
enhancement, if any; and
(vii) such other information as may be specified in the related
Prospectus Supplement.
Each amount set forth pursuant to subclauses (i), (ii), (iv), (vi) and (vii)
with respect to Certificates or Notes will be expressed as a dollar amount per
$1,000 of the initial Certificate Balance or the initial principal balance of
the Notes, as applicable.
Unless and until Definitive Certificates or Definitive Notes are issued,
such reports with respect to a series of Securities will be sent on behalf of
the related Trust to the Owner Trustee, the Indenture Trustee and Cede & Co.,
as registered holder of the Certificates and the Notes and the nominee of DTC.
Certificate Owners and Note Owners may receive copies of such reports upon
written request, together with a certification that they are Certificate
Owners or Note Owners, as the case may be, and payment of any expenses
associated with the distribution of such reports, from the Owner Trustee or
the Indenture Trustee, as applicable. See "Reports to Securityholders" and "--
Book-Entry Registration" above.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of a Trust, the Owner Trustee and
the Indenture Trustee, as applicable, will mail to each holder of a class of
Securities who at any time during such calendar year has been a
Securityholder, and received any payment thereon, a statement containing
certain information for the purposes of such Securityholder's preparation of
federal income tax returns. See "Certain Federal Income Tax Consequences."
LISTS OF SECURITYHOLDERS
Unless otherwise provided in the related Prospectus Supplement, with respect
to each series of Certificates, at such time, if any, as Definitive
Certificates have been issued, the Owner Trustee will, upon written request by
three or more Certificateholders or one or more holders of Certificates
evidencing not less than 25% of the Certificate Balance, within five Business
Days after provision to the Owner Trustee of a statement of the applicants'
desire to communicate with other Certificateholders about their rights under
the related Trust Documents or the Certificates and a copy of the
communication that the applicants propose to transmit, afford such
Certificateholders access during business hours to the current list of
Certificateholders for purposes of communicating with other Certificateholders
with respect to their rights under the Trust Documents. Unless otherwise
specified in the related Prospectus Supplement, the Trust Documents will not
provide for holding any annual or other meetings of Certificateholders.
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Unless otherwise provided in the related Prospectus Supplement, with respect
to each series of Notes, if any, at such time, if any, as Definitive Notes
have been issued, the Indenture Trustee will, upon written request by three or
more Noteholders or one or more holders of Notes evidencing not less than 25%
of the aggregate principal balance of the related Notes, within five Business
Days after provision to the Indenture Trustee of a statement of the
applicants' desire to communicate with other Noteholders about their rights
under the related Indenture or the Notes and a copy of the communication that
the applicants propose to transmit, afford such Noteholders access during
business hours to the current list of Noteholders for purposes of
communicating with other Noteholders with respect to their rights under the
Indenture. Unless otherwise specified in the related Prospectus Supplement,
the Indenture will not provide for holding any annual or other meetings of
Noteholders.
DESCRIPTION OF THE TRUST DOCUMENTS
Except as otherwise specified in the related Prospectus Supplement, the
following summary describes certain terms of either (i) the Pooling and
Servicing Agreements or (ii) the Sale and Servicing Agreements and the Trust
Agreements (in either case collectively referred to as the "Trust Documents")
pursuant to which Green Tree will sell and assign such Contracts to a Trust
and the Servicer will agree to service such Contracts on behalf of the Trust,
and pursuant to which such Trust will be created and Certificates will be
issued. Forms of the Trust Documents have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part. Green Tree will
provide a copy of such agreements (without exhibits) upon request to a holder
of Securities described therein. This summary does not purport to be complete
and is subject to, and qualified in its entirety by reference to, all of the
provisions of the Trust Documents. Where particular provisions or terms used
in the Trust Documents are referred to, the actual provisions (including
definitions of terms) are incorporated by reference as part of such summary.
SALE AND ASSIGNMENT OF THE CONTRACTS
On the Closing Date, Green Tree will sell and assign to the Owner Trustee,
without recourse, Green Tree's entire interest in the related Contracts and
the proceeds thereof, including its security interests in the related
Products. Each Contract transferred by Green Tree to the Trust will be
identified in a schedule appearing as an exhibit to the related Trust
Documents (the "Schedule of Contracts"). Concurrently with such sale and
assignment, the Owner Trustee will execute and deliver the related
certificates representing the Certificates to or upon the order of the Seller,
and the Owner Trustee will execute and the Indenture Trustee will authenticate
and deliver the Notes, if any, to or upon the order of the Seller.
Unless otherwise specified in the related Prospectus Supplement, Green Tree
will warrant in the Trust Documents to the Owner Trustee, among other things,
that (except as otherwise specified in the related Prospectus Supplement): (i)
each Contract (A) has created or will create a valid, binding and enforceable
first priority security interest in favor of Green Tree in the Product (and,
within 180 days after the Closing Date, the title document (if any) to the
Products will show Green Tree as first lienholder), which security interest
has been validly assigned by Green Tree to the Owner Trustee, (B) was
originated by a Dealer for the retail sale of a Product in the ordinary course
of such Dealer's business, was fully and properly executed by the parties
thereto, was purchased by Green Tree from such Dealer under an existing Dealer
Agreement with Green Tree and was validly assigned by such Dealer to Green
Tree, (C) contains customary and enforceable provisions adequate to enable
realization against the collateral security and (D) is a fully amortizing
contract that provides for level monthly payments (other than with respect to
the first and the final payments) which, if made when due, will fully amortize
the amount financed over the original term; (ii) no selection procedures
adverse to the Securityholders were utilized in selecting the Contracts from
those secured consumer contracts owned by Green Tree which meet the selection
criteria contained in the Trust Documents; (iii) all requirements of
applicable Federal, state and local laws, and regulations thereunder, in
respect of all of the Contracts and each and every sale of the Products have
been complied with in all material respects; (iv) each Contract represents the
genuine, legal, valid and binding payment obligation of the Obligor thereon,
enforceable in accordance with its terms,
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except as may be limited by laws affecting creditors' rights generally or as
may be modified by the application of the Soldiers' and Sailors' Civil Relief
Act of 1940, as amended (the "Relief Act"); (v) (A) immediately before the
conveyance of each Contract to the Trust, such Contract will be secured by an
enforceable and validly perfected first priority security interest in the
Product in favor of Green Tree as secured party, (B) immediately after the
conveyance of each Contract to the Trust, such Contract will be secured by an
enforceable and validly perfected first priority security interest in the
Product in favor of the Trust as secured party or, in each case, all necessary
and appropriate action has been commenced and will be completed within 180
days that would result in such a security interest and (C) as of the Cutoff
Date there were no security interests, liens, charges, pledges, preferences,
equities or encumbrances of any kind, claims or rights of others or claims for
taxes, work, labor or materials affecting a Product (each, a "Lien") which are
or may be Liens prior or equal to the Lien of the related Contract; (vi) there
has been no default, breach, violation or event permitting acceleration under
the terms of any Contract (other than payment delinquencies of not more than
59 days), and there has been no waiver of any of the foregoing; and as of the
Cutoff Date, no Product had been repossessed; (vii) immediately prior to the
conveyance of the Contracts to the related Trust, Green Tree had good and
indefeasible title thereto and was the sole owner thereof, free of any Lien;
and upon conveyance of the Contracts by Green Tree to the Trust pursuant to
the Trust Documents, the Trust will have good and indefeasible title to and
will be the sole owner of the Contracts, free of any Lien; (viii) no Dealer
has a participation in or other right to receive proceeds of any Contract, and
Green Tree has not taken any action to convey any right to any person that
would result in such person having a right to payments received with respect
to any Contract; (ix) Green Tree has not done anything to convey any right to
any person that would impair the rights of the Trust, the Certificateholders
or the Noteholders in any Contract or the proceeds thereof; (x) each Contract
was originated by a Dealer and was sold by the Dealer to Green Tree without
any fraud or misrepresentation on the part of such Dealer; (xi) no Obligor is
the United States of America or any State or any agency, department,
subdivision or instrumentality thereof; (xii) no Contract is assumable by
another person in a manner that would release the Obligor thereof from such
Obligor's obligations to Green Tree with respect to such Contract; (xiii) no
Contract was originated in, or is subject to the laws of, any jurisdiction the
laws of which would make unlawful, void or voidable the sale, transfer and
assignment of such Contract under the Trust Documents or pursuant to transfers
of the Securities; (xiv) all filings and other actions required to be made,
taken or performed by any person in any jurisdiction to give the Trust a first
priority perfected lien or ownership interest in the Contracts will have been
made, taken or performed; (xv) there exists a Contract File pertaining to each
Contract, and such Contract File contains (A) the fully executed original of
the Contract, (B) a certificate of insurance or application form for insurance
signed by the Obligor, or copies thereof, (C) the original lien certificate or
application therefor and (D) a credit application signed by the Obligor, or a
copy thereof; each of such documents required to be signed by the Obligor has
been signed by the Obligor in the appropriate spaces, all blanks have been
properly filled in and each form has otherwise been correctly prepared; and
the complete Contract File for each Contract is in the possession of a
custodian; (xvi) there is only one original executed copy of each Contract;
(xvii) the Contracts constitute chattel paper within the meaning of the UCC as
in effect in the State of Minnesota; (xviii) each Contract was entered into by
an Obligor who at the Cutoff Date had not been identified on the records of
Green Tree as being the subject of a current bankruptcy proceeding; (xix) the
computer tape containing information with respect to the Contracts that was
made available by the Seller to the Owner Trustee on the Closing Date and was
used to select the Contracts (the "Computer Tape") was complete and accurate
as of the Cutoff Date and includes a description of the same Contracts that
are described in the Schedule of Contracts; (xx) by the Closing Date, the
portions of the electronic master record of retail installment sale contracts
and promissory notes of Green Tree (the "Electronic Ledger") relating to the
Contracts will have been clearly and unambiguously marked to show that the
Contracts constitute part of the Trust Property and are owned by the Trust in
accordance with the terms of the Trust Documents; (xxi) the information set
forth in the Schedule of Contracts was produced from the Electronic Ledger and
was true and correct in all material respects as of the close of business on
the Cutoff Date; (xxii) no Contract has been satisfied, subordinated or
rescinded; the Product securing each Contract has not been released from the
lien of the related Contract in whole or in part; and no provision of a
Contract has been waived, altered or modified in any respect, except by
instruments or documents contained in the Contract File; (xxiii) no Contract
is subject to any right of rescission, set-off, counterclaim or defense;
(xxiv) no Contract was more than 59 days past due as of the Cutoff Date and
(xxv) each Contract had a remaining principal balance as of the Cutoff Date
equal to or greater than $1,000.
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The warranties of Green Tree will be made as of the execution and delivery
of the related Trust Documents and will survive the sale, transfer and
assignment of the related Contracts and other Trust Property to the Trust but
will speak only as of the date made.
In the event of a breach by Green Tree of any representation or warranty
made by the Trust Documents with respect to a Contract that materially and
adversely affects the interests of the Securityholders or the Trust in that
Contract (any such breach by Green Tree being a "Repurchase Event"), Green
Tree, unless it cures the breach by the second Accounting Date after the date
on which Green Tree becomes aware of or receives written notice from the Owner
Trustee, the Indenture Trustee, or the Servicer of such breach, will be
obligated to repurchase the Contract from the Trust. Any such repurchase shall
be made on the Deposit Date immediately following such second Accounting Date
at a price equal to the Purchase Amount as of such second Accounting Date. The
"Purchase Amount" of any Contract means, with respect to any Accounting Date,
the outstanding principal balance of such Contract as of such Accounting Date,
plus accrued and unpaid interest thereon. The "Deposit Date" with respect to
any Distribution Date is the Business Day immediately preceding the
Determination Date for such Distribution Date. An "Accounting Date" is the
last day (whether or not a Business Day) of any calendar month. This
repurchase obligation may be enforced by the Owner Trustee or the Indenture
Trustee on behalf of the Certificateholders and the Noteholders, respectively,
and will constitute the sole remedy available to the Certificateholders and
the Noteholders, unless otherwise specified in the related Prospectus
Supplement, the Owner Trustee or the Indenture Trustee against Green Tree for
any such uncured breach, except that pursuant to the Trust Documents, Green
Tree will indemnify the Owner Trustee, the Indenture Trustee, the Trust, the
Backup Servicer and the Certificateholders and Noteholders against losses,
damages, liabilities and claims which may be asserted against any of them as a
result of third-party claims arising out of the facts giving rise to such
breach.
Upon the purchase by Green Tree of a Warranty Contract, the Owner Trustee
will convey such Contract and the related Trust Property to Green Tree.
CUSTODY OF CONTRACT FILES
Unless otherwise specified in the related Prospectus Supplement, Green Tree
initially will be appointed to act as custodian for the Contract Files of each
Trust. Prior to any such appointment, the Trust and Green Tree or such other
institution specified in the related Prospectus Supplement, as the case may
be, shall enter into a custodian agreement pursuant to which Green Tree or
such other institution will agree to hold the Contract Files on behalf of the
related Trust. Any such custodian agreement may be terminated by the Trust on
30 days' notice to Green Tree or such other institution. If Green Tree resigns
or is terminated as the Servicer, any custodian agreement with Green Tree
shall terminate at the same time.
To facilitate servicing and save administrative costs, the documents will
not be physically segregated from other similar documents that are in Green
Tree's possession. UCC financing statements will be filed in Minnesota
reflecting the sale and assignment of the Contracts to the Trustee, and Green
Tree's accounting records and computer systems will also reflect such sale and
assignment. In addition, the Contracts will be stamped or otherwise marked to
indicate that such Contracts have been sold to the related Trust. Despite
these precautions, if, through inadvertence or otherwise, any of the Contracts
were sold to another party (or a security interest therein were granted to
another party) that purchased (or took such security interest in) any of such
Contracts in the ordinary course of its business and took possession of such
Contracts, the purchaser (or secured party) would acquire an interest in the
Contracts superior to the interest of the related Trust if the purchaser (or
secured party) acquired (or took a security interest in) the Contracts for new
value and without actual knowledge of such Trust's interest. See "Certain
Legal Aspects of the Contracts--Rights in the Contracts."
COLLECTIONS
With respect to each Trust, the Servicer will establish one or more
Collection Accounts in the name of the Owner Trustee or, in the case of any
series including one or more classes of Notes, in the name of the Indenture
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Trustee for the benefit of the related Securityholders. If so specified in the
related Prospectus Supplement, the Owner Trustee will establish and maintain
for each series an account, in the name of the Owner Trustee on behalf of the
related Certificateholders, in which amounts released from the Collection
Account and any Pre-Funding Account and any amounts received from any source
of credit enhancement for distribution to such Certificateholders will be
deposited and from which all distributions to such Certificateholders will be
made (the "Certificate Distribution Account"). With respect to any series
including one or more classes of Notes, the Indenture Trustee will establish
and maintain for each series an account, in the name of the Indenture Trustee
on behalf of the related Noteholders, in which amounts released from the
Collection Account and any Pre-Funding Account and any amounts received from
any source of credit enhancement for payment to such Noteholders will be
deposited and from which all distributions to such Noteholders will be made
(the "Note Distribution Account"). The Collection Account, the Certificate
Distribution Account (if any), and the Note Distribution Account (if any), are
referred to herein collectively as the "Designated Accounts." Any other
accounts to be established with respect to a Trust will be described in the
related Prospectus Supplement.
Each Designated Account will be an Eligible Account maintained with the
Owner Trustee, the Indenture Trustee and/or other depository institutions.
"Eligible Account" means any account which is (i) an account maintained with
an Eligible Institution (as defined below); (ii) an account or accounts the
deposits in which are fully insured by either the Bank Insurance Fund or the
Savings Association Insurance Fund of the FDIC; (iii) a "segregated trust
account" maintained with the corporate trust department of a federal or state
chartered depository institution or trust company with trust powers and acting
in its fiduciary capacity for the benefit of the Trustee, which depository
institution or trust company has capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the capital and surplus of the bank holding company) of not less than
$50,000,000 and the securities of such depository institution (or, if such
depository institution is a subsidiary of a bank holding company system and
such depository institution's securities are not rated, the securities of the
bank holding company) has a credit rating from each of and in one
of its generic credit rating categories which signifies investment grade; or
(iv) an account that will not cause or to downgrade or withdraw
its then-current rating assigned to the Certificates, as confirmed in writing
by Moody's and S&P . "Eligible Institution" means any
depository institution organized under the laws of the United States or any
state, the deposits of which are insured to the full extent permitted by law
by the Bank Insurance Fund (currently administered by the Federal Deposit
Insurance Corporation), whose short-term deposits have been rated by Moody's
and , or in one of the two highest rating categories by and
in the case of unsecured long-term debt, and which is subject to
supervision and examination by federal or state authorities. On the Closing
Date specified in the related Prospectus Supplement, the Servicer will cause
to be deposited in the Collection Account all payments on the Contracts
received by the Servicer after the Cutoff Date and on or prior to the second
Business Day preceding the Closing Date.
Unless otherwise specified in the related Prospectus Supplement, the
Servicer will deposit all payments on the Contracts held by any Trust received
directly by the Servicer from Obligors and all proceeds of Contracts collected
directly by the Servicer during each Monthly Period into the Collection
Account not later than the Business Day after receipt. Notwithstanding the
foregoing and unless otherwise provided in the related Prospectus Supplement,
the Servicer may utilize an alternative remittance schedule, if the Servicer
provides to the Owner Trustee and the Indenture Trustee written confirmation
from each Rating Agency that such alternative remittance schedule will not
result in the downgrading or withdrawal by such Rating Agency of the rating(s)
then assigned to the Securities. Green Tree and the Servicer will also deposit
into the Collection Account on or before the Deposit Date the Purchase Amount
of each Warranty Contract or Administrative Contract to be purchased by it as
of the related Accounting Date.
For any series of Securities, funds in the Designated Accounts and any other
accounts identified in the related Prospectus Supplement will be invested, as
provided in the related Trust Documents, at the direction of the Servicer in
United States government securities and certain other high-quality investments
meeting the criteria specified in the related Trust Documents ("Eligible
Investments"). Eligible Investments shall mature no later than the Business
Day preceding the applicable Distribution Date or Distribution Date, as the
case may be,
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for the Monthly Period to which such amounts relate. Investments in Eligible
Investments will be made in the name of the Owner Trustee or the Indenture
Trustee, as the case may be, and such investments will not be sold or disposed
of prior to their maturity.
Unless otherwise specified in the related Prospectus Supplement, collections
or recoveries on a Contract (other than late fees or certain other similar
fees or charges) received during a Monthly Period and Purchase Amounts
deposited with the Owner Trustee prior to a Distribution Date will be applied
first to any outstanding Monthly Advances made by the Servicer with respect to
such Contract, and then to interest and principal on the Contract in
accordance with the terms of the Contract.
SERVICING PROCEDURES
The Servicer will make reasonable efforts, consistent with the customary
servicing procedures employed by the Servicer with respect to Contracts owned
or serviced by it, to collect all payments due with respect to the Contracts
held by any Trust and, in a manner consistent with the Trust Documents, will
follow its customary collection procedures with respect to secured consumer
loans that it services for itself and others.
Except as otherwise provided in the related Prospectus Supplement, upon the
discovery by any of the Servicer, the Owner Trustee or the Indenture Trustee,
or receipt of written notice by the Servicer of any breach by the Servicer of
certain of its covenants that materially and adversely affects the interests
of a Trust or the related Securityholders in a Contract (an "Administrative
Contract"), unless such breach shall have been cured by the second Accounting
Date following the Servicer's discovery or receipt of written notice of such
breach, the Servicer will be required to purchase the related Contract for the
Purchase Amount on the related Deposit Date. The purchase obligation will
constitute the sole remedy available to the Certificateholders, the Owner
Trustee on behalf of Certificateholders, the Noteholders or the Indenture
Trustee on behalf of Noteholders against the Servicer for any such uncured
breach, except with respect to certain indemnities of the Servicer under the
Trust Documents.
Under the Trust Documents, the Servicer will be required to use its best
efforts to repossess or otherwise comparably convert the ownership of any
Product securing a Contract with respect to which the Servicer has determined
that payments thereunder are not likely to be resumed as soon as practicable
after default on such Contract, but in no event later than the day on which
any portion of a Scheduled Payment has become days delinquent. The Servicer
is authorized to follow such of its normal collection practices and procedures
as it deems necessary or advisable to realize upon any Contract. The Servicer
may repossess and sell the Product securing such Contract at judicial sale, or
take any other action permitted by applicable law. See "Certain Legal Aspects
of the Contracts." The Servicer will be entitled to recover all reasonable
expenses incurred by it in connection therewith. The proceeds of such
realization (net of such expenses) will be deposited in the Collection Account
at the time and in the manner described above under "--Collections."
The Trust Documents will provide that the Servicer will indemnify and defend
the Owner Trustee, the Indenture Trustee, the Backup Servicer, the Trust and
the Securityholders against, among other things, any and all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting
from the use, ownership or operation by the Servicer or any affiliate thereof
of any Product or in respect of any action taken or failed to be taken by the
Servicer with respect to any portion of the Trust Property in violation of the
provisions of the Trust Documents. The Servicer's obligations to indemnify the
Owner Trustee, the Indenture Trustee, the Backup Servicer, the Trust and the
Securityholders for the Servicer's actions or omissions will survive the
removal of the Servicer but will not apply to any action or omission of a
successor Servicer.
SERVICING COMPENSATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each series of Securities, the Servicer will be entitled to receive
the Servicing Fee for each Monthly Period in an amount equal to the product of
one-twelfth of the Servicing Rate and the Aggregate Principal Balance as of
the first day of such
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Monthly Period. The Servicer also will be entitled to collect and retain any
late fees or other administrative fees or similar charges allowed by the terms
of the Contracts or applicable law. Unless otherwise provided in the related
Prospectus Supplement, the "Servicing Rate" will equal % per annum
calculated on the basis of a 360-day year consisting of twelve 30-day months.
As long as Green Tree is the Servicer, the Servicing Fee and any additional
servicing compensation will be paid out of collections on or with respect to
the Contracts after the required distributions to Noteholders and
Certificateholders. If Green Tree is no longer the Servicer, the Servicing Fee
and any additional servicing compensation will be paid out of collections on
or with respect to the Contracts prior to distributions to Certificateholders
and Noteholders. Unless otherwise specified in the related Prospectus
Supplement, a "Monthly Period" with respect to any Distribution Date is the
calendar month immediately preceding the month in which the Distribution Date
occurs.
Green Tree, as Servicer, will be required to pay all expenses incurred by it
in connection with its servicing activities (including fees, expenses and
disbursements of the Owner Trustee, the Indenture Trustee, the Custodian and
independent accountants, taxes imposed on the Servicer and expenses incurred
in connection with distributions and reports to Certificateholders and
Noteholders, except certain expenses incurred in connection with realizing
upon the Contracts.
DISTRIBUTIONS
With respect to each Trust, beginning on the Distribution Date specified in
the related Prospectus Supplement, distributions of principal and interest
(or, where applicable, of principal or interest only) on each class of
Securities entitled thereto will be made by the Owner Trustee or the Indenture
Trustee, as applicable, to the Certificateholders and the Noteholders. The
timing, calculation, allocation, order, source, priorities of and requirements
for all distributions to each class of Certificateholders and all payments to
each class of Noteholders will be set forth in the related Prospectus
Supplement.
CREDIT ENHANCEMENT
The amounts and types of credit enhancement arrangements and the provider
thereof, if applicable, with respect to each class of Securities will be set
forth in the related Prospectus Supplement. If and to the extent provided in
the related Prospectus Supplement, credit enhancement may be in the form of a
financial guaranty insurance policy, letter of credit, Green Tree guaranty,
cash reserve fund, or other form of credit enhancement, or any combination
thereof, as may be described in the related Prospectus Supplement. If
specified in the applicable Prospectus Supplement, credit enhancement for a
series of Securities may cover one or more other series of Securities.
The presence of credit enhancement is intended to enhance the likelihood of
receipt by the Certificateholders and the Noteholders of the full amount of
principal and interest due thereon and to decrease the likelihood that the
Certificateholders and the Noteholders will experience losses. Unless
otherwise specified in the related Prospectus Supplement, the credit
enhancement for a class of Securities will not provide protection against all
risks of loss and will not guarantee repayment of the entire principal and
interest thereon. If losses occur which exceed the amount covered by any
credit enhancement or which are not covered by any credit enhancement,
Securityholders will bear their allocable share of deficiencies. In addition,
if a form of credit enhancement covers more than one series of Securities,
Securityholders of any such series will be subject to the risk that such
credit enhancement will be exhausted by the claims of Securityholders of other
series.
EVIDENCE AS TO COMPLIANCE
On or before May 1 of each year the Servicer will deliver to each Owner
Trustee and each Indenture Trustee a report of a nationally recognized
accounting firm stating that such firm has examined certain documents and
records relating to the servicing of secured consumer contracts serviced by
the Servicer under pooling and servicing agreements or sale and servicing
agreements similar to the Trust Documents and stating that, on the basis of
such procedures, such servicing has been conducted in compliance with the
applicable Trust Documents,
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except for any exceptions set forth in such report. A copy of such statement
may be obtained by any Certificate Owner or Note Owner upon compliance with
the requirements described above. See "Certain Information Regarding the
Securities--Statements to Securityholders" above.
CERTAIN MATTERS REGARDING THE SERVICER
Unless otherwise provided in the related Prospectus Supplement, Green Tree's
appointment as Servicer under the related Trust Documents will continue until
such time as it resigns, is terminated as Servicer, or until such time, if
any, as a Servicer Termination Event shall have occurred under the related
Trust Documents. The related Trust Documents will provide that the Servicer
may not resign from its obligations and duties as Servicer thereunder, except
upon a determination (as evidenced by an opinion of independent counsel,
delivered and acceptable to the Owner Trustee and the Indenture Trustee), that
by reason of a change in legal requirements its performance of such duties
would cause it to be in violation of such legal requirements in a manner which
would result in a material adverse effect on the Servicer. No such resignation
will become effective until the Backup Servicer or other successor Servicer
has assumed the servicing obligations and duties under the related Trust
Documents.
Unless otherwise provided in the related Prospectus Supplement, any
corporation or other entity into which the Servicer may be merged or
consolidated, resulting from any merger or consolidation to which the Servicer
is a party, which acquires by conveyance, transfer or lease substantially all
of the assets of the Servicer or succeeding to all or substantially all the
business of the Servicer, where the Servicer is not the surviving entity,
which corporation or other entity assumes every obligation of the Servicer
under each Trust Document, will be the successor to the Servicer under the
related Trust Documents; provided, however, that (i) such entity is an
Eligible Servicer, and (ii) immediately after giving effect to such
transaction, no Servicer Termination Event and no event which, after notice or
lapse of time, or both, would become a Servicer Termination Event shall have
occurred and be continuing.
INDEMNIFICATION AND LIMITS ON LIABILITY
Unless otherwise specified in the related Prospectus Supplement, the Trust
Documents will provide that the Servicer will be liable only to the extent of
the obligations specifically undertaken by it under the Trust Documents and
will have no other obligations or liabilities thereunder. The Trust Documents
will further provide that neither the Servicer nor any of its directors,
officers, employees and agents will have any liability to the Trust, the
Certificateholders or the Noteholders, except as provided in the Trust
Documents, for any action taken or for refraining from taking any action
pursuant to the Trust Documents, other than any liability that would otherwise
be imposed by reason of the Servicer's breach of the Trust Documents or
willful misfeasance, bad faith or negligence (including errors in judgment) in
the performance of its duties, or by reason of reckless disregard of
obligations and duties under the Trust Documents or any violation of la.
The Servicer may, with the prior consent of the Owner Trustee and the
Indenture Trustee, if any, and the Backup Servicer, delegate duties under the
related Trust Documents to any of its affiliates. In addition, the Servicer
may at any time perform the specific duty of repossessing Products through
subcontractors who are in the business of servicing consumer receivables. The
Servicer may also perform other specific duties through subcontractors;
provided, however, that no such delegation of such duties by the Servicer
shall relieve the Servicer of its responsibility with respect thereto.
SERVICER TERMINATION EVENTS
Unless otherwise provided in the related Prospectus Supplement, "Servicer
Termination Events" under the Trust Documents will consist of (i) any failure
by the Servicer to deliver to the Owner Trustee for distribution to
Certificateholders or the Indenture Trustee for distribution to Noteholders
any proceeds or payment required to be so delivered under the terms of the
Certificates, the Trust Documents, the Notes or the Indenture that continues
unremedied for a period of two Business Days after written notice is received
by the Servicer from the Owner
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Trustee or the Indenture Trustee, or after discovery of such failure by a
responsible officer of the Servicer; (ii) any failure by the Servicer to
deliver to the Owner Trustee and the Indenture Trustee, certain reports
required by the Trust Documents by the fourth Business Day prior to the
related Distribution Date; (iii) failure on the part of the Servicer duly to
observe or perform in any material respect any other covenants or agreements
of the Servicer set forth in the Certificates, the Trust Documents, the Notes
or the Indenture which failure (A) materially and adversely affects the rights
of Securityholders, and (B) continues unremedied for a period of 30 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Owner Trustee, the
Indenture Trustee or any Securityholder; (iv)(A) the commencement of an
involuntary case under the federal bankruptcy laws, as now or hereinafter in
effect, or another present or future federal or state bankruptcy, insolvency
or similar law (the "Bankruptcy Laws"), and such case is not dismissed within
60 days; or (B) the entry of a decree or order for relief by a court or
regulatory authority having jurisdiction in respect of the Servicer under the
Bankruptcy Laws, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of any
substantial part of their respective properties or ordering the winding up or
liquidation of the affairs of the Servicer; (v) the commencement by the
Servicer of a voluntary case under any Bankruptcy Law, or the consent by the
Servicer to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Servicer or of any substantial part of the Servicer's property or the making
by the Servicer of an assignment for the benefit of creditors or the failure
by the Servicer generally to pay its debts as such debts become due or the
taking of corporate action by the Servicer in furtherance of any of the
foregoing; or (vi) any representation, warranty or statement of the Servicer
made in the Trust Documents or any certificate, report or other writing
delivered pursuant thereto shall prove to be incorrect in any material respect
as of the time when the same shall have been made, and the incorrectness of
such representation, warranty or statement has a material adverse effect on
the Trust and, within 30 days after written notice thereof shall have been
given to the Servicer by the Owner Trustee, the Indenture Trustee or any
Securityholder, the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured.
Unless otherwise specified in the related Prospectus Supplement, if a
Servicer Termination Event occurs and is continuing, the Owner Trustee, the
Indenture Trustee (if any), or a Certificate Majority or a Note Majority, by
notice then given in writing to the Servicer (and to the Owner Trustee and the
Indenture Trustee if given by the Securityholders) may terminate all of the
rights and obligations of the Servicer under the Trust Documents. Immediately
upon the giving of such notice, and, in the case of a successor Servicer other
than the Backup Servicer, the acceptance by such successor Servicer of its
appointment, all authority of the Servicer will pass to the Backup Servicer or
other successor Servicer. The Owner Trustee, the Indenture Trustee and the
successor Servicer may set off and deduct any amounts owed by the Servicer
from any amounts payable to the outgoing Servicer.
On and after the time the Servicer receives a notice of termination, the
Backup Servicer or other successor Servicer will be the successor in all
respects to the Servicer and will be subject to all the responsibilities,
restrictions, duties and liabilities of the Servicer under the related Trust
Documents; provided, however, that the successor Servicer shall have no
liability with respect to any obligation which was required to be performed by
the prior Servicer prior to the date that the successor Servicer becomes the
Servicer or any claim of a third party (including a Securityholder) based on
any alleged action or inaction of the prior Servicer. Notwithstanding the
above, if the Backup Servicer shall be legally unable or shall be unwilling to
act as Servicer, the Owner Trustee, the Indenture Trustee, a Certificate
Majority or a Note Majority may petition a court of competent jurisdiction to
appoint any Eligible Servicer as the successor to the Servicer. Pending any
such appointment, the Backup Servicer shall act as successor Servicer unless
it is legally unable to do so, in which event the outgoing Servicer shall
continue to act as Servicer until a successor has been appointed and accepted
such appointment. "Eligible Servicer" means a person which, at the time of its
appointment as Servicer, (A) is servicing a portfolio of consumer retail
installment sales contracts and/or consumer installment loans, (B) is legally
qualified and has the capacity to service the Contracts, (C) has demonstrated
the ability to service professionally and competently a portfolio of consumer
retail installment sales contracts and/or consumer installment loans similar
to the Contracts
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in accordance with high standards of skill and care, and (D) is qualified and
entitled to use, pursuant to a license or other written agreement, and agrees
to maintain the confidentiality of, the software which the Servicer uses in
connection with performing its duties and responsibilities under the related
Trust Documents or otherwise has available software which is adequate to
perform its duties and responsibilities under such Trust Documents.
Any successor Servicer shall be entitled to such compensation payable out of
the Collection Account as the outgoing Servicer would have been entitled to
under the Trust Documents if the outgoing Servicer had not resigned or been
terminated.
Upon any termination of, or appointment of a successor to, the Servicer, the
Owner Trustee and the Indenture Trustee (if any) will each give prompt written
notice thereof to Certificateholders and Noteholders, respectively, at their
respective addresses appearing in the Certificate Register or the Note
Register and to each Rating Agency.
AMENDMENT
Unless otherwise provided in the related Prospectus Supplement, the Trust
Documents may be amended by the Seller, the Servicer, the Owner Trustee and
the Indenture Trustee, if any, but without the consent of any of the
Securityholders, to cure any ambiguity or to correct or supplement any
provision therein, provided that such action will not, in the opinion of
counsel (which may be internal counsel to Green Tree or the Servicer)
reasonably satisfactory to the Owner Trustee and the Indenture Trustee,
materially and adversely affect the interests of the Securityholders. The
Trust Documents may also be amended by Green Tree, the Servicer and the Owner
Trustee and the Indenture Trustee (if any), and a Certificate Majority and a
Note Majority (if applicable), for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Trust
Documents or of modifying, in any manner, the rights of the Certificateholders
or the Noteholders. No such amendment may (i) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of payments
on the related Contracts or distributions that are required to be made on any
related Certificate or Note or the related Pass-Through Rate or Interest Rate
or (ii) reduce the percentage of the Certificate Balance evidenced by
Certificates or of the aggregate principal amount of Notes then outstanding
required to consent to any such amendment, without the consent of the holders
of all Certificates or all Notes, as the case may be, then outstanding.
TERMINATION
Unless otherwise provided in the related Prospectus Supplement, with respect
to each Trust, the Trust and the respective obligations of Green Tree, the
Servicer, the Owner Trustee and the Indenture Trustee pursuant to the related
Trust Documents will terminate upon the later of (i) the Distribution Date
immediately following the maturity or other liquidation of the last Contract
(including Green Tree's or the Servicer's purchase of the Contracts, as
described below) or (ii) payment to Certificateholders and Noteholders of all
amounts required to be paid to them pursuant to the related Trust Documents
and the related Indenture and there shall be delivered to the Owner Trustee
and the Indenture Trustee an opinion of counsel that all applicable preference
periods under federal, state and local bankruptcy, insolvency and similar laws
have expired with respect to the payments made pursuant to clause (i) or (ii)
above.
Unless otherwise provided in the related Prospectus Supplement, with respect
to each series of Securities, in order to avoid excessive administrative
expense, Green Tree and the Servicer each will be permitted, at its option, to
purchase from the Trust, on any Distribution Date immediately following an
Accounting Date as of which the Aggregate Principal Balance is equal to or
less than 10% (or such other percentage as may be specified in the related
Prospectus Supplement) of the Cutoff Date Principal Balance, all remaining
Contracts in the related Trust and the other remaining Trust Property at a
price equal to the aggregate of the Purchase Amounts therefor and the
appraised value of any other remaining Trust Property. The exercise of this
right will effect an early retirement of the related Certificates and Notes.
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If a General Partner is named in the related Prospectus Supplement, unless
otherwise specified in the related Prospectus Supplement, the Trust Agreement
will provide that, in the event that the sole remaining General Partner
becomes insolvent, withdraws or is expelled as a General Partner or is
terminated or dissolved, the Trust will terminate in 90 days and effect
redemption of the Notes (if any) and prepayment of the Certificates following
the winding-up of the affairs of the related Trust, unless within such 90 days
the remaining General Partner, if any, and holders of a majority of the
Certificates of such series agree in writing to the continuation of the
business of the Trust and to the appointment of a successor to the General
Partner, and the Owner Trustee is able to obtain an opinion of counsel to the
effect that the Trust will not thereafter be an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes.
Unless otherwise specified in the related Prospectus Supplement, with
respect to each series of Securities, the Owner Trustee will give written
notice of the final distribution with respect to the Certificates to each
Certificateholder of record and the Indenture Trustee will give written notice
of the final payment with respect to the Notes (if any), to each Noteholder of
record. The final distribution to any Certificateholder and the final payment
to any Noteholder will be made only upon surrender and cancellation of such
holder's Certificate or Note at the office or agency of the Owner Trustee,
with respect to Certificates, or of the Indenture Trustee, with respect to
Notes, specified in the notice of termination. Any funds remaining in the
Trust, after the Owner Trustee or the Indenture Trustee has taken certain
measures to locate a Certificateholder or Noteholder, as the case may be, and
such measures have failed, will be distributed to The United Way, and the
Certificateholders and Noteholders, by acceptance of their Certificates and
Notes, will waive any rights with respect to such funds.
THE OWNER TRUSTEE
The Owner Trustee for each Trust will be specified in the related Prospectus
Supplement. The Owner Trustee, in its individual capacity or otherwise, and
any of its affiliates may hold Certificates or Notes in their own names or as
pledgee. In addition, for the purpose of meeting the legal requirements of
certain jurisdictions, the Owner Trustee, with the consent of the Servicer,
shall have the power to appoint co-trustees or separate trustees of all or any
part of the related Trust. In the event of such appointment, all rights,
powers, duties and obligations conferred or imposed upon the Owner Trustee by
the related Trust Documents will be conferred or imposed upon the Owner
Trustee and such separate trustee or co-trustee jointly, or, in any
jurisdiction where the Owner 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 Owner Trustee.
The Owner Trustee of any Trust may resign at any time, in which event the
General Partner, if any, specified in the related Prospectus Supplement or, if
no such General Partner is specified, the Servicer or its successor will be
obligated to appoint a successor trustee. The General Partner, if any,
specified in the related Prospectus Supplement (or, if no such General Partner
is specified, the Servicer) may also remove the Owner Trustee, if the Owner
Trustee ceases to be eligible to serve, becomes legally unable to act, is
adjudged insolvent or is placed in receivership or similar proceedings. In
such circumstances, the General Partner, if any, specified in the related
Prospectus Supplement or, if no such General Partner is specified, the
Servicer will be obligated to appoint a successor trustee. Any resignation or
removal of the Owner Trustee and appointment of a successor trustee will not
become effective until acceptance of the appointment by the successor trustee.
DUTIES OF THE OWNER TRUSTEE
The Owner Trustee will make no representation as to the validity or
sufficiency of any Trust Document, the Certificates or the Notes (other than
its execution of the Certificates and the Notes), the Contracts or any related
documents, and will not be accountable for the use or application by the
Servicer of any funds paid to the Servicer in respect of the Certificates, the
Notes or the Contracts prior to deposit in the related Collection Account.
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The Owner Trustee will be required to perform only those duties specifically
required of it under the Trust Documents. Generally, those duties will be
limited to the receipt of the various certificates, reports or other
instruments required to be furnished by the Servicer to the Owner Trustee
under the Trust Documents, in which case it will only be required to examine
such certificates, reports or instruments to determine whether they conform
substantially to the requirements of the Trust Documents.
The Owner Trustee will be under no obligation to exercise any of the rights
or powers vested in it by the Trust Documents or to institute, conduct, or
defend any litigation thereunder or in relation thereto at the request, order
or direction of any of the Certificateholders or Noteholders, unless such
Certificateholders or Noteholders have offered the Owner Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby. No Certificateholder nor any Noteholder will have
any right under the Trust Documents to institute any proceeding with respect
to such Trust Documents, unless such holder has given the Owner Trustee
written notice of default and unless the holders of Certificates evidencing
not less than 25% of the Certificate Balance or the holders of Notes
evidencing not less than 25% of the aggregate principal balance of the Notes
then outstanding, as the case may be, have made written request to the Owner
Trustee to institute such proceeding in its own name as Trustee thereunder and
have offered to the Owner Trustee reasonable indemnity, and the Owner Trustee
for 30 days after the receipt of such notice, request and offer to indemnify
has neglected or refused to institute any such proceedings.
THE BACKUP SERVICER
The Backup Servicer for each Trust will be specified in the related
Prospectus Supplement. While Green Tree is the Servicer, the Backup Servicer
will not be liable or responsible for any obligation of the Servicer, and the
Certificateholders and Noteholders may look only to Green Tree to perform such
obligations. Upon the Servicer's receipt of a termination notice after the
occurrence of a Servicer Termination Event, the Backup Servicer will
automatically become the Servicer.
ADMINISTRATOR
If an Administrator is specified in the related Prospectus Supplement, such
Administrator will enter into an agreement (the "Administration Agreement")
pursuant to which such Administrator will agree, to the extent provided in
such Administration Agreement, to provide the notices and to perform other
administrative obligations required by the related Indenture and the Trust
Agreement.
CERTAIN LEGAL ASPECTS OF THE CONTRACTS
RIGHTS IN THE CONTRACTS
The Contracts are "chattel paper" as defined in the UCC as in effect in the
State of Minnesota. Pursuant to the UCC, an ownership interest in chattel
paper may be perfected by possession or by filing a UCC-1 financing statement
in the state where the seller's principal executive office is located.
Accordingly, financing statements covering the Contracts will be filed by
Green Tree in Minnesota.
The Servicer will be obligated from time to time to take such actions as are
necessary to continue the perfection of each Trust's interest in the related
Contracts and the proceeds thereof. Green Tree will warrant in the Trust
Documents with respect to the Contracts held by the related Trust and the
Owner Trustee will pledge such right to the Indenture Trustee as collateral
for the Notes, if any, that, as of the Closing Date, such Contracts have not
been sold, pledged or assigned by Green Tree to any other person, and that it
has good and indefeasible title thereto and is the sole owner thereof free of
any Liens and that, immediately upon the transfer of the Contracts to such
Trust pursuant to the related Trust Document, the Trust will have good and
indefeasible title to and will be the sole owner of the Contracts, free of any
Liens. In the event of an uncured breach of any of such warranties in the
Trust Documents that materially and adversely affects the related Trust's,
Certificateholders' or Noteholders' interest in any Contract (a "Repurchase
Event"), Green Tree will be obligated to repurchase such Contract.
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Unless otherwise provided in the related Prospectus Supplement, Green Tree
will hold the Contract Files on behalf of each Trust under a custodian
agreement with the Trust. To facilitate servicing and save administrative
costs, the documents will not be physically segregated from other similar
documents that are in Green Tree's possession. UCC financing statements will
be filed in Minnesota reflecting the sale and assignment of the Contracts to
the Trustee, and Green Tree's accounting records and computer systems will
also reflect such sale and assignment. In addition, the Contracts will be
stamped or otherwise marked to indicate that such Contracts have been sold to
the related Trust. Despite these precautions, if, through inadvertence or
otherwise, any of the Contracts were sold to another party (or a security
interest therein were granted to another party) that purchased (or took such
security interest in) any of such Contracts in the ordinary course of its
business and took possession of such Contracts, the purchaser (or secured
party) would acquire an interest in the Contracts superior to the interest of
the related Trust if the purchaser (or secured party) acquired (or took a
security interest in) the Contracts for new value and without actual knowledge
of such Trust's interest. See "Description of the Trust Documents--Custody of
Contract Files."
SECURITY INTERESTS IN THE PRODUCTS
With respect to Products covered by a certificate of title, security
interests in the Products must be perfected by notation of the secured party's
lien on the certificate of title or by such notation on or actual possession
of the certificate of title, depending on the law of the state wherein the
purchaser resides. Security interests in certain other Products must be
perfected by the filing of a UCC financing statement, naming the Obliger as
debtor and Green Tree as secured party. The practice of Green Tree is to take
such action as is required to perfect its security interest under the laws of
the state in which the Product is located. In the event of clerical errors,
administrative delays or otherwise, such actions may not have been taken with
respect to a Product and such security interest may be subordinate to the
interests of, among others, subsequent purchasers of the Products, holders of
perfected security interests in the Product, and the trustee in bankruptcy of
the Obligor. However, such failure would give rise to a Repurchase Event and
obligate Green Tree to repurchase the affected Contract if the interests of
the related Certificateholders, Noteholders or Trust were materially and
adversely affected.
Pursuant to the related Trust Document, Green Tree will assign the security
interests in the Products to the Owner Trustee on behalf of the related Trust.
However, because of the administrative burden and expense that would be
entailed in doing so, none of Green Tree, the Seller, the Owner Trustee or the
Servicer will be required, except to the extent provided below, to amend the
certificates of title or UCC financing statements to identify the Owner
Trustee as the new secured party and, accordingly, Green Tree will continue to
be named as the secured party on the certificates of title or UCC financing
statements relating to the Products. Further, the Servicer will be required to
note the interest of the related Trust on the certificates of title for the
Products or to amend the UCC financing statements only upon a Servicer
Termination Event. In most states, an assignment such as that under the
related Trust Documents should be an effective transfer of a security interest
without amendment of any lien noted on the related certificate of title or
financing statement, and the assignee should succeed to the assignor's status
as the secured party. In the absence of fraud or forgery by the Obligor or
administrative error by state recording officials, the notation of the lien of
Green Tree on the certificate of title or the UCC financing statement should
be sufficient to protect the related Trust against the rights of subsequent
purchasers of a Product or subsequent lenders who take a security interest in
the related Product. However, in the absence of such an amendment, the
security interest of the related Trust in the related Products might be
defeated by, among others, the trustee in bankruptcy of Green Tree or the
Obligor. However, such failure would give rise to a Repurchase Event and
obligate Green Tree to repurchase the affected Contract if the interests of
the related Certificateholders, Noteholders or Trust were materially and
adversely affected.
In most states, a perfected security interest in a Product subject to
certificate of title continues for four months after the Product is moved to a
different state and thereafter until the owner re-registers the Product in the
new state, but in no event beyond the surrender of the certificate of title. A
majority of states require surrender of a certificate of title to re-register
a Product. Accordingly, the secured party must surrender possession if it
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<PAGE>
holds the certificate of title to such Product. In the case of Product
registered in states which provide for notation of a lien but not possession
of the certificate of title by the holder of the security interest in the
related Product, the secured party should receive notice of surrender if the
security interest in the Product is noted on the certificate of title.
Accordingly, the secured party should have the opportunity to re-perfect its
security interest in the Product in the state of relocation. In states that do
not require a certificate of title for registration of a Product, re-
registration could defeat perfection.
In the ordinary course of servicing its secured consumer contract portfolio,
it is the practice of Green Tree to effect such re-perfection upon receipt of
notice of re-registration or information from the Obligor as to relocation.
Similarly, when an Obligor sells a Product subject to a certificate of title,
Green Tree must surrender possession of the certificate of title or receive
notice as a result of its lien noted thereon and accordingly should have an
opportunity to require satisfaction of the related Contract before release of
the lien. Under the related Trust Document, the Servicer will be obligated to
take such steps, at the Servicer's expense, as are necessary to maintain
perfection of security interest in such Product, and the failure to take such
steps would obligate the Servicer to purchase the related Contract if such
failure materially and adversely affects the interests of the related
Certificateholders, Noteholders and Trust in such Contracts.
Under the laws of most states, liens for repairs performed on a vehicle and
liens for unpaid taxes take priority over even a perfected security interest
in a Product. Green Tree in the related Trust Document will represent that,
immediately prior to the sale, assignment and transfer thereof to the related
Trust, each Contract held by such Trust was secured by a valid, subsisting and
enforceable first priority perfected security interest in favor of Green Tree,
as secured party. However, liens for taxes, judicial liens or liens arising by
operation of law could arise at any time during the term of a Contract. In
addition, the laws of certain states and federal law permit the confiscation
of motor vehicles and certain other consumer products by governmental
authorities under certain circumstances if used in unlawful activities, which
may result in the loss of a secured party's perfected security interest in the
confiscated product. No notice will be given to the Owner Trustee, Indenture
Trustee, Certificateholders or Noteholders in the event such a lien or
confiscation arises, and if such lien arises or confiscation occurs after the
date of issuance of any series of Certificates and Notes, neither Green Tree
nor the Servicer will be required to repurchase or purchase the related
Contract.
REPOSSESSION
In the event of default by an Obligor, the owner of a retail installment
sales contract or installment loan has all the remedies of a secured party
under the UCC, except where specifically limited by other state laws. The
remedies of a secured party under the UCC include the right to repossession by
self-help means, unless such means would constitute a breach of the peace.
Self-help repossession is the method employed by Green Tree in most cases and
is accomplished simply by taking possession of the Product. In the event of
default by the Obligor, some jurisdictions require that the Obligor be
notified of the default and be given a time period within which he may cure
the default prior to repossession. In cases where the Obligor objects or
raises a defense to repossession, or if otherwise required by applicable state
law, a court order must be obtained from the appropriate state court, and the
Product must then be repossessed in accordance with that order. Other
jurisdictions permit repossession without notice, but only if the repossession
can be accomplished peacefully. If a breach of the peace cannot be avoided,
judicial action is required. A secured party may be held responsible for
damages caused by a wrongful repossession of a Product, including a wrongful
repossession conducted by an agent of the secured party. The Servicer will be
required to indemnify the related Trust for any liability imposed upon such
Trust as a result of a wrongful repossession. In many states, a Product may be
repossessed without notice to the Obligor, but only if the repossession can be
accomplished without a breach of the peace.
NOTICE OF SALE; REDEMPTION RIGHTS
The UCC and various other state laws require a secured party who has
repossessed the collateral securing an obligation to provide an obligor with
reasonable notice of the date, time and place of any public sale and/or the
date after which any private sale of the collateral may be held. The obligor
has the right to redeem the
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collateral prior to actual sale by paying the secured party the entire unpaid
time balance of the obligation (less any unaccrued finance charges) plus
accrued default charges, reasonable expenses for repossessing, holding and
preparing the collateral for disposition and arranging for its sale, plus, to
the extent provided in the financing documents, reasonable attorneys' fees, or
in some states, by payment of delinquent installments or the unpaid principal
balance of the related obligation.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of Products generally will be applied first to the
expenses of repossession and resale and then to the satisfaction of the
related Contract. While some states impose prohibitions or limitations on
deficiency judgments if the net proceeds from resale do not cover the full
amount of the indebtedness, a deficiency judgment can be sought in other
states that do not prohibit or limit such judgments, subject to satisfaction
of statutory procedural requirements by the holder of the obligation. However,
any deficiency judgment would be a personal judgment against the Obligor for
the shortfall, and a defaulting Obligor can be expected to have very little
capital or sources of income available following repossession. Therefore, in
many cases, it may not be useful to seek a deficiency judgment or, if one is
obtained, it may be settled at a significant discount or not paid at all.
Green Tree generally seeks to recover any deficiency existing after
repossession and sale of a Product.
Occasionally, after resale of a repossessed Products, and payment of all
expenses and indebtedness, there is a surplus of funds. In that case, the law
of most states requires the secured party to remit the surplus to any holder
of another lien with respect to the Product, if proper notification of demand
for proceeds is received prior to distribution, or, if no such lienholder
exists, to remit the surplus to the former owner of the Product.
SOLDIERS' AND SAILORS' CIVIL RELIEF ACT
The Relief Act imposes certain limitations upon the actions of creditors
with respect to persons serving in the Armed Forces of the United States and,
to a more limited extent, their dependents and guarantors and sureties of debt
incurred by such persons. An obligation incurred by a person prior to entering
military service cannot bear interest at a rate in excess of 6% during the
person's term of military service, unless the obligee petitions a court which
determines that the person's military service does not impair his or her
ability to pay interest at a higher rate. Further, a secured party may not
repossess during a person's military service a Product subject to an
installment sales contract or a promissory note entered into prior to the
person's entering military service, for a loan default which occurred prior to
or during such service, without court action. The Relief Act imposes penalties
for knowingly repossessing property in contravention of its provisions.
Additionally, dependents of military personnel are entitled to the protection
of the Relief Act, upon application to a court, if such court determines the
obligation of such dependent has been materially impaired by reason of the
military service. To the extent an obligation is unenforceable against the
person in military service or a dependent, any guarantor or surety of such
obligation will not be liable for performance.
CONSUMER PROTECTION LAWS
Numerous Federal and state consumer protection laws and related regulations
impose substantive and disclosure requirements upon lenders and servicers
involved in consumer finance. Some of the Federal laws and regulations include
the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade
Commission Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Magnuson-Moss Warranty Act, and the Federal Reserve Board's
Regulations B and Z.
In addition to Federal law, state consumer protection statutes regulate,
among other things, the terms and conditions of retail installment contracts
and promissory notes pursuant to which purchasers finance the acquisition of
consumer products. These laws place finance charge ceilings on the amount that
a creditor may charge in connection with financing the purchase of a consumer
product. These laws also impose other restrictions on consumer transactions
and require contract disclosures in addition to those required under federal
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law. These requirements impose specific statutory liabilities upon creditors
who fail to comply. In some cases, this liability could affect the ability of
an assignee, such as the related Trust, to enforce consumer finance contracts
such as the Contracts. The "Credit Practices" Rule of the Federal Trade
Commission (the "FTC") imposes additional restrictions on contract provisions
and credit practices.
The FTC's so-called holder-in-due-course rule has the effect of subjecting
persons that finance consumer credit transactions (and certain related lenders
and their assignees) to all claims and defenses which the purchaser could
assert against the seller of the goods and services. An assignee's affirmative
liability to pay money to such aggrieved purchaser in the event of a
successful claim is limited to amounts paid by the purchaser under the
consumer credit contract. However, the assignee's ability to collect any
balance remaining due thereunder is subject to these claims and defenses.
Accordingly, each Trust, as assignee of the related Contracts, will be subject
to claims or defenses, if any, that the purchaser of the related Product may
assert against the seller of such Product.
Courts have applied general equitable principles to secured parties pursuing
repossession or litigation involving deficiency balances. These equitable
principles may have the effect of relieving an Obligor from some or all of the
legal consequences of a default.
Green Tree will warrant in the related Trust Document that as of the date of
origination each Contract held by the related Trust complied with all
requirements of applicable law in all material respects. Accordingly, if such
Trust's interest in a Contract were materially and adversely affected by a
violation of any such law, such violation would constitute a Repurchase Event
and would obligate Green Tree to repurchase the Contract unless the breach
were cured. Under the related Trust Document, Green Tree will be required to
indemnify the related Trust for any liability resulting from the failure of a
Contract to be in compliance with all requirements of law. See "Description of
the Trust Documents--Sale and Assignment of the Contracts."
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including Federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a lender to
realize upon collateral or enforce a deficiency judgment. For example, in a
proceeding under Chapter 13 of the U.S. Bankruptcy Code of 1978, as amended, a
court may prevent a lender from repossessing collateral, and, as part of the
rehabilitation plan, reduce the amount of the secured indebtedness to the
market value of the collateral at the time of bankruptcy (as determined by the
court), leaving the party providing financing as a general unsecured creditor
for the remainder of the indebtedness. A bankruptcy court may also reduce the
monthly payments due under a contract, change the rate of interest and time of
repayment of the indebtedness or substitute collateral securing such
indebtedness.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The anticipated federal income tax consequences of the purchase, ownership
and disposition of each series of Securities will be discussed in the related
Prospectus Supplement. Such discussion will not purport to deal with federal
income tax consequences applicable to all categories of investors, some of
which may be subject to special rules. Investors should consult their own tax
advisors in determining the federal, state, local and any other tax
consequences to them of the purchase, ownership and disposition of the
Securities.
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ERISA CONSIDERATIONS
Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Code prohibit a pension, profit
sharing or other employee benefit plan from engaging in certain transactions
involving "plan assets" with persons that are "parties in interest" under
ERISA or "disqualified persons" under the Code with respect to the plan. ERISA
also imposes certain duties and certain prohibitions on persons who are
fiduciaries of plans subject to ERISA. Under ERISA, generally any person who
exercises any authority or control with respect to the management or
disposition of the assets of a plan is considered to be a fiduciary of such
plan. A violation of these "prohibited transaction" rules may generate excise
tax and other liabilities under ERISA and the Code for such persons.
Certain transactions involving the related Trust might be deemed to
constitute prohibited transactions under ERISA and the Code with respect to a
Benefit Plan that purchased Securities if assets of the related Trust were
deemed to be assets of the Benefit Plan. Under a regulation issued by the
United States Department of Labor (the "Plan Assets Regulation"), the assets
of a Trust would be treated as plan assets of a Benefit Plan for the purposes
of ERISA and the Code only if the Benefit Plan acquired an "equity interest"
in the Trust and none of the exceptions contained in the Plan Assets
Regulation was applicable. An equity interest is defined under the Plan Assets
Regulation as an interest other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features. The likely treatment of Notes and Certificates will be discussed in
the related Prospectus Supplement.
Employee benefit plans that are governmental plans (as defined in Section
3(32) of ERISA) and certain church plans (as defined in Section 3(33) of
ERISA) are not subject to ERISA requirements.
A plan fiduciary considering the purchase of Securities should consult its
tax and/or legal advisors regarding whether the assets of the Trust would be
considered plan assets, the possibility of exemptive relief from the
prohibited transaction rules and other issues and their potential
consequences.
PLAN OF DISTRIBUTION
On the terms and conditions set forth in an underwriting agreement (the
"Underwriting Agreement") with respect to each Trust, the Seller will agree to
sell to each of the underwriters named therein and in the related Prospectus
Supplement, and each of such underwriters will severally agree to purchase
from the Seller, the principal amount of each class of Securities of the
related series set forth therein and in the related Prospectus Supplement.
In each Underwriting Agreement, the several underwriters will agree, subject
to the terms and conditions set forth therein, to purchase all the Securities
described therein which are offered hereby and by the related Prospectus
Supplement if any of such Securities are purchased. In the event of a default
by any such underwriter, each Underwriting Agreement will provide that, in
certain circumstances, purchase commitments of the nondefaulting underwriters
may be increased, or the Underwriting Agreement may be terminated.
Each Prospectus Supplement will either (i) set forth the price at which each
class of Securities being offered thereby will be offered to the public and
any concessions that may be offered to certain dealers participating in the
offering of such Securities or (ii) specify that the related Securities are to
be resold by the underwriters in negotiated transactions at varying prices to
be determined at the time of such sale. After the initial public offering of
any Securities, the public offering price and such concessions may be changed.
Each Underwriting Agreement will provide that Green Tree will indemnify the
underwriters against certain liabilities, including liabilities under the
Securities Act.
The Indenture Trustee, if any, may, from time to time, invest the funds in
the Designated Accounts in Eligible Investments acquired from the
underwriters.
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Under each Underwriting Agreement, the closing of the sale of any class of
Securities subject thereto will be conditioned on the closing of the sale of
all other such classes.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered will be set forth in the related Prospectus
Supplement.
LEGAL MATTERS
Certain matters with respect to the validity of the Certificates and the
Notes will be passed upon for the Seller by Dorsey & Whitney P.L.L.P.,
Minneapolis, Minnesota. The validity of the Certificates and the Notes will be
passed upon for the underwriters named in the related Prospectus Supplement by
[u/w counsel].
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred in connection
with the offering of the Asset-Backed Certificates and the Asset-Backed Notes,
other than underwriting discounts and commissions, described in this
Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee.............. $80,144.83
Printing and Engraving...........................................
Legal Fees and Expenses..........................................
Blue Sky Filing and Counsel Fees.................................
Accounting Fees and Expenses.....................................
Trustee Fees and Expenses........................................
Rating Agencies' Fees............................................
Miscellaneous Expenses...........................................
----------
Total........................................................ $
==========
</TABLE>
- --------
* All fees and expenses, other than the Securities and Exchange Commission
Registration Fee, are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Green Tree Financial Corporation is incorporated under the laws of Delaware.
Section 145 of the Delaware General Corporation Law provides that a Delaware
corporation may indemnify any persons, including officers and directors, who
are, or are threatened to be made, parties to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of such corporation,
by reason of the fact that such person was an officer, director, employee or
agent of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation
or enterprise). The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceedings,
provided such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the corporation's best interests and, for
criminal proceedings, had no reasonable cause to believe that his conduct was
illegal. A Delaware corporation may identify officers and directors in an
action by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer
or director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director actually and reasonably incurred.
The Certificate of Incorporation and Bylaws of Green Tree Financial
Corporation provide, in effect, that, subject to certain limited exceptions,
such corporation will indemnify its officers and directors to the extent
permitted by the Delaware General Corporation Law.
ITEM 16. EXHIBITS.
The Exhibits filed as part of this Registration Statement are:
<TABLE>
<C> <S>
**1.1 --Form of Underwriting Agreement.
3.1 --Certificate of Incorporation of Green Tree (incorporated by reference
to Exhibit 3.1 to the registrant's Registration Statement No. .
3.2 --By-Laws of Green Tree (incorporated by reference to Exhibit 3.2 to
the registrant's Registration Statement No. .
**4.1 --Form of Pooling and Servicing Agreement between Green Tree, as Seller
and as Servicer, and the Owner Trustee.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
*4.2 --Form of Sale and Servicing Agreement relating to Trusts including
Pre-Funding Accounts or issuing Notes.
*4.3 --Form of Trust Agreement relating to Trusts including Pre-Funding
Accounts or issuing Notes.
*4.4 --Form of Indenture between the Trust and the Indenture Trustee,
including form of Note.
*5.1 --Opinion and consent of Dorsey & Whitney with respect to legality.
*8.1 --Opinion and consent of Dorsey & Whitney with respect to tax matters
(to be filed by amendment).
*23.1 --Consent of Dorsey & Whitney (included as part of Exhibit 5.1).
*23.2 --Consent of Dorsey & Whitney (included as part of Exhibit 8.1).
*23.3 --Consent of KPMG Peat Marwick.
*25.1 --Form of T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of the Indenture Trustee.
**99.1 --Form of Prospectus Supplement for Grantor Trusts.
**99.2 --Form of Prospectus Supplement for Trusts including Pre-Funding
Accounts or issuing Notes.
</TABLE>
- --------
*To be filed by amendment.
**Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant on behalf of the Trust hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Owner Trust's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
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<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change to such information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change in the information set forth in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under section 305(b)(2) of the Trust
Indenture Act.
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<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 2
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF SAINT PAUL, STATE OF MINNESOTA, ON
THE 15TH DAY OF NOVEMBER, 1995.
Green Tree Financial Corporation
/s/ John W. Brink
By __________________________________
JOHN W. BRINK
Executive Vice President,
Treasurer and Chief Financial
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 2 TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
* Chairman of the
- ------------------------------------- Board and Chief November 15,
LAWRENCE M. COSS Executive Officer 1995
(Principal
Executive Officer
and Director)
/s/ John W. Brink Executive Vice
- ------------------------------------- President, November 15,
JOHN W. BRINK Treasurer and Chief 1995
Financial Officer
(Principal
Financial Officer)
* Vice President and
- ------------------------------------- Controller November 15,
ROBLEY D. EVANS (Principal 1995
Accounting Officer)
* Director
- ------------------------------------- November 15,
RICHARD G. EVANS 1995
Director
- -------------------------------------
W. MAX MCGEE
Director
- -------------------------------------
TANIA A. MODIC
* Director
- ------------------------------------- November 15,
ROBERT S. NICKOLOFF 1995
* Director
- ------------------------------------- November 15,
ROBERT D. POTTS 1995
/s/ John W. Brink
*By _________________________________
JOHN W. BRINK
as Attorney-in-Fact
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